Erik Meyers from Mystery Brewing has done something few others have managed: he’s successfully used social fundraising tool Kickstarter to fund, in part, his brewery.  But, according to Meyers, it’s not all sunshine and roses — and it may be impossible to replicate what he did.

In a fantastic blog post, Meyers details exactly what has to happen to successfully launch your nanobrewery, complete with a cold dose of realism for those who want to try.  Opening a brewery is expensive, and it’s going to take more than the tens of thousands that realistically may be possible from your friends and family.

He says, in part:

Okay. That’s kind of glib. But consider this: I raised ~$44,000 via Kickstarter, which seems like a lot of money, right? I mean.. it is. It’s like median yearly income for an American family right now or something silly like that.

For a 7bbl brewery that doesn’t even pay for kegs. It certainly doesn’t pay for a brewhouse. It’s 6 fermenters. It’s the cost of plumbing and glycol piping. You get the idea.
Okay, now remember: You owe taxes on that money. You’re a business now and you need to pay taxes on any income that you make. So that $44,000, after the cut that Amazon and Kickstarter take is closer to $40,000, and then closer to $35,000 after you pay even the most modest of income taxes on it. Then you have to pay for those prizes that you’re sending out to people plus postage (postage is expensive – one Priority Mail package to 250 people = $1,000 minimum), so now you’re down to $30,000 or so, maybe lower. That’s more like 4 fermenters.

The point is this: You need, need, NEED alternate sources of funding. Don’t count on the SBA. Regardless of what they tell you they are not interested in funding startups unless there is absolutely no risk involved (ie – you are putting in an enormous amount of capital already), same goes for banks. You need to have a lot of your own money in the bank, ready to go, or a few angel investors willing to put up at least $150,000, probably more. The total cost to starting up a 7bbl brewery, right now, with the prices of stainless and the dearth of decent used equipment, is just north of $500,000.

He goes on to note that there are at least a dozen breweries currently looking for public funding via Kickstarter, where he had the platform all to himself.  So, if you want your nanobrewery, get saving — it’s going to be expensive, and there’s no easy way to raise money on the Internet.