Sure we’ve all thought about it. Being able to take your friends into one of the world’s best bars and being able to say “And by the way, I own this.”
For most of us though, owning a cocktail bar outright is probably just a pipe dream, but it seems that owning a stake in one is becoming more and more of a reality.
Equity crowdfunding is opening the door for small investors to take a share in bars, distilleries, breweries and wineries that are looking to expand.
And right now, the famed New York East Village bar, Death & Co are looking for investors, just like you (and depending on where you live, they are generally happy to take overseas investment).
Death & Co is one of the most influential bars to have come out of the cocktail revival. Over the last 12 years, Death & Co have created a reputation for exceptional guest experiences, anchored by a passion for hospitality and driven by a deep knowledge of their product.
So What’s The Plan?
The offer means more than just having a stake in Death & Co., investors will actually purchase ownership the umbrella company, Gin & Luck LLC. In addition to the bars, Gin & Luck manages the book deals, intellectual properties, and the hospitality consulting firm Proprietors LLC.
Gin & Luck is aiming to raise $1.5 million, with a minimum stake of $1,000 per investor and they have so far raised US$414,414 .
The money it raises on SeedInvest will go toward new-store growth and new hires. According to its investor decks, Gin & Luck projects $385,000 in annual profits at the East Village bar in 2019 and $697,000 at the Denver location. Five revenue streams, including three bars, consulting fees, and a retail arm, are projected to add up to $1.89 million in total annual profits in 2019, and $2.68 million in 2020 via seven projects.
The company hopes to open multiple additional locations, starting with L.A. in 2019; anticipated future projects include bars in Chicago, Atlanta, and Nashville, as well as new Ramble Hotel partnerships in Kansas City, Indianapolis, and Boston.
What Is Equity Crowdfunding?
Unlike Kickstarter, which offers rewards for your cash, equity crowdfunding literally offers you equity (or ownership shares) of the company in which you are investing.
Investors make their money back in a range of ways, including if the company is sold or goes public. Gin & Luck is offering a preferred equity note; it’s essentially a mini-IPO, but the company remains private and the original founders retain control.
David Kaplan, who owns the brand along with Ravi DeRossi and Alex Day, said: “After investigating different fundraising approaches over the past few years, crowdfunding with SeedInvest became the most appealing as we can continue to grow our company in the same manner in which we run our businesses: with full transparency – everything is there online for all to see.”
Is It A Good Investment?
Investing in anything comes with risk. The decision comes down to a mix of your financial circumstances and whether you think the company’s track record and plans are worth the investment.
So let’s take a little look at the figures
- At present, Death & Co is valued at $13 million. The company’s East Village bar, recorded $1.8 million in net revenue in 2017, up 71 percent from 2008. The newest Death & Co. location, at the Ramble Hotel in Denver, notched $313,000 in revenue in its first month of operation. A third location, a standalone Death & Co. bar in Los Angeles, is slated to open next year.
- Gin & Luck has sold more than 120,000 copies of its book Death & Co: Modern Classic Cocktails, which added up to more than $379,000 in royalties.
- Consulting firm Proprietors billed $539,000 in revenue in 2017, with clients such as Hilton, Pernod Ricard, and Bacardi USA.
PIN ITDavid Kaplan and Alex Day, who founded Death & Co, (Ravi DeRossi not pictured)
Final Thoughts
Investing in equity crowdfunding is all about community. As Day went on to said: “We want to offer this opportunity to guests and fans of the brand. Our story won’t be told by a large private equity firm. It will continue to be led by us with the help of anyone who believes in the future we’re looking to build.”
But also keep in mind a comment recently made to Bloomberg by Jim Meehan, the cofounder of another legendary NYC bar PDT
“The best part about a crowdfunded project is that you have people who have a vested interest in the success of the company,” he said. “The worst is when you have people you don’t know walking into the bar saying they know the owner or that they own the place. Will they see themselves as owners in a respectful way? Or does it give them a sense of entitlement?”
So if investing in booze seems a good idea to you, realise you’ll be one of hundreds of investors and don’t be the guy that Meehan thinks you are. To get more information on the offer go to SeedInvest and do your homework.
