Goes together like peanut butter and jelly, right? Perfect recipe for a Friday night, right? Nicely fits into a diversified portfolio, right? I sure hope so…
As promised, I am venturing out into equity crowdfunding as I attempt to channel my inner Mark Cuban and invite you all to follow my journey. For those of you new to the topic (which was me a few months ago), equity crowdfunding is a newer investment option for those looking to invest in companies, products or ideas at very early stages in their development. Formerly, this option was only available to very wealthy investors or institutions, so I imagine you’ll hear more about this in the upcoming years, especially if there are success stories that come of it.
Of course there will always be non-success (or unsuccessful?) stories, so this is definitely not without risk. As a disclaimer, I am not recommending that you pursue this investment option, but it would be a good idea to at least know about it so you can make your own decisions. Since this is my first time dabbling in equity crowdfunding, I’m going to start small, as you will see later on. If some of these investments end of doing well, I’ll take some of the earnings and go bigger next time around.
To make the investment, I used Wefunder (I have no affiliation with this website). There are others on the market, but I choose this one because I could start investing with just $100 whereas the other sites had a higher minimum investment. It turns out that the minimum investment with Wefunder is actually $107 (sneaky, sneaky) as you are charged a minimum fee of $7 (2% of the total investment, minimum of $7 and maximum of $75).
So what did I just invest in? Well, beer and a movie of course, pay attention!
Craft brewery founded about 10 years ago in San Diego with a wide variety of beers produced and some Gold medals to show for them. Their plan is to raise funds to support growth by creating more tap rooms to expand their reach. The current valuation of the company is $17 million and while their barrel production has been rising over the years, revenue has dipped over the last year. The hope is that with increased funds to invest in the company, the brand can grow to get the revenue back on track.
The minimum investment for Mission Brewery was $200 (+$7 Wefunder fee). This investment gives you shares of the company at $4.32/share. I purchased 46 shares (the minimum investment is rounded to the nearest whole share) which cost $198.72 + $7 = $205.72. This is definitely a long term play, I have no plans on seeing that money coming back anytime soon, but my hope is to have my investment grow over the long run. There is always the possibility of being purchased by a bigger entity, which usually warrants a premium to the current valuation, so we’ll just have to see what the future holds.
I’ll Be Next Door for Christmas
A Christmas comedy from a team with an Oscar and 4 Emmys on its resume which is expected to be completed toward the end of 2018. From what I’ve gathered, the movie is about a 16 year-old girl who is fed up with her family’s usual Christmas shenanigans and when her long distance boyfriend comes to visit, she decides to use the vacant house next door and recruit a fake family which I am sure will not go as planned. Hopefully it’ll give my current favorite Christmas movie, Home Alone, a run for its money (inflation adjusted of course).
The minimum investment for this project was $100 (+$7) which gives you a share of the revenue. The structure is that all of the gross adjusted profits will be given directly back to the investors until 115% of the initial investment is reached. So if the movie does well, I should come out positive $8 ($115 returned from $107 invested). I realize it doesn’t sound like that great of a return with the uncertain risk, but there is more upside built in to the return of investment structure: after 115% of the initial investment has been returned, any further profits are split 50/50 between the production team and investors in perpetuity.
Just sit back and relax, while I sit back and relax. My plan is to update you to big news items from these two entities as this investment matures. I don’t anticipate a lot of news up front, but if the brewery hits it’s target and definitely as the movie nears its release, I’ll hopefully have some updates. And if anyone knows of a pizza investment opportunity, I think that would really tie this investment together.