Beyond the obvious questions one asks an up-and-coming distillery, one question we frequently get asked is, “how is Nine Rivers Distillery funded?”. We’re Dramfunded.
It’s one of the things that make our project so unique, and also underpins why we’re confident we’ll be a successful crafter of world class whisky. If you’re not sure what Dramfunded is, then read on.
What is Dramfunded ?
It’s our own word that we use to describe a group of whisky lovers, pooling their hard earned rambos* to fund a project. In our case, it’s Nine Rivers Distillery. A project that was initially funded (at our pre-seed round) by the equivalent of about a years spend on whisky for each of the first founders.
*rambos, a colloquial term we use to refer to our local currency – “RaMBo’s”
What is Crowdfunded?
It’s kinda the same as Dramfunded, except without the requirement of being a whisky lover.
Crowdfunding isn’t a new concept. The Statue of Liberty was crowdfunded in 1885, or at least the pedestal to mount it on was. Since Congress couldn’t agree on the funding, and the New York Governor refused to use city funds, it seemed impossible until Joseph Pulitzer raised the needed funds over a 5 month period, accepting donations from US$0.15 to US$250. 160’000 people pooled just over US$100,000 and saved the statue, creating what we now call crowdfunding.
Since then, rock bands have used crowdfunding to finance tours, groups have raised money to fund legal cases, movies have been crowd funded and, in more recent years, startup businesses using crowd funding have been almost part of pop culture. Maybe you yourself have even used a crowdfunding website for something you liked or believed in.
However, while most crowdfunded projects use a crowdfunding website or portal, we don’t. Hence the title, Dramfunded, not Crowfunded.
Rewards Versus Equity
Most crowdfunding projects for startups will be one of two types – rewards based crowdfunding or equity based crowdfunding.
Rewards based crowd funding is really simple. Someone has a concept for a product, but can’t afford to build it. In this way, the product is essentially pre-sold to interested consumers. The startup will then design, develop, and manufacture this product and eventually ship them out to the eagerly waiting customers.
There have been some amazing success stories. A project to make a funky watch snagged over US $20 million. A cooling box with speakers raked in US $13.2 million. Even a camera tripod hit over US $12 million.
Equity based crowd funding is different in the sense that the end consumer becomes an investor and receives shares in the business (equity) for their money. One of the most famous equity based crowd funding success stories is also in the alcohol industry. Brewdog are now reported to have 200,000 investors, raising over £100 million and now have a business valued at £2 billion. Not bad, Brewdog.
Crowd Funding Platforms
You wont find us on Kickstarter, Indiegogo, GoFundMe or any of the other hundreds of platforms.
There’s a number of reasons why you won’t.
Primarily, it’s because most crowd funding websites (and the processes involved) end up costing a huge chunk of money. The website itself can end up costing anything up to 12% of the capital raised, and most of them add another cost of a few percentage points for processing payments.
If that wasn’t enough, there’s also another stack to be spent on a services agency to help put your story into “Crowdfunding Friendly Format”.
Crowdfunding is a competitive industry and there are literally thousands of projects live at any one time. Without a skilled and experienced professional agency (the types that know the best way to grab attention, tell a story, and get people to hand over their hard earned money) there is very little chance of success.
Agencies don’t just ensure the overall presentation and image is perfect, they also know all the tricks to get your story featured on crowd funding discussion websites, forums, and all the other places to get eyes on your project.
Do the math with us. Those agencies normally want 25% of the gross total raised, plus when you factor in an additional 12% lost to the crowd funding websites and their payment fees, and that’s almost 40% of the money gone, a steep sum.
Imagine paying full price for a bottle of whisky and you were given a 420ml bottle instead of a 700ml.
Exactly. Now you can understand why we went for the dramfunded approach!
Word of Mouth
Everything we have done so far. Everything we have achieved. Everything we have raised. It has all been through word of mouth. The chain is simple: a person gets involved through knowing everyone else at one of the various Whisky Networking events, then tells their friends about being part of a crowd of likeminded whisky lovers who want to do something special in the world of whisky.
That friend learns more, understands what we aim to achieve, wants to be a part of it, and then tells one or more of their friends. This continues and cascades and we grow. We raise more money at each stage of investment, sure, but more importantly, we have more people to talk about our ambitions to their network.
It’s not just about raising money. It’s also about building the brand awareness and communicating our message to all of our potential future customers. As well as the fact that everyone has a talent, a skill, or a passion, all of which we can utilise within our project.
Dramfunded = More People + More Efficiency
Not being a multibillion dollar alcohol conglomerate, we can’t throw ¥1 billion at a project with two stills – or even just CLAIM to be doing that in some kind of shareholder appeasing spin doctoring.
What we ARE doing is building something with more than 7 times the production capacity of THAT project, for a fraction of the price. We spend less because everyone rolls up their sleeves and mucks in.
Dramfunded isn’t just about the money raised. Everyone has something more to give. With over 200 people involved, just an hour a week from each person gives us 200 hours a week. Many of them contribute considerably more than just an hour. But even on the minimum, that’s 200 hours a week of diverse skills, extensive experience, natural talent and real world business experience – considerably more use to us than a bunch of big bucks consultants flown in from abroad, armed with nothing more than an MBA, a shiny pair of shoes, and a Mandarin travel phrase book.
How many startups in any industry (let alone a distillery) can claim to have their own architects, structural engineers, construction experts, scientists, mechanical engineers, software developers, graphic designers, packaging experts, marketers, linguists, chemists, logistics experts, distributors, a minivan’s worth of international C-level executives, and a coach load of successful entrepreneurs, some of whom have listed multimillion dollar companies on stock exchanges?
Our group of passionate people are all united under a single vision to create world class whisky.
Next Week
We’ll continue our story how we’re funding Nine Rivers Distillery. More reasons why we chose this approach. How it benefits our project and, the big ones – why haven’t we taken in any big corporate money (despite a number of offers……).
Would You Like To Read More?
If you enjoyed reading about how we are dramfunded, and you would like to catch up with some of our past articles, then please CLICK HERE and go to our News Section, where most of our other content is published.
Would You like To Know More About Helping Nine Rivers Distillery?
One of the easiest ways to help our project succeed is to take an interest in anything we have for sale. You can find out what we have if you CLICK HERE and go to our shop. We’ll make a few percentage points (after sales tax) and this goes directly to our project.
You could help us by simply buying your very own Brick for Life – a brick with a steel name plate wrapped around it, which will be cemented into The Plenum (our feature wall) in July 2023. Every brick owner is entitled to a free dram for life every time they visit us in Longyan, Fujian.
Or, you could learn more about being involved and help us grow to our target of 500 stakeholders. You can read more about how we are Dramfunded if you CLICK HERE.
Follow Us
Last, but as important as all the other points above, you can help us by reading, liking and sharing our content across some of the more popular platforms.
LinkedIn users you can CLICK HERE to follow us.
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