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Funding sources for your craft beverage

  • 8 min read

Friends enjoying a drink for funding sources postWhile we may not have reached nationwide vaccination targets by Independence Day (and AB InBev wasn’t on the hook for that ridiculous bar tab), things are starting to look a little more “normal” in most parts of the country. Your team is welcoming guests to the tasting room with few if any restrictions. Sales are improving, perhaps equaling or surpassing pre-pandemic, peak seasonal levels. You may even be considering investing in additional resources, equipment, personnel and marketing to help build momentum.

Question: have you secured the funds needed to execute your plans?

We wanted to take a look at the variety of ways craft businesses are creatively sourcing capital for expansion projects. If your craft beverage business is flush with cash, perhaps you could share some advice 😉 Otherwise, read on for some ideas:

How does strategic investment make you more discoverable?

Why talk about money at this level? Because investing in your people and facilities will help you emerge from COVID-19 in a stronger market position. It may seem counter-intuitive, especially after the duck-and-cover we experienced last year. Doubling-down on customer-facing initiatives like the tasting room experience; product innovation pipeline; people and training; and awareness marketing to attract new drinkers will propel your business forward ahead of your peers and competitors. Now is not the time to be timid or complacent, and additional funding may be needed to capitalize on the opportunity.

Couple asking for money photo for funding sources postAsking for money is hard! You have to know where you can compromise, and what’s non-negotiable. For example, how much say in the management of your craft beverage business will investors have? And then there’s the pitch: born salespeople run towards these meetings, while others run away. Somewhere in the middle are the folks who study Guy Kawasaki and Peter Coughter, hoping to find their inner pitch artist. However you build the confidence needed to ask for investment, be aware of the market conditions surrounding your ask:

  • Understand how quickly the investment could be paid off/returned to investors
  • Focus on the numbers, using investment to accelerate towards your original goal
  • Try to be as objective as possible

The money needed to fund these projects is likely beyond the reach of your personal credit and borrowing against your assets (real estate, inventory, etc.). Start your search with those people who care most about your space and move outward from there. Understanding your audience and what they want/need from a business relationship with you will help clear a path towards their investment in your ideas!

friends and family

Family saving money photo for funding sources postYou’re excited about your tasting room and plans for expansion. Great! Understand that no one will ever be as interested in or passionate about your project as you are. Why throw cold water on your enthusiasm this early in the post? Because 9 times out of 10 the money will not come overnight: you’re going to have to grind it out, sometimes over months and years. Which is why proximity is important. Plant the seed with friends and family when you start thinking about expanding. Be sensitive to your family dynamic, because the last thing you want is for money to come between you. Consider offering your regular customers the opportunity to get involved, as they have an even more vested interest in seeing you succeed.

The first few months of [actively] pitching are critically important for tightening your ask. What often starts as a story told in-person will evolve over time into something more formal, delivered electronically, sometimes to people you’ve never met. Outline the opportunity and what-if scenarios, making it easy to understand what success looks like. Learn what areas need further explanation for people less familiar with the craft beverage business. Share the high-level research and estimated budget, then invite people to become involved.

seasoned investors

Gathered around computer photo for funding sources postOnce you’ve built momentum and energy around the idea – and possibly secured some investment commitments – it’s time to get more formal with your proposal. Whether you’re starting a new craft beverage business or expanding an existing one, having a plan helps structure the ask in a way that makes it easier for potential investors to say yes. For owners and managers with a corporate background, writing business plans may be second-nature. For others, presenting ideas at that level of detail may seem daunting. There are many templates and services available to help craft producers grow their business. SCORE is one such option, with a network of small business mentors and a library of resources available to get you started.

With a business plan in-hand, it’s time to pitch seasoned investors: a group more interested in their payback than supporting your idea. It’s nothing personal, they just aren’t in it for relationship currency. They want to understand performance measures like annual rate of return and dividends. Depending on the scale of the project, you may even be offering equity in the business. Start with hospitality industry veterans – people who understand the ins-and-outs of the craft beverage business. Consider presenting your ideas during investor speed dating or pitch slam events. Expand your pitching to angel investors and venture capitalists looking to invest in up-and-coming businesses with a high potential for growth and return. Clearly outline what you’re anticipating being able to deliver at each level of commitment. Remember: this likely isn’t their first investment in this space. Conversations can get downright uncomfortable for craft beverage producers when outside investors request some level of control or say in how the business is managed. It’s up to you to properly set and communicate expectations early in the process. And based on response from this group, you may have to adjust your original ask to accommodate many levels of investment.

sba loans

SBA loan application photo for funding sources postDepending on your project timeframe, you may find yourself short of your funding goal. There are lenders out there with a vested interest in the continued growth and success of your business. The Small Business Administration (SBA) is a federal agency dedicated to small businesses, providing counseling, capital and resources to help. During COVID-19 the SBA offered a number of relief options to help the hospitality sector weather the ups-and-downs of closures, restrictions and changes to operations. Your employees may have even benefit from the Paycheck Protection Program (PPP), one of the higher-visibility support options.

Loans are available for a variety of uses, including equipment purchase and facility expansion. Beyond the business plan, experts recommend the following when applying for a commercial loan:

  • Understand your personal and business credit scores
  • Know the lender’s minimum qualifications and requirements
  • Gather your legal and financial documents
  • Be prepared to discuss collateral

All of these funding sources collectively could deliver what’s needed for expansion. And the further out from friends and family investment you get, the more structured and challenging the relationship. Still coming up short? There is one remaining option: crowdfunding.


Your ask may be structured in such a way that it’s difficult to smaller, hobby investors to get involved. For example, a minimum investment amount could net an investor a share or percentage ownership in the company. For smaller projects, or to make up the difference between what was asked and committed, you may choose to ask for help from the public at-large in the form of crowdfunding the initiative. Lower-cost tiers are established with a set return, either monetarily or something more tangible (like merchandise or privileges at the tasting room ). Some popular services include: GoFundMe, Kickstarter and Mainvest.

Brewdog logo for funding sources postIn 2009, UK brewers BrewDog launched a highly-visible crowfunding initiative called Equity for Punks, a program that’s still offered today. Since launch, benefits to investors have included equity in the company (2,765% of their original value at one point), exclusive services through their Columbus, Ohio, DogTap Brewery and Hotel, merchandise, discounts and other bragging rights. Part of the program’s success can be attributed to brilliant publicity and the co-founders’ anti-business model. Share your crowdfunding efforts with your network and consider advertising to widen your reach. Social media, email, blogs and more traditional media help generate talk value around the idea. And don’t forget to keep your current supporters in the loop about activity and next steps.

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