Crowdfunding your Seltzer Startup the Ola-Fashioned Way

Ola Brew, the Hawaiian brewer of hard seltzer, beer, cider, and hard tea, is a pro at crowdfunding. The founders recently announced the company had raised over $1 million in their latest crowdfunding campaign, just launched in September, 2020. The funds will be used to develop new products, expand operations and inject capital into their stateside distribution plans. The company has also announced a new taproom on the Big Island, slated for completion in early 2021.

Ola is days away from the end of the term of their fourth equity crowdfunding campaign, and requires investors contribute a minimum of $225 via the Start Engine platform. Previous campaigns resulted in over 850 investors. They have reached their max goal, and investors may now only join the waitlist. This in spite of the fact that the company has a cash burn rate of about $20,000 per month, largely due to COVID-19 impacts on their taproom operations. According to co-founder and CEO, Brett Jacobson, the company has “25% grown then we lost 6 months of taproom sales,” according to an investor reply posted on Start Engine.

Investments resulted in equity in the company, but also carried some perks:

• $250 investment gets you a pint glass as a bonus
• $500 – pint glass and t-shirt
• $1,000 – pint glass, t-shirt, hyrdro flask, and lifetime 10% discount in the taproom
• $2,500 – all of the above plus a 3% bonus in shares
• $5,000 – all of the above plus a 6% bonus in shares
• $10,000 – all of the above plus a 10% bonus in shares

Ola Brew’s existing taproom is a modest building offering a lineup of food and current brews.

Ola structured their crowdfunding so that it offered 4,444 shares of Class A common stock at $2.25/share for an offering maximum of $1,069,875. They do not offer dividends. The holding company is Hawaiian Ola, a significant shareholder in Ola Brew.

Prior to launching Ola Brew, the company produced non-alcoholic products.

Start Engine is the leader in crowdfunding platforms

Launched only in 2016, StartEngine is now the largest of equity crowdfunding platforms, having helped companies raise over $200 million for over 375 companies. It was founded in response to provisions allowed for by the JOBS Act of 2012, which allow for US entrepreneurs to raise capital in their private business through the sale of stock.

Companies wishing to launch a Regulation Crowdfunding campaign, known as a Reg CF, should expect upfront expenses of $4,000-$10,000. Expenses go toward fees, professional services, and creation of necessary legal documents. There’s also a Regulation A+ campaign, which can cost up to $100,000 and take an average of 3 months to get qualified. Ola Brew’s effort is Reg CF.

StartEngine makes its money in commissions on the sale of shares, but also wants a piece of the action. In most cases they charge 7% of the total funds you raise, plus get 2% in equity, and $10,000 in “deferred revenue” collected when the round is complete.

StartEngine currently has about 25 companies in the food & beverage category that are seeking funding in one way or another. Current offerings include hard cider and hard kombucha producers, breweries, taprooms, and even 2XL Swagger Brands’ Aphrodisiac Spirits.

Ola Brew is the only current offering on the StartEngine platform that directly promotes its hard seltzer lineup, and with it expiring, a door could be opening for other startups in the category.