Why Should You Crowdfund your Brewery?
When breweries are looking to grow, whether it’s to get out of your garage into a new production space or to open up a new taproom to complement your booming business, they often need a bit of capital to get going.
Lately, there’s been a big trend of breweries choosing to use crowdfunding to raise money for their business. There are a few reasons why they choose this route - many breweries grow very quickly, and often banks are hesitant to lend to businesses that have been in business for less than two years.
So, often breweries crowdfund out of necessity. But, there are several good reasons why breweries choose crowdfunding of their own volition and as part of their growth strategy, and here they are:
Breweries are a hot commodity, and people want to invest in them
Regulation crowdfunding has made it easier and more accessible for more people to earn passive income by investing, and when they get the chance to invest in small businesses, often people choose businesses they feel attached to, or that they’re interested in.
If you’re a craft brewery owner, you know how passionate your customers can get about beer.
This passion for craft beer and craft breweries can be made all the more powerful if your customers are given the opportunity to invest in your brewery and earn a return on it as well! Businesses that crowdfund on Honeycomb are often surprised at how many people actually want to invest in their business.
“In full transparency, I was a bit reluctant at first about the Honeycomb campaign,” says Marvin Bowe, who crowdfunded $120,600 to open Swedesboro Brewing Company. “My concern wasn't about the financing or even their ability to raise the capital for us. My concern was that we were asking people to invest without ever sampling our product. I quickly overcame my concerns when the process started and we found that the community was in love with the idea of having a brewery.”
A crowdfunding campaign can be a powerful marketing tool for your brewery
Crowdfunding is a unique and effective way of marketing your brewery - you get to show off your big plans and growth project, which excites the customers who already love you, and gets people who may not have heard of you interested in the brewery.
Businesses that crowdfund with Honeycomb often see an increase in press mentions - local papers, local beer-centered publications, and more, which builds up attention and excitement about your brewery before you’ve even made any growth moves! This can be great if you’re working on a project like opening up a new location - crowdfunding can drum up enough excitement to have people at the door when you open up.
Even if you run a rewards crowdfunding campaign (platforms like Kickstarter and IndieGogo - which we don’t recommend for growing businesses) and your customers don’t earn a return on their contribution to your brewery, the act of running a campaign and getting the word out about your brewery’s growth is almost as valuable as the money you raise!
Running a loan crowdfunding campaign can help you raise money without giving up equity!
When breweries decide to crowdfund, for some reason many of them choose to use equity crowdfunding. This means that they offer up a portion of their future profits to the public in small amounts in exchange for that up-front capital. While equity crowdfunding might seem like a good way to raise lots of money at once, it also comes at a price - your profits.
Luckily, equity crowdfunding isn’t the only kind of investment crowdfunding out there - loan crowdfunding allows brewery owners to take out a loan from their community and pay it back, plus a fixed-income interest rate. This means that you can pay back the loan over a set amount of time (though we don’t charge you for repaying early!) and you know exactly how much you’re paying back.
When it’s all said and done, loan crowdfunding allows you to have the benefits of loan crowdfunding - fair and accessible funding from your community with the added marketing boost - and keep your profits.
Get real (ale), you know you need capital to grow your brewery
So let your community of customers and supporters in on the opportunity to help you grow! Learn more about running a loan crowdfunding campaign with Honeycomb for your brewery by filling out the form below.