New brewery Future Magic launches CSF campaign
New Brisbane brewery Future Magic Brewing Co. has launched its equity crowdfunding campaign today following an expression of interest phase.
Future Magic, which has submitted a development application for an East Brisbane site, is looking for between $200,000 and $800,000 to support the brewery launch on the Birchal platform. Its maximum raise values the business at $3.5 million.
The brewery started with a familiar origin story – two mates and homebrewers coming together to brew beer – but co-founder Sean Astill wanted more commercial experience before setting up.
“I’ve been working in Ballistic Beer Co. – I started out very green as an assistant brewer and worked my way up and ended up really, really loving it there.
“That just cemented for me that that was what I wanted to do. And moving forward with doing my own brewery was a right decision after getting a little bit of training and experience behind me.
“Getting experience was so was so vital for us [because] a lot of people have a dream of opening a brewery. Not a lot of people are able to realise that dream one because it’s very capital intensive, and a lot of people aren’t able to get the chance to get those commercial brewing skills that are really beneficial to running a brewery.”
Co-owner Rhys Pike is founder of the @instabrews Instagram account and has worked at Apple and as a graphic designer for a number of years, bringing creative and branding expertise to the business.
Future Magic crowdfunding
But while a CSF move for such a new brewer is not unprecedented – Spinifex Brewing Co. in WA launched a CSF round last year raising $2 million before having any bricks and mortar presence – it is an unusual move for a brewery which has not yet opened its doors.
Crowdfund campaigns have tended to be the province of established breweries such as Bridge Road Brewers and Black Hops, both of which have undertaken equity crowdfunds this year, or 3 Ravens Brewing and Dainton Beer, which are both currently in their expressions of interest phase after offer launch dates were pushed back.
Also unusual is the percentage of the business is selling via the campaign. A maximum investment would see 23 per cent of the business in the hands of CSF investors, when others have tended to offer between 2 and 14 per cent, although the minimum subscription would see 7 per cent of the business divested.
“[The amount being divested is] a good balance between [us] still retaining enough of the company so that [we] have reasonable control and incentive to do the right thing, but also making sure that the investors have enough of the company to make sure that our decisions are also having to be the best for the investments,” explained Astill.
“Pretty much every brewery that I can think of puts community values as one of their as one of their key points.
“We want to stand behind that as one of the core values that isn’t just something that we put on the website…it’s something we actually live by. And we thought from the very beginning, what better way to do that than to do a CSF raise from the start and actually give part of yourself to the community,” Astill explained.
Astill also highlighted the need for regulatory and business transparency, naming Black Hops as exemplary in their investor communications.
“It adds a lot of a lot of transparency to the business and I think with the craft beer community, having that transparency and honesty about who you are, what you do, the way you do business – it’s expected.
“Having that accountability to our whole community that actually owns us from the health owned brewery from the very start, I think is a unique enough point.”
Future Magic raised 50 per cent of its minimum in 48 hours, and Astill was even bullish about undertaking a crowdfunding campaign with two other crowdfunding campaigns underway at the same time.
“We don’t have any concerns. We want to see those guys’ campaigns do really well. And hopefully, you know, obviously our own campaign do really well, because one of our reasons for doing this at this time with Birchal was if we were to delay until the end of those campaigns, with the rate that people that breweries are going through CSF campaigns, there would probably be three or four more that we then compete with instead of just two.
“You know, one, we don’t really mind, and two, it’s actually better now than it potentially could be in a little while because the CSF campaigns are so popular for breweries and it’s such a great way to connect with an audience.”
Funding a new brewpub
The offer funds will go towards the building of the new brewpub in East Brisbane. The site, is located on Manilla Street down from Black Hops Brisbane (formerly the site of Semi-Pro before its acquisition by the Gold Coast brand).
With a license secured from the ATO and the development application in with council, Future Magic is hoping to be open by Christmas.
“Luckily, we’re able to for the most part connect into existing existing systems. So we’re not having to do all that much the building, the only thing we’re really doing is building a slab that’s slightly raised to put over equipment on,” Astill explained.
“There’s definitely lots of little challenges here and there. Some days you have a mini existential crisis when some news come through. There’s all sorts that can happen. It’s just how you deal with those things.
“It’s hard to put an exact date on [opening] because…as anyone that has set up a brewery would know that there’s so many curveballs that can come at any given time.”