Brewdog crowdfunding 🐶

This conversation got started when James mentioned that they’d done pretty well from crowdfunding Brewdog :muscle:

that was a great return! despite being only on paper but still superb

so many other craft beer firms crowdfunded since then

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Yep, paper return but it does have some liquidity as there have been some trading days and some investors have cashed out. I’ve chosen not to at this stage

I definitely benefitted from it being the first craft beer to crowdfund (and started the trend for both craft beer and crowdfunding in the UK). I fully admit it was a fluke and had no idea it would take off as much as it has!

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Out of interest, would you invest in BrewDog again now?

I see they’re already at 88% of their target for their £7m crowdfunding round, which they had given themselves a year to complete, with 221 days remaining. It seemed like a big target to me at the time but it looks like the demand’s still there.

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Good question! Well I invested in the latest round - in as much as buying 1 £25 share to enter the share lottery to win £1m of shares :wink: Here’s my referral code if anyone is interested in getting in on the BrewDog Millionaire competition (you can invest on a non-referral basis too if you want) - R616260 #NotFinancialAdviceCaputalAtRiskEtc.

I topped up a bit in the round before TSG took a stake. However I wouldn’t invest much more at the current valuation. A few months ago I actually bought a few shares off another early investor in a private sale, at a hefty discount, because they wanted to realise some of their gains and diversify their portfolio.

The reason I wouldn’t invest a significant sum at the current valuation is because whilst growth is still good at BD, the craft beer market is starting to slow down, combined with the potential upcoming recession there is quite a high risk there. Whilst I believe people will continue to drink premium beer rather I believe they will drink less. BD’s costs are also still running very high due to the constant expansion and exploration of different revenues streams (not always related to the core offering). And whilst they are expanding into new markets I personally believe there is value in exploring other markets (ie Latin America and South East Asia, not the US and Australia) where there is a significant interest in craft beer, but the market is very young and not saturated.

Interesting they’ve reached 88% of the target. They weren’t doing that well a few months back so they extended the deadline and offered the option to pay by Cryptocurrency.

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Quite interesting to see they are doing the raise on their own website

Wondering how the payment works in that way?

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I must admit I’m not sure on the payment system for both Fiat and Crypto. I paid with £ just like I would do on any website, so from a user’s perspective it was fairly straightforward.

I have heard that paying by crypto has caused a few issues, especially with the fluctuating value between sending and receiving the currency, so some purchases have been rejected with the crypto being returned. This has caused investors (most who have just converted the amount they needed) to be hit with 2 fees (sending the initial amount and receiving the refund), losing out on the exchange rate and not getting the shares they wanted.

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Useful thanks a lot! Do you also know if they put everyone’s name onto their registrar or they can do a nominee structure?

This is the biggest thing about the crowdfunding platforms.

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So they use a registrar for their own equity raises - the Investor Centre.

However on trading days (or at least the last one anyway), they used Asset Match for the actual auction process, but it required you to open an account with Share Centre. This was to process the trades, however the default position for buyers was that your shares would be under the Share Centre nominee structure (£1.80/mth) or you could opt out of this (£25). This was on top of the 3% fees plus 0.5% stamp duty for purchases over £1k. You can see the details of the auction process here

A few people were not particularly happy about this - myself included. One of the other early investors facilitates a private trading window, which some investors chose to use instead. The spread gives the guy a bit of profit whilst the costs are much lower to investors.

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Brewdog have posted an update on Crowdcube to say that they’re offering their bonds again. It seems like they’re never not raising money!

Bonds cost £500 with interest paid via a unique, fixed rate income of 6% p.a., across 4 years, paid out 3% in cash and 3% in beer. The interest payments will be made twice a year and the beer component will be redeemed either via our online shop or through our network of UK bars – or both!

On top of the interest, you’ll receive a bunch of other beery benefits!

All of the money raised will be re-invested in our company, to help grow the business and continue to change a world dominated by bland, industrially-made beer.

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I saw that. It does slightly worry me they are constantly raising money but they always seem to be expanding so maybe it’ll pay off.

I invested a small amount with them in 2018, my first investment in a company outside of a fund. So I occasionally peruse their message board and get their constant emails pushing ever more diversified products.

I like that they are pushing into other markets and invested on the back of the fact I like their beer and feel they have pushed themselves into the mainstream beer market yet have kept the label of craft beer to an extent. I also got a bit of fomo because I considered buying in a year or two before I did and was gutted when I saw how much they were reporting the share price had increased.

I have no interest in the diversification of their products however. They’re always emailing about new rums and whiskeys and one off brews in obscure types of beer. I get they are trying to expand but I’m not sure how much value these explorations into new products bring. Especially as these alternative products are considered specialities in their own right and I imagine require a fair bit time and money going into them. I’m a simple guy, I like my beer company to produce beer and do it well. I’ll look to a whiskey company if that’s what I want to drink. It’s already a pretty saturated market I reckon.

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