More than 130 beer lovers set to crowdfund new Victorian pub with pint-sized investments
Beer lovers can chip in to own a slice of a new Victorian sports bar for as little as $50, in what will be Australia’s first equity crowdfunded pub.
The Sporting Globe Plenty Valley, set to be part of Westfield Plenty Valley’s $80 million redevelopment, has has so far secured 133 groups who have expressed interest in chipping in $680,000 – close to the $700,000 target.
The pub, due to open next month in Mill Park in Melbourne’s north, will have capacity for 300 people and a beer garden.
Fancy a chance to enjoy discounts on your next pub visit? Photo: Supplied
Equity crowdfunding issues shares of the business to investors while also providing financial returns, which means if it is acquired or publicly listed, investors will get a share of the profits. This is opposed to typical crowdfunding which only offers rewards or incentives but no stake in the business.
It is the first time a pub is accessing the new equity crowdfunding model, which was legalised late last year.
Sporting Globe’s chief executive James Sinclair said there was a lot of appeal for people to make an investment of between $50 and $10,000 using an equity crowdfunding method.
“The beauty of it is you end up with your core customer base that becomes even more ingrained and loyal to your business because they’ve got a vested interest,” he said.
“We get so many franchise enquiries from our existing customer base but when they find out the investment is going to be $1 million to $2 million, it’s well out of their realm.”
Mr Sinclair added that he wanted to help young venue operators without the financial capital to move a step further towards their goal of running a pub.
“If they’re in their early 30s, it’s probably unlikely that they’ve got access to $1.5 million to $2 million.”
Apart from a stake in the pub, investors could receive benefits such as discounts on products and invitations to shareholder events.
Melbourne-based Birchal, which is running the equity crowdfunding campaign on behalf of Sporting Globe, is one of the first licensed platforms in Australia to provide such an intermediary service between a company and its investors. It operates by taking 6 per cent of the funds raised, plus GST.
Birchal’s founder Alan Crabbe, who also started non-equity crowdfunding platform Pozible, said the recent legalisation of the equity crowdfunding model meant Australia was playing catch-up with the rest of the world.
“Australia is quite behind by a few years in terms of where we’re at with crowdfunding using equity as a model,” Mr Crabbe said.
He pointed to the UK market, where this method of raising capital had surpassed venture capital.
“BrewDog is probably one of the best examples, they’re a chain of pubs across the UK. They were one of the first to access equity crowdfunding in the UK and had about 62,000 members.”
Despite the delay, Mr Crabbe believes the Australian market will welcome this method.
“In my experience, I think Australians will be quick to adopt this as a model. For us, we’re getting people approaching us everyday about accessing this as a way of raising capital,” he said.
It was particularly difficult for consumer companies to secure finance through the bank, Mr Crabbe said, meaning the new method could benefit food and beverage brands, liquor brands, hospitality companies, as well as sports, leisure and fashion brands.
Expressions of interest for the Sporting Globe Plenty Valley closes on Friday, February 16.
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