Crowdfunding: The Big Questions
Why Crowdfunding? In-Depth Q&A
Around a month ago now we announced our intentions to raise money to grow the brewery through equity crowdfunding on Crowdcube. Since then, we’ve worked tirelessly to make sure as many people as possible see what we’re doing, why we’re doing it and what we’ve got to offer.
As part of that, Darron has been holding Q&A events up and down the country (with some pretty tasty beers alongside, of course). They’ve proven to be really popular among investors and potential investors alike, but crucially for us we’ve picked up an idea of how people perceive our pitch, things that we’ve presented clearly or not-so clearly, and of course some questions that come up every night that are evidently very important to our followers.
So for that reason, we’re attempting to address some of the key themes today, going beyond the introductory announcement that we posted.
Question: Will growing bigger change the beer and your ethos?
While we don’t have world-domination ambitions, we certainly do intend to keep growing. We’re building a quality, sustainable brand that contributes to the beer scene, looks after its team and stays true to its philosophy. We are minuscule in the scheme of things in a market that becomes harder with each and every buy-out. This next round of planned improvements and additions allows us to brew better beer than ever, and if you look at our pitch deck, you’ll see that our business plans do not involve any deviation from the creative, passionate approach to beer that we’ve always had.
Question: Why do you need to crowdfund? Couldn’t you go a different route?
Firstly, it’s worth saying that although we’re a profitable brewery, all of our profits since day one have been re-invested in people, equipment, barrels, processes, space etc. etc. So we certainly do need more capital to take the next step. Could we borrow more money to do this? Even with overfunding, we still will be borrowing more money. Have we been approached like other breweries by bigger companies? Yes.
But we see a unique group of people actively looking to support independent breweries and share in their successes. The great thing for us is bringing on board that excited, passionate band of investors that are keen to be a part of our journey. We want to grow sensibly, sustainably and with the beer at the centre of everything we do - and this seems the perfect way to do it.
Finally, let’s talk canning lines. The QC philosophy has driven Siren and indeed it's also why we're looking to raise such a significant amount in this campaign - because we don't want to just bring in any canning line - we want a top-rate system that meets or exceeds the quality that we currently get when bottling. For better or for worse, we have stuck to our guns on this and will not start canning until we meet the right standards.
Question: What makes Siren a great brewery to invest in?
We’ve worked hard over the years to build a solid reputation - whether it be in the quality and consistency of our progressive flagship range, the excitement of our one-offs and collaborations, or the adventure and ambition of our barrel ageing and wild ferments. In addition, we’ve already got a strong customer base of bars, restaurants, bottle shops, online retailers, supermarkets, independent and national pub groups… the list goes on. Despite being a little further established than lots of breweries are when they go out for crowdfunding, we’ve also set, in our opinion, a very fair valuation on the company. This should offer plenty of value for those that want to get involved, and being able to do that was a key factor in our decision to go down this route.
Download our investor deck from crowdcube.com and check out page 14 for a view of how we’ve valued Siren in comparison to other similar raises in the industry.
Question: You’re raising £750,000 but you’re looking to purchase a canning line that costs £800,000+, along with investing in other equipment. How does that work?
We have laid the groundwork over the past two years with significant investments in our brewery, including a brand new brewhouse and centrifuge. We’ve now got a plan for how we step up to the next level and estimate it’s going to cost upwards of £1.2m investment. It’s a big jump, but we think that the excess demand that cans will bring needs preparing for. We set a £750,000 target because we can achieve everything we need to by financing the additional equipment with competitive asset finance arrangements. Every pound over the £750k we raise will go towards improving the equipment specifications we will choose, whilst also lowering the increase in asset finance required. For example if we raise £1.1m, we will purchase a different canning line, with more options that help us scale than we would if we just reach £750k, in the process we will also lower our need for extra loans by about £100K. Which keeps the pressure off the business forecasts going forward.
Artists Impression of Siren Cans.
Question: I thought there would be more free beer in the ‘rewards’?
There are a series of rewards for investing which increase depending on the investment level. These include discounts, exclusive souvenir items, brewery tours and even some experiences like joining us for a Maiden blending day. We hope and think that you’ll find these rewards attractive, but it’s important to keep two things in mind.
1. It’s a balancing act, and we didn’t want to promise anything that would incur so much cost in fulfilment, including shipping, that either we felt the raise wasn’t worthwhile, or we failed to fulfil the offer (as we know has been the case with other raises).
2. We want to offer a genuine investment to people that gives every chance of a good return. For that reason, we have valued the business very fairly and prioritised that over incentives. Don’t be too disheartened though, we don’t think our investors are going to be disappointed with the plans we have for the annual investor party, or indeed some other surprises we have in store.
Question: Where can I get further information about your company, its history and the detail of this raise?
Although the Crowdcube page has a summary of our pitch and a nice video, the ‘meat’ of the proposals is in the ‘Restricted Documents’ section of the page. You need to request access to these, and they will then become available to download. Here you’ll find detailed information about our investment plans along with some great background on the journey that has brought us to this point.