Now Armstrong and his partners in
In mid-March, the company began selling shares at
For a company that began by selling pints and growlers to walk-in customers out of a four-car garage, that's progress. And Armstrong sees room for more.
“We've talked to cruise companies and big-box retailers about filling orders, but we've never been able to go at them because we don't have the volumes they want,” he said. “We're in Safeway and other stores and restaurants but don't want to jeopardize those relationships and make promises but not produce.”
The brewery also hopes to finance a recent move to a larger location directly across the street from
Crowdfunding allows anyone to make financial contributions to business ventures or passion projects. Equity crowdfunding includes an investment opportunity, allowing startups and smaller businesses not traded on an exchange to sell stock in themselves in return for shareholder backing.
But investors in Baranof should temper any expectations of profit. Although billed as an investment, the act of buying a share of the brewing company more closely resembles a donation at this point. Shares have no market value and indeed there is no “market” to sell them on, meaning that even if the company rises in value, there is no way to monetize those gains.
The model is similar to fan ownership of the
Sale of the company to a new owner might be another way for Baranof shareholders to realize gains, but there is no provision for compensating shareholders should the brewery be sold, even if the transaction turns a profit. (If the
But where the
“I'm telling everyone that within five to 10 years, we will pay dividends,” Armstrong said.
Typically equity shares in a company come with voting rights or some modicum of say over how the company is run. Armstrong and his other original partners plan to let smaller shareholders have some input on brewery matters through the formation of a corporate board.
The makeup of the board closely tracks the ownership structure. The crowdfunding sale consists of 37 percent of the
“We wanted to share the brewery with everybody and were not looking to be sole operator-owners,” Armstrong said. “We always wanted multiple partners to be involved.”
Usually, when a company offers stock to the public, it must register with the state or federal
At least 36 states and the
“Before the law's passage, you had to go through a certified financial adviser and hit up your closest friends and family for investment,” Costello told
Investing in any single business is inherently risky and the Innovating Alaska Act protects investors, to a point. There's a provision limiting an individual to investing no more than
The law requires investors to verify that they're aware of the risks, with all share purchase agreements containing the following statement: “I acknowledge that through this Subscription Agreement, I am investing in a high-risk, speculative business venture, that I may lose all of my investment, and that I can afford the loss of my investment.”
Risk also extends to the brewing company, should it disappoint shareholders and damage the reputation of the owners in the community of 9,000 people. Armstrong has lived in
Enthusiasm for the brewery's share offering has exceeded Armstrong's expectations. Upon opening the equity sale in mid-March he had aimed to reach a minimum goal of 50 shares, or
“I expected our local customer base to come on board, but it's amazing to meet people I didn't even know,” Armstrong said. “It's a little bit of pressure, but it's a great feeling to have people trust us that much and have that much faith in our product.”
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