How I raised $1.25 million to start my brewery

What If You Don’t Raise All the Money?

My offering documents allowed me to close the deal at $800,000, although that would’ve significantly changed my plans. I didn’t want to get most of the way there, only to have to return everyone’s checks because I didn’t hit my goal. Ultimately, I would’ve been happy opening a 10bbl brewery, even if that isn’t everything I’ve hoped and dreamed about.

How Many Rich People Do You Know?

Assessing how much you can realistically raise must be an utterly unemotional process because it has absolutely nothing to do with fairness. Profoundly unworthy businesses (and breweries) succeed at raising vast sums of money all the time, and yes, this is depressing. But you’ve got to play within your own limits, and for most people that means figuring out what your close friends and family are willing to invest. If you do better than that, it’s gravy on the potatoes.

Do You Have A Ringer On Your Team?

Raising money is not something most people do alone. Every step of the way I relied on the connections of family members to bring new investors into the fold. In fact, I wouldn’t have had the confidence to take on the project in the first place if my father hadn’t committed to helping me raise the money. My family couldn’t afford to finance the whole thing themselves, but they made it possible by opening doors for me that wouldn’t have been there otherwise (in addition to investing what they could).

Can You Recruit Some Help?

A few key investors also played important roles in helping raise the money. Very early on the securities attorney I hired, who has worked with start-ups for many years, agreed to invest in the brewery (this also had the happy result of making my relationship with him cash positive). I immediately incorporated this important vote of confidence into my pitch, and when other savvy investors got on board, I made sure prospective investors knew about it. Some investors even helped bring on friends and associates, and that ended representing a meaningful portion of the money.

You’ll Never Be Able to Predict It, Ever

Even after all the planning and refining, pitching was still a crapshoot for me. I’d go into meetings feeling supremely confident, only to leave deeply disappointed. I made calls to people I only distantly remembered and came away with big commitments. There’s just no way to know ahead of time how it’s going to go, or how much someone is willing to part with to turn your project into a reality. It’s baffling and confusing and frustrating and disappointing and very occasionally exciting.

It Takes Forever, or At Least It Feels Like It

It took me about 6 months to raise $1.25 million, which to me felt like an absolute eternity, but which I’m told by others is a short-to-reasonable amount of time. The process of pitching is exhausting, expensive, and repetitive to the point of numbness. It required me to become intimately familiar with projected cash flows, first year capital requirements, income statements, margin analysis, sales projections, gross margin analysis, and endless other worst and best case scenarios. All of that preparation contributed to the positive outcome, but repeating it over and over and over again wasn’t exactly the most stimulating experience of my life.

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17 thoughts on “How I raised $1.25 million to start my brewery

  1. As an entrepreneur also seeking to persue dreams…this article shows that it is possible…all while showing the challenges along the way

    I look forward to enjoying Modern Times Beer after your entire plan manifests!

  2. Pingback: How I Raised $1.25 Million to Start My Brewery | Modern Times Beer

  3. Congrats, Jacob! Given the relative lack of beer knowledge among your investors, I’m curious to know how you structured the decision-making process. Are all of them passive investors? Or does their business acumen give them the ability to shape your business?

    You may not be able to answer this publicly, but I know personally that this is an important issue to address prior to raising money — so both sides know their role once the business takes shape.

    Cheers and best wishes!
    Sean

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  7. I have a question as one that is considering a brewing venture, did you raise all 1.25M in cash? Were there any bank loans/small business loans involved? What kind of ROI/Benefits did you offer your investors? How many total investors did you end up needing and what was the mean investment amount?

    Thanks!

  8. Yup, all cash. No loans involved at this point, although I’m certain there will be eventually. Can’t comment on the exact deal I offerred investors, but the reality is that you’ll need to offer whatever gets you the capital. We have 12 investors, amounts ranged dramatically.

    Cheers,
    Jacob McKean
    Modern Times Beer

  9. Jacob, congrats on finalizing your funding. I have been following you and cheering on your efforts. I am too looking at a similar fund raising effort. My question is around equity, if you are so willing to divulge, how much by % of the company did you have to give up? What was your valuation number? Good luck and look forward to tasting the product soon!

    Thanks for your time,

    Gary

  10. How much total equity did you end up giving to investors in order to lock down the 1.25mil? If you can’t give the exact amount, please share just a range, ~10%? ~20%, ~50%?? More?

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  12. hello Jacob , I want to take over a state owned brewery in my country that is currently not producing . can you help me with interesting investors?
    please respond .

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