Friday 3 March 2017

CROWDFUNDING

It's said that being rich means never having to spend your own money, and so it goes with successful businesses looking to expand.  Such companies always find somebody else to pay, whether it be in the form of share issues, outside investors or bank loans.

Small Craft breweries are in the position that they generally have 'goodwill'.  Beer is associated with good times and GOOD PEOPLE, so it's natural that it engenders warm feelings in its consumers.  And so many breweries wishing to fund ambitious expansion plans have, naturally, exploited this with Crowdfunding.  They issue a prospectus, usually named in a emotionally leading way inviting those interested to emotionally identify with the brewery and its intentions, and give various tiers of investment with increasing levels of benefits associated with them.

Usually, said benefits involve discounts on beer from the online shop, or maybe a yearly invite to an Annual General Meeting held in a remote location at an inconvenient time of year.  But that doesn't matter.  To those investing in the crowdfunding scheme, the money or the benefits are of little importance.  In such vacuous times as these, people endlessly seek things to identify with.  And a few hundred pounds given to a Craft Brewery shows to others that they are a good person, and committed to the future of a small business involved in doing Good Things.  Everybody wins.  The brewery gets it's cash for minimal outlay, and the Crowdfunders get a warm fuzzy feeling inside.

Until, of course, the day the funders want to cash in on their investment.  That might be difficult.

3 comments:

  1. Best just to regard it as a donation, really...

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  2. It isn't investment for financial return.

    The best analogy is the guy that buys 1 share in his favourite football team to have a certificate he can put in a frame and put on the wall.

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  3. Very good analogy.
    "Investors" in brewers/ craft bar operators also often justify it by persuading themselves that the discounts on their prodigious consumption mean that they will soon get their money back.

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