Sydney specialty beer store and bar Bucket Boys is the latest drinks venture to fund expansion with the assistance of a soon-to-launch equity crowdfunding campaign.
The partners behind the Marrickville-based bar and bottleshop have recently signed a lease for a new bottle shop in Penrith as well as a bottle shop and bar in Lendlease’s new Darling Square Development.
Co-owner Johnathan Hepner says that the expansion will be funded through selling up to 10 per cent of the business through an equity crowdfunding campaign to launch in mid-April.
“We’re going to set a minimum target, probably around two hundred thousand, because that basically funds the new shops,” Hepner told this week’s Beer is a Conversation podcast.
“It helps us redo our website. It also helps us get some much-needed cash flow in the business so we can do some more brewing and also start importing more beer.”
He said the strength of the crowdfunding model was that it gave consumers a chance to own the businesses they spend with.
“It’s something that I’ve dealt with a lot in the music industry when we used to raise money for albums,” he explained.
“And it’s that idea of ‘what better way to get people excited and to help raise money than to allow people to invest in your company’.
“And so it’s kind of like a journey that we can go on together, which I think is a really cool concept.”
Hepner said in addition to receiving an equity stake in the business, investors had the chance to receive life-time discounts on purchases through the stores.
“We’ve had this White Whale Society for a while now, which is basically like a membership group that gets discounts and first access to beers,” he said.
“And so we’re actually incorporating that into our crowdfunding. So, everybody who funds, there’ll be a few different levels but there are some insane discounts that we’re gonna offer, and the reason why is because we think, ‘look if you’re gonna invest in our business, then you should get something for it besides the opportunity to maybe make a few bucks one day’.”
While the incentives are yet to be finalised, they are likely to include discounts up to 25 per cent for top-level investors, together with other benefits.
The $5,000 top tier investment will be able to be shared between up to four individuals in a consortium with the benefits accruing to each member.
While aiming for a minimum capital injection of $200,000, Hepner said up to ten per cent of the business was available through the campaign. If fully subscribed, they will raise one million dollars.
“We’re hoping to hit a million dollars, which in my wildest dreams would be amazing, and would mean that we would be looking at opening a couple more shops in other cities and hopefully opening a brewery as well, which is the final piece of the puzzle that we haven’t quite gotten the money for yet,” Hepner said.
When asked about the $10-million valuation this would give the business, Hepner said that was on par with other similar raisings.
“We did look at what other companies were doing, and that seems to be about on par with what other companies were offering as well,” he said.
“And the fact that we have so many different avenues for our business, so many revenue strings that are just on the cusp of becoming great revenue makers, we see the value of the business as being actually a lot more than that, but we’re trying to be grounded in reality.”
Bucket Boys’ plan follows closely on the heels of Sydney and Melbourne-based cocktail bars The Speakeasy Group, which at the time of publication has raised close to $925,000 from 342 investors, on a valuation of approximately $21 million.
Brisbane-based Crafty Fox group, which runs the shopping centre-based Tapworks venues and three inner-city bottleshops, has also just launched an Expression of Interest with a view to crowdfunding its expansion in the near future.
Johnathan discussed the expansion and crowd-funding plans during the Beer is a Conversation podcast, in which he also talked about his concerns about the growing trend for beer enthusiasts to bypass retailers to directly import specialty and rare beers. You can hear it here: