Crowdfunding: How beer and pubs are getting involved

By Pete Brown

- Last updated on GMT

How to crowdfund for beer
With operators in the world of beer and pubs starting to experiment with crowdfunding on significant levels, Pete Brown looks at the various models in common usage.

It was great to read in last week’s Publican’s Morning Advertiser​ that the Bison Arms, a pub in Brighton, has been saved after raising £100,000 with a crowdfunding initiative.

With it’s can-do, indie aesthetic, the beer world has taken to crowdfunding in a big way.

But while the practice can transform businesses, or even makes those businesses possible in the first place, some are still suspicious about the whole idea and at least some of the people doing it.


I began my own crowdfunding adventure exactly a year ago this week. Unbound, a new publisher that uses crowdfunding to finance the publication and printing costs of books, asked me if I’d like to do a beer book with them. I was already working with a mainstream publisher on a non-beer based book, so I said yes to compare the two.

This is not a veiled plea for donations — over 500 people have pledges and we hit our funding target last October. But a few criticised me for what they saw as vanity publishing, or fleecing the reader. In most ways it’s the very opposite of vanity publishing, where an author pays for their own book to be published because no one else wants to. Vanity publishers are often treated with caution in the industry and regarded as untrustworthy, whereas Unbound has won industry awards for both its books and its business model.

One particularly fierce bit of criticism (anonymous, obviously) was that people don’t get any equity in a book, and receive no share of royalties. This flummoxed me because an author’s
royalties are modest to begin with before you start trying to split them 500 ways.

But then I learned that there were different models of crowdfunding that are legally defined and quite distinct.


Some of the confusion and suspicion of crowdfunding is rooted in people being unaware — as both my nameless critic and I were — of what these different models entail. And with more pubs and breweries taking to crowdfunding as a financial tool, it might be useful to spell out these differences.

There are five different types of crowdfunding model:

  • Donation — you make a simple donation because you like the sound of the project. Essentially charitable giving on a broader scale.
  • Reward — Unbound is rewards-based — at the basic subscription levels, you get a special edition of the book with your name printed in the back. Pledge more, and you get tickets to launch parties, private events, or other unique gifts.
  • Equity — you own part of the company. BrewDog made this model famous with its Equity for Punks scheme.
  • Interest — you, the crowd, lend money like a bank would, with the promise of getting it back with interest.
  • Mixed — A mix of the above.

If you’re looking at crowdfunding, it’s vital that — if it’s your scheme — you’re clear what model you’re using so you can set people’s expectations. Conversely, if you’re thinking of investing money, you should ensure you’re very clear on what, if any, return you can expect, and what level of risk is involved.

Unless it’s an equity-based model, you shouldn’t expect equity. If it’s interest-based, you should be aware your money’s at risk, as it would be for any bank or institutional investor.
And if it is an equity-based model, you should think carefully about that the real attraction is.


Fifteen thousand people have invested in Equity for Punks. Some financially savvy observers say that as an investment, it doesn’t stack up. But I fear they’re missing the point. For most of that 15,000, owning a tiny slice of Europe’s fastest-growing food and drink business is not about the future financial return; it’s about being part of a movement, something that exists outside the mainstream financial model, and getting a few rewards along the way. It’s only a poor deal if you’re comparing it to something it is self-consciously and deliberately different from.

It may not be wise to bet your house or your pension on crowdfunding, and it’s likely the odd scammer will create a few tears before we all develop a full understanding of the pros and cons of the different approaches.

But beer and pubs are about the will of the crowd, and now that crowd can have a direct say in who and what gets to be in business, that’s a good thing in my book.

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