Denver sake brewery funds expansion through equity rather than venture capital – Greeley Tribune

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The founders of Colorado Sake Co. are, of course, big believers in the future of the Japanese rice spirit.

Despite the COVID-19 pandemic, the Denver-based company doubled its 2019 revenue last year and is pursuing a new way to finance its next stage of growth. She sells shares of the company through the online platform StartEngine and wants to be at the forefront of the expected growth of the sake market.

“We could grow slowly, but why not grow quickly and have lifetime owners and lifelong regulars and then just give it back to people? Colorado Sake Co. co-founder and CEO William Stuart said.

Through what’s known as a Regulatory Crowdfunding Offer, or Reg CF, Colorado Sake Co. sells stocks for $ 1 a piece, with a minimum investment of $ 250, according to its StartEngine page.

Established under the Federal Jumpstart our Business Startups (JOBS) Act of 2012, crowdfunding offerings allow people who are not accredited investors to buy, giving startups access to a wider range of potential backers. of funds. The outlet for raising capital allows companies like Colorado Sake Co., which Stuart says previously sought but could not find support in the venture capital community, to turn clients into investors.

“We had people who came into the tap room and said they were investors,” Stuart said. “They’re there. They can see we’re busy. It’s a great feeling. Plus, VC Money comes with so many conditions. These people can support our growth.

In the eyes of Joe Daniluk, another business owner who used StartEngine to raise money for Denver-based WaterBlocks, the JOBS Act is “truly the most amazing thing that Congress has done.”

The main product of WaterBlocks is a locking system for portable plastic flood protection barriers. The company’s now closed StartEngine offering has raised just over $ 574,000 from 1,258 investors, but Daniluk is moving to a new middleman, TruCrowd.com, to continue raising capital.

After launching its offering on June 22, Colorado Sake Co. raised more than $ 172,000 from 2,017 investors on Friday morning, according to its StartEngine page.

The maximum amount the business can raise as stated on the page is $ 1.07 million. As reported in a StartEngine blog post in March, the Securities and Exchange Commission moved the upper limit on the amount of money a company can raise through regulatory crowdfunding to $ 5 million this year.

Representatives for StartEngine declined an interview request, citing regulations that require the company not to highlight individual companies with active investment opportunities on its platform. The company says in its online marketing materials that it has hosted more than 500 successful offers grossing over $ 350 million; its platform has more than 500,000 users.

Stuart said StartEngine had contacted him to register on the platform.

StartEngine valued Colorado Sake Co. at $ 12 million. The company charges between $ 4,000 and $ 10,000 for a financial review of companies, then collects between 7% and 12% of the capital raised through regulatory crowdfunding offers – with an additional $ 10,000 raised at the close of an offer , according to its website.

Michael Jimenez, left, and Max Eliopulos box Sake Seltzers at Colorado Sake Co. in Denver on Thursday, July 15, 2021.

The capital injection comes at a critical time for the sake brewery. Beyond its sales room at 3559 Larimer St., which hosts stand-up comics and began serving sushi during the pandemic, the company has moved its brewing operations to a facility on North Garfield Street six years ago. weeks. There, Stuart and his business partner Heather Dennis are perfecting a hard sake-based seltzer that will be available at Whole Foods stores in Colorado in August, Stuart said.

“Obviously the seltzer boom is here to stay, but if we can get into this conversation around sake it only further promotes the industry and puts us in a different position in liquor stores,” Stuart said.


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