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Forbes - Savings Itself For The Right Investors, A Brewer Crowdfunds A Loan

Forbes - Savings Itself For The Right Investors, A Brewer Crowdfunds A Loan

Robb Mandelbaum

When I reached Marie Fox on Thursday afternoon last week, she and her husband Jamie had a little over 24 hours before they opened the doors of their Gunbarrel Brewing Company in Boulder, Colorado, for the first time. Already that day, she had put volunteers, a retired couple, to work refinishing the tables. She paid a visit to Home Depot to pick up light bulbs for the walk-in cooler and paint for the picnic tables, which she had found on Craigslist. She spent some time tweaking the wireless network that would run her point-of-sale system. And just before I called, she finished an email to her lenders, inviting them to what she called a "super soft opening." She acknowledged that she was a little late in getting to them. "We've had our noses to the ground working so much," she said, "that we haven't had time to give them an update."

Crowdfunding, of course, is in vogue now, in theory if not in practice, but it typically involves selling small equity stakes. The Foxes decided to go a different route — and one that is much less expensive for the business. The Gunbarrel Brewing Company's creditors are a dozen (so far) people from around Boulder who together have loaned the startup about $175,000 in aggregate. In return, they are earning between 8.5 and 10 percent annually on their investment, an interest rate that would make many established companies envious — plus some perks only a brewery could offer, including a free monthly tab over the five-year life of the loan, free event-space rental, and barstools named in their honor.

The Foxes didn't exactly need this money to open the modest brewery they had initially intended. But recruiting investors turned out to be sort of the culmination of a plan to carefully cultivate supporters from almost the moment three years ago when they decided to launch the brewery. They had been saving it for retirement. Jamie was a neuroscientist by day and home brewer on nights and weekends — until he finished his post-doc work and realized that jobs for neuroscientists are hard to land. Marie is a marketer, and her plans for getting the word out are as fundamental to the enterprise as Jamie's recipes. While he refined those, she honed an outreach plan that emphasized neighborliness.

The Foxes bottled and delivered Jamie's sample batches to friends and fans around the area. "We would give it away for free," Marie Fox said, "because that's all we could do." They rented out a Denver brewery to brew their own beer and then throw a big party to drink it. And beginning in the fall of 2015, the Foxes put out a call for backyard fruit that would otherwise go to waste if they did not turn it into beer. The Foxes imagined apples and peaches, but "people starting coming out of the woodwork with all kinds of other things: plums, currants, gooseberries, and raspberries," she said. "Often we would go pick it ourselves. And we would talk to the people." This "found fruit" project concluded with a backyard party; donors got to take home a case of beer made from their contribution as well as a sampler pack of the others.

In the interest of full disclosure, I should note here that one of those neighbors who offered up plums — not brew-worthy plums, it turned out — was my brother, who became a fan of the Foxes. When they decided to borrow money, he was one of the people who signed up to lend.

Around the time of the second found fruit project, two years after they started looking for space, the Foxes signed a lease on a building at the edge of an industrial circle in the northeastern corner of Boulder— a building where, serendipitously, brewing equipment was once made. Breweries, Fox says, seldom open with more than 6,000 square feet; this building was 20,000 square feet. The Foxes anticipated growing into the space, but as they waited on their permits, they began to consider the possibilities of adding new brewing and storage capacity sooner rather than later.

"There are these articles out there about Boulder businesses getting financing for some crazy thing," Fox said, "and we thought, 'we're two level-headed people, and it's a local business,' so we thought we'd cast the net out there." The Foxes set a target of $280,000. "We weren't counting on raising anything," she said, "but we thought we had to try."

Read the rest in Forbes>

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