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Brewing and crowd finance - just a lot of froth?

January 27, 2017 • By TAB team

ne of crowd finance’s great success stories has been craft beer producer, Brewdog.

Last year, Brewdog closed what was at the time the most successful equity crowd raise in history, taking the total amount they have raised in the UK since 2010, via their infamous Equity For Punks campaigns, to £26 million.

One of crowd finance’s great success stories has been craft beer producer, Brewdog.

Last year, Brewdog closed what was at the time the most successful equity crowd raise in history, taking the total amount they have raised in the UK since 2010, via their infamous Equity For Punks campaigns, to £26 million. They are now aiming to raise $50 million Via Equity For Punks USA in order to expand their business into the United States.

And Brewdog is not alone.

Numerous beers, breweries and pubs have used the crowd to finance their futures, either to launch and grow their company, like Brewdog or Camden Town, or fight off closure, like the Bison Arms, who raised £149,000 via Seedrs to revive a local pub in the heart of Brighton. There are now even crowd finance platforms devoted entirely to raising money via the crowd for beer, such as Crowdbrewed.

Beer is certainly popular. But what is the crowd’s obsession? Why are campaigns linked to our nation’s favourite alcoholic beverage so frequent and why are they so successful?

Investors are not simply motivated by financial returns. Emotion also plays an important part.

Sure, buying a share in Brewdog for $47.50 (as you could have done in October 2016), might make financial sense to you and fit into your overall investment portfolio and strategy, especially seeing as Brewdog is a well run and rapidly expanding business.

But the return on this sort of investment is about something more meaningful than financial reward. Brewdog investors drink at a reduced cost in their bars and are given special invites to Brewdog events. It’s about being part of a collective. It’s this feeling of funding a business and a beer, which people can also enjoy consuming, that gives people the passion to continue to invest over time.

And this is why the success of crowd finance for beer looks set to continue.

Investing in beer via crowd finance is a like paying for a season ticket for your football team. It’s more than just a financial investment. It’s an emotional one, too, that creates an emotional bond. And these are the most powerful investments of all.