Over recent years, equity crowdfunding has helped to open up the investment process from wealthy individuals and venture capitalists to a larger pool of investors (i.e. the ‘crowd’).
Scottish craft beer brewer, Brewdog, is a great example of the equity crowdfunding model. Brewdog was founded in 2007 and since then it has raised over £60 million and attracted over 73,000 shareholders through its crowdfunding scheme ‘Equity For Punks’. The company is now valued at over £1.7 billion.
The company is now on its fifth round of fundraising, which ends in October 2018. It intends to use the funds raised during this round to facilitate the opening of a new brewery in Aberdeenshire in order to keep up with consumer demand.
Shares through Equity For Punks V cost £23.75 each and are issued in blocks of two, (meaning the minimum investment is £47.50). On top of shares in the company, investors receive a copy of Brewdog’s latest book ‘Craft Beer for the People’ and gain access to the AGM (or ‘Annual General Mayhem’ as Brewdog describes it) where Brewdog beer is available aplenty. The company also offers a referral benefit scheme to expand the investment pool by encouraging current investors to promote the brand to their associates.
The next step for the company appears to be a flotation (the founder has confirmed he intends to float by 2020) – this will create a marketplace for the shares in the company by allowing current investors the opportunity to sell their shares on an exchange, something that is not currently available. Expansion into Asia and Australia and the creation of a TV network are also planned.