You’re probably familiar with the crowd-funding platform, Kickstarter. But you may not be familiar with CraftFund, the first crowd-funding site specifically for craft breweries. While the concept is the same, the audience couldn’t be more different.
Below is an exclusive look into the origins and future of CraftFund through the mouth of founder, David Dupee.
Q: What was the driving force in creating CraftFund?
A: As a craft beer enthusiast, I thought it was time for the industry to have its own crowd-funding platform. There are two reasons for this. First, the craft beer community is distinct and passionate enough to justify its own platform. Platforms have popped up around niche industries with passionate followers such as gaming and film. Why not craft beer?
Second, breweries will need a platform to facilitate investment crowd-funding. Once the SEC writes rules to implement the JOBS Act, the average investor will for the first time have an opportunity to purchase shares in and become part owners of small businesses such as craft breweries. These transactions are required to take place through an intermediary crowd-funding portal.
Start-up breweries have primarily used Kickstarter for rewards campaigns (donation in exchange for gear and other rewards); however, Kickstarter has announced it is sticking with its rewards model and will not enter the investment crowd-funding space. Therefore, breweries interested in investment crowd-funding will need a portal to facilitate the transactions.
Q: How involved are you throughout the process with the start-ups?
A: The key driver for a campaign to reach its fundraising goal is the start-up’s own social network. However, crowd-funding is not just about fundraising. It is also an excellent opportunity to broadcast a message and expand networks. Because we are a niche platform we have the ability to partner with the start-ups in promoting their campaigns and expanding their networks.
We do this through interviews on our blog, social media promotion, and reaching out to local media outlets. Regulations will, however, likely affect our degree of involvement once investment crowd-funding becomes legal.
Q: Where would like you like to see CraftFund in 12 months?
A: We want to be the go-to crowd-funding resource for the craft beer industry. Because we think breweries will largely shift to investment crowd-funding once it becomes legal, our focus is on building an investment platform that meets the specific needs of the industry.
Within the next month or so we will be launching a redesigned site that seeks to educate the industry on this new law as well as build a community of craft beer investors. In 12 months we hope to have an SEC compliant portal connecting breweries with their crowds.
Q: What do you see as your biggest challenges to getting there?
A: Frankly, the biggest challenge is the unknown regulatory landscape. There is concern that the SEC will write stringent rules that render investment crowd-funding cost prohibitive for small businesses.
Q: If there is one thing you want everyone to know about CraftFund, what would it be?
A: CraftFund is not just for start-ups. Breweries of all sizes have the same two goals: (1) secure capital to make great beer and (2) engage customers to further a brand. Established breweries might choose investment crowd-funding not primarily for the capital but rather to build brand advocates and win shelf space in this increasingly competitive environment. We can help both start-up and established breweries connect with and mobilize their customers.