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Thread: Wisconsin BrewPub Startup/need investors/brewer/etc

  1. #1
    Join Date
    Apr 2011
    Posts
    6

    Wisconsin BrewPub Startup/need investors/brewer/etc

    I have been throwing around the idea of starting a brewpub in the Madison, WI area. This area is prime for craft brews and has a strong "buy local" power.

    Working on a biz plan, financing, location, etc. May start as a straight up craft brew bar but would like to eventually brew onsite/off depending on location/size.

    Are there any interested parties. I would be open to all ideas as this is in its discovery phase and would likely be something started in the next 2-4 years.

    Also, anyone with experience in starting up craft brew pub or brew pub please feel free to give any advice/direction.

    Thanks in advance for your interest and responses.

    Cheers!!!

  2. #2
    Join Date
    Jun 2007
    Location
    Solon, IA
    Posts
    250

    For starters...

    As a starter, I'd say that you might want to investigate other names than Madtown. Aside from the fact that Ale Asylum is right in your backyard, there is a brewery within 250 miles of Madison that goes by the name of Madhouse.

    Otherwise, best of luck on starting a brewery in Madison. I've always said that I'd leave wherever I was working with an overnight back and a cell phone to brew in Madison. Wisconsin is an awesome place with a cool beer culture.

    If you need any help with anything, feel free to shoot me a PM, and I'll share some of the screw-ups I've made along the way.

    Cheers,
    Bill

  3. #3
    Join Date
    Feb 2011
    Location
    Indianapolis, IN
    Posts
    23
    You may want to be careful about soliciting investors online (Unless you want to go through the tens of thousands of dollars of registering with the SEC for a public offering).

    During research for our fundraising phase we did see a lot of people soliciting on probrewer, their own website, etc without any apparent problems, but it just takes one pissed off investor with a lawyer to kill your whole deal if you go about it this way. God knows I had to read plenty of cases in law school of that exact situation.

    Here is a link to some information and the exemption we ended up using. Consulting a lawyer before taking anyone's money would be your best bet. Best of luck!

    http://www.sec.gov/info/smallbus/qasbsec.htm

    Rule 504

    Rule 504 provides an exemption for the offer and sale of up to $1,000,000 of securities in a 12-month period. Your company may use this exemption so long as it is not a blank check company and is not subject to Exchange Act reporting requirements. Like the other Regulation D exemptions, in general you may not use public solicitation or advertising to market the securities and purchasers receive "restricted" securities, meaning that they may not sell the securities without registration or an applicable exemption. However, you can use this exemption for a public offering of your securities and investors will receive freely tradable securities under the following circumstances:

    You register the offering exclusively in one or more states that require a publicly filed registration statement and delivery of a substantive disclosure document to investors;
    You register and sell in a state that requires registration and disclosure delivery and also sell in a state without those requirements, so long as you deliver the disclosure documents mandated by the state in which you registered to all purchasers; or,
    You sell exclusively according to state law exemptions that permit general solicitation and advertising, so long as you sell only to "accredited investors," a term we describe in more detail below in connection with Rule 505 and Rule 506 offerings.

    Even if you make a private sale where there are no specific disclosure delivery requirements, you should take care to provide sufficient information to investors to avoid violating the antifraud provisions of the securities laws. This means that any information you provide to investors must be free from false or misleading statements. Similarly, you should not exclude any information if the omission makes what you do provide investors false or misleading.

    ****Dislclaimer- This should in no way be construed as legal advise. You should consult with your own lawyer etc***
    Last edited by Black Acre; 05-12-2011 at 09:14 AM.

  4. #4
    Join Date
    Feb 2010
    Posts
    9
    Please send us a copy of the prospectus or any other materials which reflect the investment you are looking for, and how funds received are to be used by your organization... Send it to me personally at mauldin4ga@aol.com
    thanks!

  5. #5
    Join Date
    May 2009
    Location
    Charlotte
    Posts
    30

    Sec?

    Dear BlackAcre. I didn't see any offer of securities or a prospectus. He didn't even use the term "investor." I understand and appreciate your concern and advice as I myself may post an ad looking for a partner. His ad was about as benign as it could be, I thought. Is it illegal to search for partners if you are not offering stock?

    Thanks...

  6. #6
    Join Date
    Feb 2011
    Location
    Indianapolis, IN
    Posts
    23
    I don't want to hijack madtown's thread and I don't hold myself as an expert in corporate law by any means, but my personal understanding is that even soliciting parties to contact you about the mere potential of investing runs into SEC violations (Madtown did use the term investor in the title, but I don't think that matters either way).

    I pulled this off a business law firm's site because they can probably put in more succinctly than I could.
    Funding Law - Don’t Post Your Private Offering On The Internet – PLEASE!

    All securities offerings fall into one of three classes:

    1. Registered,
    2. Exempt, or
    3. Illegal.

    Private offerings of securities are just that – “private”. The key for any private offering is that the offerer may only solicit investors through private methods. There are all sorts of rules around what constitutes private solicitations and to whom the solicitations can be made, but in general "private" means that which is not public. If a business attempting a private offering makes a public solicitation (not sale; merely solicitation) for the sale of its securities, it blows its exemption and falls into a world of mess with the SEC and state securities authorities.

    I’ve see business owners blow their private offering in all sorts of ways – through presentations at open forum groups, through postings in church bulletins or newspapers, and maybe most common, by making general solicitations on company websites.

    Usually it looks like this – you see an investor relations page on the company site. On the page there is a solicitation - something like: “If you are interested in an investment in our company, please contact us.” That is a general solicitation.

    Key is to be careful. Know the general rules for private vs. public offerings. Blowing a private offering exemption can give rise to investors’ rights to rescission, fines, potential legal claims against you and your company, and sit-out periods before your company can engage in another private equity round. It is just not worth it.
    If you want to do more research, pm me and I can give you a list of cases that have dealt with this issue, but the easiest solution is just to consult with a lawyer.
    Last edited by Black Acre; 05-12-2011 at 06:43 AM.

  7. #7
    Join Date
    Apr 2011
    Posts
    6

    Thanks for the feed back.

    Sorry if I confused people with investor being mentioned. I didn't intend that to be anything official.

    I'm simply just trying to get some ideas and advice on the steps/process to starting up.

    I also haven't settled on any brand name for the pub yet just tossing around ideas. Ale Asylum is a good one in Madison, there are a bunch in this area...lucky me, unlucky for my liver. LOL!

    Anyways, thanks again and if anyone has additional feedback please fire off!

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