When three business partners wanted to raise $220,000 to get a bank loan and open up their own restaurant, the Northbound Smokehouse & Brewpub in southern Minneapolis, they at first tried to the usual rout of finding investors and offering a voting share in the restaurant, reports The Atlantic’s City Lab.
But those investors didn’t know much about the restaurant business, so they tried a different tactic when friends and family offered up a few grand here and there.
“They were, like, ‘I’ve got a few grand, but I don’t have too much money,’ ” one business partner recalls. “And people kept saying this over and over, and we latched onto the idea. Why not just take a couple grand from everybody and then we’d have all the money we’d need?”
Ding ding ding. The plan they settled on? Those who invested $1,000 could get free in-house beer forever and ever, or as long as the pub stayed open. Or they could receive 0.1% nonvoting equity in the company for every $1,000 invested. A $5,000 investment got investors 0.5% equity AND beer.
The brewpub is now a registered LLC and hit its $220,000 goal, and has been thriving for two years now, giving away about 17 free beers per day. All told, there were 46 investors who took the first option, 42 chose the second and another 30 who took the third.
Yes, that means 72 people have free beer for life, and you don’t. Better start looking for another brewpub offering that kind of deal, good luck!
*Thanks to Jim for the link! Time for you to move to Minnesota.