HBT Collaborative Microbrewery

I've been thinking about this lately and I'm not sure if it's plausible or not, but thought I'd throw it out there for discussion. Why don't interested members of this forum get together and start up a microbrewery?! I mean, we've got several members experienced in commercial brewing, we've got lawyers and people with experience getting all the permits, we've got tons of people who are great at designing equipment and hooking up everything, we've got a bunch of people who I'm sure would love to invest in it, and most of all, everyone on here has huge love of beer.

If we could actually make this work, it would be awesome. There is so much diversity and talent in this forum I'm sure we could pull it off. Hell, we've even got people who could build the building, or redesign an existing building, and experienced chefs and restaurant workers to get the kitchen of the attached taproom.

So, what do you guys think?

Probably because nobody is willing to sink their life's savings into starting a business with a bunch of people they only know from the internet

plus, where would it be at?

IrregularPulse said:

Probably because nobody is willing to sink their life's savings into starting a business with a bunch of people they only know from the internet

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No one will have to invest their life's savings. If enough people invest a small amount, I think we could pull it off. We've got enough connections through this forum that I'm sure we could manage to get started for a fraction of the cost of other breweries.

humann_brewing said:

plus, where would it be at?

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I think this would have to be discussed extensively. It would have to take into account the locations of the interested members, state laws and friendliness to starting a brewery, and potential market. I'm sure there are people on this forum who could provide more insight into the last two factors I mentioned.

We've also got great artists for the label and logo! I'm sure at least one of you all is an accountant or someone who could go over the finances. Marketing people surely. Website designers. Analytical chemists (me) . Real estate people. People who can get a jump on used equipment from breweries they're connected with. I really think if we decided to do it, we could make it work quite well.

I'd invest if it was actually Legit.

The biggest problem I see is the "too many cooks in the kitchen" factor. With a lot of small investors and no clear leader, things would not get accomplished effectively and efficiently. IMHO, you'd need 1 or 2 people that own 51% of the business collectively.

I'm not 100% sure on this but I believe there is a limit to the number of private investors a business can have without being publicly traded.

mhermetz said:

I'd invest if it was actually Legit.

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For this to work, it would have to be 100% legit. No one is going to invest if they don't believe in the project and expect to make a profit.

And I think that's the hardest part of this. It has to evolve beyond the wild dreamings of a few people, and solidify into an actualy plan, with skilled and talented people supporting it. That will be the biggest obstacle as I see it. Not only finding the people to work with to put this together, but having everyone believe in the project, and dedicate both time and money to seeing it through. One of my biggest concerns with a project like this would be that there is the possibility of being "too many cooks in the kitchen." There's the possibility hundreds of people could devote time or money to the project, and each one might have their own ideas on what they want the brewery to be. That's why having one solid, central plan, the result of a lot of brainstorming and discussion through these forums, would be of utmost importance.

The idea is far-fetched. Organizing something involving this many people on a project of a scale like this would be a huge undertaking, requiring the combined efforts of the pool of talented people who spend time on this forum. I'm not sure if anything like this has even been done before. But if it happened, how cool would that be.

Bopper said:

The biggest problem I see is the "too many cooks in the kitchen" factor. With a lot of small investors and no clear leader, things would not get accomplished effectively and efficiently. IMHO, you'd need 1 or 2 people that own 51% of the business collectively.

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haha, I was actually writing about this when you posted.

mullenite said:

I'm not 100% sure on this but I believe there is a limit to the number of private investors a business can have without being publicly traded.

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In general, a private business can have no more than 499 investors without listing.

If I get a vote on the location I vote Miami

Bopper said:

In general, a private business can have no more than 500 investors without listing.

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That sounds like way more than I would expect to actually invest from this forum. I have to admit, I'm woefully ignorant of the costs involved in starting a microbrewery. But having the connections we have here, I'm sure we could do it for 50-75% of normal.

I would imagine $1,000,000 would finance a nice-scale brewery with high quality used equipment, a nice space, and a nice, if small attached tap room/restaurant. Is that far off the mark? At that number, if 500 people invested an average of $2000, there would be no need to bother with whatever hassle is involved in listing the business.

