The Isle of Skye Brewery is to use crowdfunding in a bid to raise a minimum of £150,000 to fund expansion plans, including the development of a new visitor centre at its base in Uig.
Already over £11,000 has been donated by 15 investors since the crowdfunding bid went live this week on Scottish-based crowdfunding site Squareknot.
The brewery, which has been established since 1995, and is projected to turn over £800,000 in this financial year – 28% up on 2013 – is seeking to attract relatively small sums from a large number of people to fund a doubling of its business by 2017.
Owners propose to raise at least £150,000 through a combination of equity and reward crowdfunding, and this will be supplemented by debt and grant support from existing banking arrangements and Highland and Islands Enterprise.
As well as gaining equity and shareholder voting and dividend rights, investors will receive benefits-in-kind, including discounts on the brewery’s range of craft beers, priority access to limited lines, a say in the creation and naming of new beers and free entry to the visitor centre that will include a café/bar and extended shop.
All shareholders will receive a Skye VIP club membership card entitling them to attend the company’s AGM at the brewery.
Crowdfunding has proved successful in helping companies with a loyal customer base for their products to raise capital.
The Isle of Skye brand is already well established, its beers supplied to 380 licensed premises across the UK, including some major chains such as Wetherspoons.
The brewery is a popular destination among the 12,000 visitors to Skye at any time during the peak summer period and owners believe they can replicate the success of the Talisker distillery visitor centre on the island.
They have set an initial target of attracting 33,000 visitors per year with a projected income of £700,000 from entry fees to the visitor centre, souvenir shop sales and café/bar takings.
Kenny Webster, the company’s managing director, said investment opportunities would be attractive to both craft beer enthusiasts and professional investors.
“We have exciting and ambitious plans for the Isle of Skye Brewery and we are offering our valued customers the opportunity to be part of our expansion,” he said.
“Those who enjoy our beers and would like to support our development can pledge as little as £90, entitling them to a small number of shares, voting and dividend rights and some great benefits and discounts.
“Experienced investors who have more money to spend can buy shares at a discounted priced in the knowledge they are investing in an established business, under sound management and with a determination to grow.”
A minimum pledge of £90 will secure 10 ‘B’ Ordinary shares in the company, with voting and dividend rights, a special limited edition gift pack, a Skye VIP membership and an invitation to the company’s AGM that will include brewery tours, beer tastings, a barbeque and live entertainment.
Professional investors can buy ‘A’ Ordinary shares at £6.75 each – a discount of 25% on the price of ‘B’ shares. There are 25,000 ‘A’ shares available at £6.75, representing 10% of the total share capital. The minimum investment in ‘A’ shares is £3,375 for 500 shares. Professional investors can also claim 30% EIS tax relief on their investment.
Derek Bond, managing director of Squareknot, said: “As the principal Scottish-based crowdfunding platform, we are delighted to be working with such a well-known Scottish beer brand.
“This method of capital raising is ideally suited to a company like the Isle of Skye Brewery which has a distinctive product and a loyal customer base.
“By allowing customers to become shareholders, we will create a large group of brand ambassadors who will be happy to promote the Isle of Skye ales amongst their circle of family and friends.
“The £90 rewards offer would make a great Christmas or birthday present for a beer enthusiast, which we can deliver with a gift certificate. We will then send them their share certificate, gift pack and details of all the rewards as soon as the pitch is successfully completed.”
Mr Bond, a chartered accountant and co-founder of Squareknot, added: “As with all forms of investment there are risks associated with crowdfunding and any responsible crowdfunding firm will tell you that you can lose as well as gain from investing in private limited companies.”
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