Crowdfunding does your brewery good.
Should you use a crowd funding platform to help raise capital for your brewery or brewery project? The resounding answer is YES! Regardless of the outcome of the campaign, it is always a win. 
There are many crowd funding websites out there, each with their own type of specialization. The most popular crowd funding platform is Kickstarter.com. Since we used Kickstarter to raise capital for our brewery, our experience will refer to this specific platform.
“Backing a project is more than just pledging funds to a creator. It’s pledging your support to a creative idea that you want to see exist in the world. “
– Kickstarter.com
Before we dive into the specifics of creating and managing a crowd funding campaign, we do want to admit that even though we did everything correct (per our research) for our Kickstarter campaign, we did not reach our target of $20,000. But we succeeded in getting the exposure we needed. This is the win we were talking about in the opening paragraph. Additionally, it is the “experience” we gained from this campaign that we wish to pass on to you. Check out our Rustik Brü Kickstarter Campaign and let us know what you think.
Which one do I use?
The first questions you may have about crowd funding platforms are: Which one do I use or should I use them all? As a brewery, we recommend investigating all the different crowd funding companies. Evaluate the funding structure, fees and how payments are made. Each crowd funding platform has 
it’s own specialty, but doesn’t limit other industries. As an example, Kickstarter is known for specializing in projects based on music, books, films, art and gadgets, but has hosted many brewery campaigns as well. Other platforms may specialize in restaurants or small business projects. The specialization generally attracts people with a similar passions and are interested in supporting those type of businesses or projects. This is by no means meant to discourage you from using any crowd funding platform. As a brewery, most of your support will come from your friends, contacts, and friends of friends anyway.
In all honesty, as long as the crowd funding platform uses the “All or Nothing” funding format, any of them are fine since most of your pledges will be funneled through the links you or a third party advertising company will provide. There are devout and generous crowd funding backers that spend time on Kickstarter looking for new and interesting projects to help fund. It is possible that generous people surf the projects on the other crowd funding sites as well. But again, our experience comes from Kickstarter.com.
Since Kickstarter.com is the most popular crowd funding platform, we chose Kickstarter for this reason. We knew most of our pledges would come from friends and their contacts, but we were hoping to attract pledges from active crowd funding backers. 12% of our pledges came from active crowd funding backers who had stumbled across our campaign by surfing through the Kickstarter projects or were led to our campaign via our advertising campaigns. The rest of our backer population are known supporters or friends of friends.
Multiple campaigns?
Should you use multiple crowd funding platforms? The answer is no, at least not at the same time. Stick with one campaign. There is a lot of work and maintenance that goes into a crowd funding campaign. You may not be successful in meeting your crowd funding goal, but spreading your campaign out over several platforms will only diminish your chances of success. Sally Outlaw, founder of the crowd funding platform Peerbackers and author for Crowdfunding Academy, writes extensively on the topic of crowdfunding on multiple sites and how it can hurt your campaign. We followed this advice when we set out on our campaign. We highly suggest taking the time to do your research and understand crowd funding before you get started. Sally writes about several topics on crowd funding, along with a book, “cash from the crowd”. You can view the articles in more depth here:
http://crowdfundingacademy.com/
A great video is your first impression.
Most crowd funding platforms will advise you to create a video to promote your campaign. After all, a video is a quick way for a someone to peer into the story of your brewery. Kickstarter says, “Your video doesn’t have to be super pro looking. Some of our favorite project videos have a very DIY feel.” Kickstarter goes on to state, “…projects with a video succeed at a much higher rate (50% vs. 30%), and they also raise more money.”
We agree with the thought of making a video, but we feel it is very important to make a great video. Take the time to plan the video and spend the money if necessary. The video is the first impression anyone will have of you and your brewery. If the production of your video is low quality, what does that say about your passion, your brewery? Making a quality video will take time. We spent four months planning, recording and producing our video. Most of the time, we had friends who donated their time, equipment and efforts to see this video to completion. If we were to hire a video production company, we would probably spend between $3,000 to $5,000 for a two minute video.
Preparations before your campaign.
As the production of your video wraps up, begin your checklist for your crowd funding campaign.
- Make a detailed budget of your campaign costs. Use this as a guide to set your funding goal. This includes the cost of the rewards, the transaction fees and most importantly: the cost breakdown of your project. Examples are: kegs, fermentors, or wooden barrels.
