In 2012, Crowdfunding platforms raised up to $2.7 billion and funded more than 1 million campaigns, according to a study conducted by Massolution. This result represents an 81% increase in comparison to year 2011. Needless to say, there has been a significant shift in how new businesses fund themselves during their starting up process.
Fully aware of this after working for a crowdfunding platform himself, Travis Benoit, (also a former Wall Street employee), decided to test sail the entrepreneurship waters by creating his own crowdfunding startup.
Having acquired a taste for craft beer in the mid to late 90’s during his student days at the University of Vermont -Travis thought it convenient to pursue a business that could combine his finance skills with his love for beer and create an ideal work blend.
What came out of that mix? Crowdbrewed! – a niche-market crowdfunding platform dedicated to the beer industry. We noticed his awesome paper The Crowdbrewed Press and wanted to get the scoop on his story.
Why did you decide to start CrowdBrewed.com?
I have always been passionate about beer, more specifically craft beer. I think it is important to be passionate about what you do for a living as it helps quite a bit with regard to waking up in the morning. They say “if you find something you truly love you will never work a day in your life”!
Aside from that, there are a number of breweries that go undiscovered due to a lack of funds. I want to be able to help them get the funding and bring their brand and their flavor to the masses.
What made you think about niche crowdfunding?
There are over 9000 registered domains referring to crowdfunding and many companies with a vast scope and no direct focus. I believe niche market crowdfunding is the wave of the future. Why not go to a source that is 100% focused on what the campaigner is looking to do than to a source that is only 3% knowledgeable about a specific market?
Craft beer has increased to its highest levels (number of breweries and brew pubs) since the 1800s. The numbers are growing exponentially. There is no other crowdfunding portal to our knowledge in the world that is currently “live” and taking on projects focused solely on the beer industry. We plan to be the go-to for all things craft beer related.
Other than focusing on just one market – “craft beer” – what makes niche crowdfunding stand out?
Closeness and personal treatment! Our Chief Marketing Officer/ Chief Beer Officer, Mark Slattery, together with the rest of the team including myself, will be working with each and every campaign that comes to our site, we will review it for approval, nothing will go on the site without our assistance and feedback. That’s what differentiates us from the larger competitors.
What kind of projects could benefit from CrowdBrewed.com?
Brewers and beer lovers looking to connect and to expand their favorite beer line or products are using CrowdBrewed. In addition to breweries, CrowdBrewed supports the entire ecosystem of beer. CrowdBrewed welcomes any subset to the industry such as hops farms, craft beer gardens, craft beer festivals, bottling plants and even pubs that support craft beer.
CrowdBrewed was designed for craft beer enthusiasts to support one another and build presence and get project funded. From home-kit brewing to mobile apps and games, there’s a place for every craft beer related project on our platform.
What makes a successful crowdfunding campaign for craft beer?
First and foremost it is having a great product. Differentiation. And strong Social Media and PR outreach.
Crowdfunding platforms aren’t stores with aisles and aisles of people browsing. Crowdfunding platforms are intermediaries for those seeking funds to connect with donors in exchange for rewards.
Social media is one’s outlet to the world. I can’t stress enough the importance of social media in crowdfunding. All it takes is one person to spread your brew and brand like a virus; your customers are the people that keep the lights on – reach out to them, send mailers, keep them informed. They are your biggest and most loyal fans.
Also not to be underestimated is the power of a video for your campaign. It shows the human side of your business, brand and brew. Make one – even if it’s made with a smartphone!
Why do you think many businesses now prefer to rely on crowdfunding than taking out a bank loan?
Bank loans are very hard to come by since the market demise of 2008. The number of bank closings and consolidations over the past four years making loans much harder to get. Banks require collateral and exceptional credit. In many instances one or both are not available by the loan seeker.
Crowdfunding gives those with limited access to necessary capital the opportunity to seek funding from the public directly as opposed to relying on banks as the primary source for funding. The main advantage of crowdfunding over traditional funding is that it does not have to be paid back and that the investments made are done so either out of the goodness of someone’s heart or in exchange for an item, product, service or “reward”.
What’s your advice for others thinking of starting a company?
Do your research and follow a plan!!!!! Plain and simple!
I would say go for it. Write the business plan and follow it step by step. I have worked for companies where they have completely lost sight of the initial vision. Find something you truly love and devote yourself 100% to it. Starting a company is a 24/7 job so be prepared to do more than you have ever thought you could do in a 24 hour day.
One last thing, can you tell us what’s your personal choice of beer?
It is very difficult to pinpoint a favorite beer as I have been a beer drinker for as long as I can remember. There are many microbreweries producing tasty, different and edgy beers. For example, Lagerhead in Southern Florida produces a basil infused IPA which is to die for and on a different note there is also the Harpoon Winter Warmer, a medium body seasonal copper ale. It is a nice beer to have around the Christmas holiday season and has a finishing taste of cinnamon and nutmeg. All in all, there are just too many beers out there to really put a finger on a specific brew.
Have you ever followed or participated in a crowdfunding campaign? How was your experience? What’s your take on niche-market crowdfunding?
If you in the brewing industry and are thinking about expanding or raising money for your brewhouse or just looking to connect with others, don’t hesitate to reach out to Travis.