Sounds kind of like an open source business. I guess it could work.

KingBrianI said:

That sounds like way more than I would expect to actually invest from this forum. I have to admit, I'm woefully ignorant of the costs involved in starting a microbrewery. But having the connections we have here, I'm sure we could do it for 50-75% of normal.

I would imagine $1,000,000 would finance a nice-scale brewery with high quality used equipment, a nice space, and a nice, if small attached tap room/restaurant. Is that far off the mark? At that number, if 500 people invested an average of $2000, there would be no need to bother with whatever hassle is involved in listing the business.

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With a restaurant and with the brewery large enough to package, think 3-5 million unless you are in the middle of nowhere. Drop the restaurant and then there is no reason not to be in the middle of nowhere and a million for a modest size production facility is not unreasonable.

remilard said:

With a restaurant and with the brewery large enough to package, think 3-5 million unless you are in the middle of nowhere. Drop the restaurant and then there is no reason not to be in the middle of nowhere and a million for a modest size production facility is not unreasonable.

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That's really good insight. 3-5 mil is a bit more daunting, but I guess it could be doable if there is enough interest and excitement about the project. The taproom seems like a good idea, but at the additional cost, and requirement of a good location, make it a hard sell. The idea was that since it would be a brewery completely done by homebrewers, that it would also cater to homebrewers. So people could go to the taproom and sample the beers, and discuss the recipes with the people working there, discuss techniques, yeast, and all that. All while enjoying good food. Oh, and it would have to have at least one hand pump attached to a cask at all times.

I agree with the too many cooks in the kitchen situation. I mean, how long does it take us as a forum to decide one what the 10.10.10 recipe will be? Let alone business plans where we have significant personal money involved.

I agree it is a neat though, but not a realistic one IMO.

yeh and the lower investment per person, the more people, and the less for profits.. which all in all is what each person will want. otherwise they would volunteer.

What you can do is form a corporation and assign % of ownership between multiple people. You can outline each persons responsibilities and % owned.

Doing brewpub is much easier then brewery. I think brewpub is better and easier to implement

It would also be more economical to purchase a brewery that's on its last legs.

i think a good solution would be to have two types of investors.. small investors, who are part of profits, but not part of any decisions, then have 10-15 large investors who will actually handle the business (hopefully finding a variety of talents within the large investors). With several hundred small investors, investing say $2.5K ea. well that's about a million in capitol right there.. Add in the large investors who put in say around $25K-$50k ea.. that's another ~$500K, so together you'd have more than ea. part of course, but not 500 heads banging together when decisions are on the table.

I think you'd find a lot more small investors than large ones though. Soley because of location. Most poeple won't want to commit 25-50k unless they can uproot themselves or they live close already.

In the latest issue of All About Beer magazine, there is an item about Black Star Co-op Pub & Brewery in Austin, Texas. This is a co-op with 1,200 members in 20 states and three foreign countries. This really inspired me to seriously consider getting something going with family and friends.

I agree, but I might interested to a degree....I'm planning a brew pub right now, it's my dream retirement job...the other day the SWMBO said why wait if it's what you want to do, do it....So I'm working it out now. Only issue I have is waiting for my state to pass a few bills which will make things easier for me.

ahh it's my dream job too... I just have no idea how to run a bar / resteraunt.

getting a brewery off the ground and turning a profit is going to be pretty challenging. I don't think I would bet (I use that term instead of "invest") any money in something like that at this point in my life.

But, if a group of you decides to go for it, I'd gladly purchase your products to help support you.

This could easily run afoul of the blue sky laws. If this ever gets legs make sure you talk to a securities lawyer. As a general rule you have to comply under the statutes if you take other people’s money and they do not have "actual" managerial authority in the running of the business.

