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BrewDog to launch $50m US crowdfunding round

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Herald Scotland | Kevin Scott | August 4, 2016

Brewdog US facility 300x190 - BrewDog to launch $50m US crowdfunding round

BREWDOG is taking its Equity for Punks crowdfunding model to the US, with a target of raising $50 million (£38m) in six months to “turbo charge” its growth across the pond.

The launch marks the fifth round of crowdfunding from the Fraserburgh-based craft brewer and is the first time it has raised cash in the US.

By retaining 80 per cent of the equity in the event of a successful funding round, Brewdog has placed a value of $250m on Brewdog USA.

Calling Equity for Punks a revolution in small business finance, BrewDog co-founder James Watt said: “It’s an opportunity to enlist the people of the nation who changed the beer landscape forever, and invite them to join our existing 46,000-strong global investor community.

“We’re asking beer fans to help us change the face of small business finance in the US and spread our passion for great craft beer.”

Open to investors around the world, Equity for Punks USA shares cost $47.50 each and the minimum investment is two shares.Brewdog founders host a tv show in the US 150x150 - BrewDog to launch $50m US crowdfunding round

Equity-based crowdfunding was not possible in the US until last year, when an amendment to the the Jobs (jumpstart our business start-ups) Act was passed by the Securities and Exchange Commission (SEC). Regulation A+ of Title IV of the Jobs Act enables small businesses to sell a maximum of $50m in securities in a 12 month period.

As the leading global player in crowdfunding by revenue, BrewDog has already raised £26m in its four rounds to date, which has helped the brewer to be the fastest growing food and drink business in the UK for four consecutive years. It now employs more than 600 people and exports to 55 countries.

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“No other business worldwide, let alone a brewery, has acquired so many investors and capital in this way,” said Mr Watt. “The American equity crowdfunding round marks an unprecedented move by any small business, with BrewDog set to further pioneer its audacious new approach to community-fuelled business in the USA.”

In the prospectus for investors, BrewDog highlights the $1 billion paid by Constellation Group for San Diego’s Ballast Brewing Company last year.

However, Mr Watt has repeatedly stated the business will never be acquired, and at its last general meeting, the founders changed their constitution to ensure that BrewDog can "never be sold to a monolithic purveyor of industrial beer”.

Last year BrewDog saw pre-tax profits fall to £3.48 million from £3.65m in the prior year, as its revenues swelled 50 per cent to £44.7m.

In announcing the US package, BrewDog revealed UK sales have increased by 93 per cent for the first six months of 2016.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support and networking opportunities to over 1300+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more About Us or visit ncfacanada.org.

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