- Look closely at other brewery projects. Examine both failed and successful campaigns. Single out reasons why you believe the projects were failures or successes and use that information to plan your campaign. Examples are: What is the quality of the video? Are the rewards worthwhile? Does the brewery have an interesting story or passion? Is the campaign funding amount a reasonable goal? For Rustik Brü, a funding goal of $20,000 was reasonable. From our comparison of other projects, we found that this amount was the highest we could go and still be potentially successful.
- Brainstorm on what rewards to offer, make the rewards worth the pledge level. We set our pledge level to reward ratio based on an 80% profit margin. For example, if a pint glass plus shipping costs us $5, we can list this at the $25 reward level. We personally don’t like rewards that give you a ‘thanks’ or a shout out on social media. If someone is going to give you part of their hard earned money, give them a comparable reward!
- Have a plan for spreading the word about the project. Examples are: social media, press releases, advertising platforms and friends.
The campaign has launched.
The campaign setup is complete. You followed the tips and requirements for creating your campaign. After a couple of days waiting, the payment account has been set up, verified and approved. The crowd funding personnel reviewed your campaign and approved it. Now you are ready to launch! You marvel at the hard work you put into this project and feel anxious to see what kind of public response you will receive. But the work does not stop there. Once the campaign launches, you will have frequent tasks and interaction with your campaign that are vital to you successfully meeting your financial goal.
“I am fond of saying that crowdfunding is not a ‘post it and forget it’ proposition.”
– Sally Outlaw, founder of Peerbackers
Generally speaking, the two most active parts of your campaign will be in the first week of your campaign launch and the last week before your campaign ends. It is up to you to sell your campaign. Unless you are designing a gadget that everyone must have, you will have to do a lot of work promoting your campaign. Unfortunately, breweries are not on the list of ‘must haves’, so the campaign will not sell itself.
How do you promote your campaign? First you take the free approach. Use your social media accounts to advertise your campaign, start a blog, and/or update your website. Ask your friends to share the campaign and get everyone behind you. Let your passion for this business shine brightly. Weekly or biweekly posts and advertisements on social media is a must. You may feel that repeating posts or reminders may seem annoying to your contacts, but it is necessary. In many cases you will have friends or contacts who want to pledge, but keep putting that action at the bottom of their ‘To-Do’ list. So frequent reminders will keep your campaign in the forefront of everyone’s mind. You may need to remind your friends that pledge amounts are only visible by you. We had friends who wanted to contribute, but felt $5, $10, or even $25 would be an insult to us. So they didn’t pledge! That is simply not true. Make sure you let your friends know that every little bit helps.
While your campaign is active, you will receive numerous solicitation emails from companies that specialize in crowd funding advertising. Depending on the packages they offer, they promise different levels of exposure throughout the country. This may be via press releases in newspapers, national TV news spots or through their social media contacts.
We paid a crowd funding advertising company around $100 to promote our Kickstarter campaign. The analytics reports showed the exposure they promised. But since we didn’t design a ‘must have’ gadget, we didn’t receive a single pledge from this particular advertising campaign. So we don’t recommend spending money on brewery campaigns through crowd funding advertising companies. We had similar results with Google Adwords. Google Analytics showed that we had a great reach. We paid around $100 for this campaign, yet not a single pledge came out of that campaign as well! We do recommend using Facebook Ads. It was difficult to measure which pledges came directly from this advertising campaign and which ones came in from our weekly posts/shares. Through Facebook, the amount of exposure we received from Facebook Ads and paying to boost posts was astronomical compared to the other two advertising platforms combined. Through Facebook Ads and boosting posts, we spent around $100.
The return on investment.
Our Kickstarter campaign was not successfully funded, so why do we consider this campaign a success? Exposure is how we see this campaign as a success. We see this as a great advertising tool that announced the development of our brewery to the local public. Now, everyone knows we are coming to town and we are gaining support. The Kickstarter campaign is a great marketing tool. Since the Kickstarter campaign, the number of Rustik Brü Facebook ‘likes’ has tripled. The Rustik Brü Kickstarter campaign caught the attention of a local news station and featured our story on the six o’clock news. The daily traffic through our blog and website has increased substantially as well. So whether you can successfully reach your funding goals through a crowd funding campaign or not, it will always be a win for your brewery.
innovation for homebrewing equipment. The American Homebrewers Association (AHA) estimates 1.2 million Americans are currently making beer at home. West Virginia alone has 11 homebrewing clubs scattered throughout the state.
Rustik Brü Blog - A Morgantown, WV Distribution Brewery 