A few thoughts:

• Florida wouldn't be a good place to brew. You want somewhere much drier, though the temperatures would be good there.
• If you were to actually make a profit, you would need a flagship beer that everybody likes. This is probably not the one any of the investors will like the best, so get a bunch of random people to try beers.
• Don't market the beer as "homebrew". No one will buy it for fear of dog hair ending up in their beer.
• With the above in mind, come up with what would differentiate your business from other breweries.
• It would be cool if you sold online as not many breweries do...although only certain states allow it, etc. This would also allow for your main starting clientele (us) to get your beer.

You mentioned you needed a marketer...so here's one's opinions.

It sounds like a cool idea, but I will have to point out distance and location as the main limiting factor, just like others have said. Now if beer weighed less and was easy to ship...a whole nother story.

I still think you would have a pissing contest about procedure, recipe and naming the brew.

mhermetz said:

ahh it's my dream job too... I just have no idea how to run a bar / resteraunt.

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I been involved one way or another in the resturant business....I got a ton of help on that side....I just started thinking what would I like to spend the rest of my life doing and owning a pub was my choice and then a brew pub just cherry on top....So I was talking about what I would do with my wife and she said why not just do it....

I didn't have an answer except for money reasons...which really just an excuse.....So I'm gonna give it a serious shot.

:rockin:

The only way this is ever more than a pipe dream is to do a few things:

1) Consult with a lawyer, either one from here, or on your own (yes, you'll probably have to fork that consulting fee up front)

2) If the lawyer indicates a full-go, then you would need to work with him to do all the paperwork to create a company.

3) You would then likely need to pretty much have a business plan put to paper, at least a basic one, and then start looking for investors.

If you do the work to seriously get 1-3 going, you've turned this from an idea into a prospect. Sure, you may end up folding the company in 6 weeks when the idea doesn't pan out, but it will NEVER pan out, if you don't get it started.

Someone has to take the bull by the horns and just DO IT, and then work on how to make it work for everyone else. But if everyone sits around discussing it, then nothing will ever get done and it will be a permanent pipe dream. At least if you have those things started, other people will see that you are TRULY serious about this and want to make it happen.

I think that brings us to the main issue here...

If a person on here was serious enough to take the bull by the horns.... He probably already did it.... or will be doing it without help from investors.

As a law student and a licensed principal at a brokerage firm I can shed a little light on some of these issues:

As far as the business organization, you can (and would want to) incorporate. You could have more than 500 investors by issuing stock, or by incorporating groups of investors together and letting their corporations by primary investors. Either way, honestly, too many investors will drive up costs with paperwork to maintain the corporation. It would be better to have fewer investors (like 25, maybe 50 tops) who could invest serious cash. You could do crazy stuff like incorporate, issue stock and let people place it in their IRAs to use retirement assets for capital and keep profits tax deferred. Personally, I don't recommend that route, but reasonable minds differ.

They would want to nominate managers to perform certain functions (bookeeping, purchasing, legal, advertising, etc.) and leave very little to group decisions (like what beers to produce) and likely make it a quorum vote rather than complete consensus. I love democracy as much as the next, but if you leave all decisions to everybody, nothing would get done.

The brewing operations would have to have a central, agreed to, location. You can't have 50 people brewing in their garage and try to sell it through a single entity. You would probably want to locate it where the most owners live and/or where the administrative requirements are the most lax.


All in all, I think you would have a handful of people getting to brew and most people doing administrative/management work, unless everybody lived so close together they could put the brewery where everybody could drive there and work on the brew process each day. Even then, there's only room for so many people...

So, I think it would be a great idea with a local group of homebrewers with capital, but to try to do across the internet with a large number of people, not so much.

mhermetz said:

I think that brings us to the main issue here...

If a person on here was serious enough to take the bull by the horns.... He probably already did it.... or will be doing it without help from investors.

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There are people on here who are building/operate breweries/brewpubs. The idea here was to form sort of a collective brewery.

Hey, It sounds like a great idea not sure how it would work but if someone wants to make this happen go for it. I'm taking my dream by the horns of having a brew pub & I'll be happy to help in this as much as I can. At very least I'll sell the HBT Brewery beers in my pub............

There is only do or do not........