It is time for craft beer to have its own go-to platform, one that is focused on harnessing the energy of the passionate community that backs craft beer.
Milwaukee, WI (PRWEB) November 13, 2012
Craft beer is the latest industry to gain its own crowdfunding platform. CraftFund, LLC has announced its launch of the first crowdfunding platform focused exclusively on the craft beer community.
The craft beer industry has experienced double digit growth the past several years during a time when the overall beer market has contracted. Despite this growth, the $8.7 billion craft beer industry still only claims 6% volume of the total $100 billion beer industry. Given the rapid growth and the fact that the millennial demographic is its key driver, the craft beer industry shows no sign of slowing down. Indeed, the Brewers Association estimates that are now 1300 breweries in planning across the U.S.
Crowdfunding--the means of raising smaller amounts of startup capital online from a larger number of people--is also a booming industry with up to $2.8 billion expected to be raised this year through crowdfunding platforms. As more niche crowdfunding platforms pop up around specific industries with devoted followings, CraftFund Founder David Dupee believes “it is time for craft beer to have its own go-to platform, one that is focused on harnessing the energy of the passionate community that backs craft beer.”
Crowdfunding would seem to be a perfect fit with craft beer’s culture that emphasizes participation, experiences and collaboration. Through tastings, beer camps, crowdsourcing of designs and names, brewers seek to bridge the gap between producer and consumer. Crowdfunding can completely close that gap, a fact which Dupee believes explains why more breweries in planning are turning to general crowdfunding platforms like Kickstarter.
To this end, CraftFund has developed a rewards platform through its technology provider, Launcht, to help breweries in planning raise startup capital. Whereas other platforms feature a variety of industries and creative projects, CraftFund’s rewards platform is focused on helping the 1300 breweries in planning get the exposure and funding needed to make it to market. This niche focus allows for CraftFund to partner with breweries in crafting a message and marketing the campaigns. A traditional crowdfunding platform, CraftFund’s rewards platform allows individuals to contribute money to a startup brewery in exchange for gear and other rewards.
Just launched, CraftFund’s rewards platform currently features live campaigns from breweries in planning in Peoria, AZ (Mischief Brewing) and Waco, TX (Scars & Stripes). CraftFund’s rewards platform is not limited to breweries and can be used to fund any campaign that is related to the craft beer industry, including beer bars, hop farms, canning lines, publications, and events.
CraftFund also intends to launch an equity crowdfunding portal designed to help existing breweries source capital to grow and expand brands. Under current regulations, companies raising money online from the general public are limited to offering rewards in exchange for donations. A provision of the recently passed JOBS Act changes this reality as small companies will soon have the opportunity to sell up to $1 million in company stock per year to the general public so long as certain financial and other disclosure requirements are met. Companies selling stock online to the general public will be required to do so through an intermediary “portal” registered with the SEC.
Dupee, who has a legal background in regulatory compliance, believes equity crowdfunding could be a game-changer for the craft beer industry as the reality of shrinking shelf space presents breweries with an increasing pressure to expand production capacity and connect with consumers. “You have to get the capital from somewhere,” says Dupee. “Instead of begging banks or angel investors for the capital you need to expand, why not source capital from passionate followers and build your brand in the process? It’s a win-win.”
Dupee points to Scottish based BrewDog’s “Equity for Punks” crowdfunding campaign that raised over £2 million as an example of what could soon be possible in the U.S. Beyond raising necessary capital for expansion, BrewDog creatively structured unique experiences around the campaign to strengthen its brand. “Through shareholders meetings and other unique experiences, the ‘Equity for Punks’ campaign has created brand loyalty and brand advocates,” says Dupee. “The JOBS Act presents a similar branding opportunity for U.S. craft brewers scrambling to differentiate and connect with consumers.”
Equity crowdfunding remains illegal for the general public until the SEC finalizes regulations. There are concerns that the SEC might increase the requirements and costs associated with running an equity crowdfunding campaign, and breweries should therefore consult with their attorneys prior to engaging in equity crowdfunding. Nevertheless, CraftFund is monitoring the regulatory developments in anticipation of rolling out a SEC compliant portal focused exclusively on serving the craft beer industry.
About CraftFund, LLC
Based in Milwaukee, WI, CraftFund, LLC is the first crowdfunding platform focused exclusively on the craft beer industry. Crowdfunding represents an alternative source of capital that is more consistent with breweries’ brand and mission. CraftFund will provide craft beer enthusiasts with an opportunity to donate to breweries in planning and invest in brewery expansion. To learn more, please visit http://www.craftfund.com