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Sector Highlight – The Craft Beer Industry and Regulation D

Craft beer brewing has been a high growth sector for many years. Each year we see an increase in the number of early and expansion stage craft brewing operators using the Regulation D program to raise capital for start-up and growth of operations. Craft brewers currently provide an estimated 108,440 jobs in the U.S., including serving staff in brewpubs. Growth of the craft brewing industry in 2012 was 15% by volume and 17% by dollars compared to growth in 2011 of 13% by volume and 15% by dollars (Source: Brewers Association).

Craft brewers have some advantages in executing a securities offering under 506(c) to raise capital.  Most of these operators have started as small micro-brewers and usually have a core following of fans for their brews.  In addition, many have developed solid social networking assets which can be deployed to promote the 506(c) offering. The marketing mantra of “Like our beer? Buy our stock!” can be fully exploited under a 506(c) offering with general advertising of the investment opportunity to accredited investor fans of the brewer and beer in general.

We call this a “passion play” and involves invoking the passion an investor has for the specific business or industry to attract investment. It is very similar to how our green energy clients leverage the passion for supporting environmentally friendly technologies and business models to raise capital from investors.

Call us today to discuss your company and the project of raising capital under Regulation D!  (970) 484-1109.

Author: admin

Thursday April 24, 2014

Category: Capital Formation and Regulation D

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