raised $500,000 through an equity crowdfunding campaign in January last year, with 212 shareholders taking a total 12.5 percent stake in the craft brewer.
Why did you choose equity crowdfunding as a way of raising capital for your business?
Over the years we'd been approached by friends and family who loved what we were doing and asked if there was any way they could help us grow. I'd always been uncomfortable thinking about traditional investment and the strings that could come with it - a focus more on money and exit plans than on the lifelong journey I want in this industry. Instead I found the idea of having a load of smaller investors, who could exit a lot easier if they wished, really appealing. We have values that I'm not sure are in line with traditional investors - especially those who want to get rich quick - so we opted to use the help of people who had offered, and those who had thought about it but hadn't yet vocalised it.
You reached your $500,000 campaign target within the first half hour. What factors do you think made your campaign take off like that?
The half a million in half an hour absolutely blew my mind. During the campaign, I could only see the negatives - the holes in my thinking, the risks not fully addressed and the feeling that I could only do 70-80 percent of what I wanted to. I worked so hard on the campaign that I didn't have time to approach our list of 50 potential investors. So 12 hours before we launched the campaign we had a document that I was proud of, a mailing list of 700-odd interested people, but not a single dollar committed from anyone.
I really didn't realise how well we'd worked it until a few days later when I read Kat Jenkins' piece at Multitude about our campaign. I think we'd done a whole range of things, including already building a brand, product and place in the beer community that people liked and wanted to see more of; let people know what we were doing, and why, very early on - via press, social media and in person; and continually updated interested people in what we were doing and how our plan was unfolding. We also got lucky with the help from PledgeMe and their amazing group of supporters; released full information a week before we went live, and then travelled the country chatting with potential investors in the last few days; and we didn't try to change anything about the business to appeal beyond our base group.
On the other hand, what were the primary challenges associated with the process?
For a small business owner, running the day-to-day business on my own - especially with my co-founder/director overseas for almost the entire period of the campaign - it really sucked away my time. I worked 18-hour days, seven days a week, for about eight weeks. I took three days off during that time - and two of those were Christmas and New Year's days.
It really helped to have a bunch of creative and critical friends around me. Although I was doing all the heavy lifting, I was inspired and shaped by the people who proof read, edited, drew pictures and ogled financials. None more so than my wife, Fritha, who is the unsung hero of Yeastie Boys. She's my creative guide, my boss, my secretary, my mentor and my best friend.
One concern some business owners express about equity crowdfunding is then needing to manage multiple shareholders. What's been your experience of this?
Tricky shareholders is something that virtually everyone brought up in the lead in to our capital raise, but our experience has been the complete opposite. Our shareholders are proud to be involved with the company and they've become our brand ambassadors. The most we really hear from them is in regards to leads for places to sell our beer. I update our shareholders quarterly, which takes about a day to pull together some ideas, and we get great feedback around that. It certainly helps them feel engaged, which is exactly what we're looking for. We've had three shareholders sell shares since buying in, which take us about half an hour or so to complete, so it's not a great administrative burden at all. We also received some great feedback and advice around our AGM. A good thing about having engaged, active shareholders is you discover all sorts of skill sets among them.