Devil’s Elbow Brewery has elected not to proceed with a proposed equity crowdfunding campaign.
General manager Brendon O’Sullivan told Brews News that the were a number of reasons behind the decision, made after its Expressions of Interest phase.
“[The first aim of crowdfunding] was to get that community engagement and following so that the local community feel that they own a bit of the brewery but we didn’t get that. We mostly got crafties from around the country which is great, and we exceeded our targets,” O’Sullivan explained.
“Secondly we had larger investors come in and say look we’d rather be part of the brewery without the crowdfunding part of it.
“So while we were happy that happened, we were disappointed that we didn’t get our local community behind us, as they didn’t understand the crowdfunding bit, but we will try again.
“We’re young, and so long as we have financial backers at this moment in time, happy days.”
Devil’s Elbow, which has been open since July 2019, said the funding would be used to grow capacity from the current 200,000 litres to 1 million litres, with funding towards solar power, storage tanks and a canning line.
O’Sullivan said this expansion would still be going ahead, but at a slower pace while the professional investors looked into due diligence.
In an email to those who had expressed interest at the early stages of the funding round, O’Sullivan said that the team had been “overwhelmed” with the number of offers which “truly exceeded our expectations”.
He said that the financial support pledged ranged from $600,000 to $1.3 million. Speaking to Brews News before the closure of its Expressions of Interest phase, O’Sullivan said the brewery was expecting around 350 investors to pledge funds.
But despite this turnout, Devil’s Elbow wrote that it not be going ahead with the proposed crowdfund on the Birchal platform, and that the decision “was not made lightly, but it was made for a variety of reasons”.
It is not the first brewery to back out of crowdfunding, with Toowoomba brewery 4 Brothers not proceeding with one last last year.
The Queensland brewery, which listed its campaign on PledgeMe, had progressed beyond the expressions of interest phase, but fell short of the $160,000 minimum raise.