|Blue Tractor BBQ & Brewery bartender Kyle DeWitt and head brewer Tim Schmidt are seeking investors for their Tecumseh Brewing Co., to open later this year.|
I recently sat down with Blue Tractor BBQ & Brewery bartender Kyle DeWitt who, with head brewer Tim Schmidt, is working on a plan to open a new brewery in downtown Tecumseh, where both have roots. The brewery will be the only one in the town of about 8,500, which is 25 miles southwest of Ann Arbor in Lenawee County. We talked brewery crowdfunding, beer, and more.
You've said the Tecumseh Brewing Co. is the first startup to take advantage of a recent change in Michigan law that allows for "crowdfunding," aka community investment, something that only four or five states currently allow. How is your crowdfunding platform, Localstake.com, different from, say, Kickstarter.com?
Localstake is more like an E-Trade or Scottrade, but instead of stocks it's for local investing. And we are talking investment, not donations, so it's immediately different from Kickstarter that way. Instead of getting a hat or a shirt for your donation, you get a return on your investment. There are different ways to structure that, but the way we've set it up is we're doing revenue sharing. So 7% of our sales every month will get distributed to all the investors who signed up through Localstake until each one of them makes one-and-a-half times their investment. So if we crush it, in two years they'll be paid back; if it's more conservative like we're estimating, it may be more like five years.
Included in each investment is a Mug Club membership, because we're obviously targeting more toward people in the local area, but crowdfunding is open to anyone in the state. We've had six investors so far [editor's note: as of April 4], and five of them are people we don't even know. So we believe this thing can work, but it's so new a lot of people don't quite understand it yet. The biggest thing we want to emphasize is it's not a donation. You're investing in a brewery and you'll make your money back and then some, really fast.