We Just Smashed Our Kickstarter Goal & You Can Too

We have become the first Irish Whiskey Company to successfully hit our Crowdfunding target and have raised 125% of our $40,000 goal. This means a lot more to me than simply money to buy barrels…. It means that our story has enough resonance with people to convince them to part with their hard earned money and hand it over to us in return for rewards, not equity. It also becomes part of our Start-Up Narrative and will be woven into our proposition for future potential institutional investment, government grants applications or discussions with lenders. Creating and running the campaign has been a great experience and I wanted to share how I did it and what I have learned.

 

Be Realistic

Kickstarter goes to great lengths to say that it is not a store. However the fact is that most of the Blockbuster projects tend to be pre-orders for video games, design and tech products. If you have a very cool product which consumers get in return for their donation then sure, aim high these kind of projects very often go into the Millions. On the other hand if, like me, you are pre-product or you are looking to fund your Play or Book or whatever, you need to set a realistic amount. The reality is that the majority successful projects on Kickstarter are funded at $10,000 or less….

We set our goal at $40,000, this is a fraction of what we need to fund our total business but it will fund one key element which is buying our first batch of barrels and getting them to Ireland. You’ll notice that target is set to dollars this is because we aimed our campaign squarely at the U.S. market, which is the world’s largest Whiskey market and will be our core target.  Ireland has not really caught on to crowdfunding yet, so don’t expect wonders from the home market, we had three backers from the homeland. We set the $40,000 target because there was a precedent of successful drinks projects being funded at around this mark. Before you set your goal you need to be really clear on who your potential investor is and  also what is being funded and at what level in your category, which brings me to my next point.

 

Be Prepared & Have A Plan to Drive Momentum

I decided to do a round of Crowdfunding back in March and set the date for launch at the time. We launched in October. I spent those 6 months in between preparing our campaign and creating a good foundation for it. Crowdfunding is not a magical way of raising money, its just like any other method. You have to convince your investors or backers that you are credible and that your product is desirable. You cannot just upload a mediocre video and hope that people will back you. A solid social media following or  presence is absolutely necessary prior to launch, you need to dedicate time to building that.

Your messaging has to be On Point, spend time crafting it. You have three minutes to convince people via a video that they should back you, make it count. Lastly, prepare your network, friends and family.  You need to ensure about 30% of your goal can be covered by your network and that they will share and forward your campaign to their own wider network.

Be Creative With Your Rewards & Invest What You Can In A Video

The usual lore on Kickstarter is that small rewards are the most popular. This was utterly inaccurate in my case, but most likely because I focused on creating value in our rewards. Our most popular reward was for $1500 and was a week at our house in West Clare. My husband and I worked our backsides to pay for that house and I decided to put it to work as an asset to fund the business. It is great value as a reward comprising of a stay for 8 people for a week on the Wild Atlantic Way.

I cannot stress enough how important the video is. You need to apply the same principals to it as you would to an investor presentation. It needs to clearly tell your story, be well presented and professional. Have some fun with it, but don’t get carried away. You have to come across as credible. This is the one area you really need to invest what you can in either in time or money. Talk to local film schools or students, its amazing what can be filmed and edited on an Iphone.

Be Willing To Bust Your Butt During the Campaign

Once you do launch you have to maintain momentum. All going well, your network will  get your to the 30% mark about a week into the campaign and that’s when things slow down and in many cases die off. Here is where your brilliant plan comes into play.

• Consider investing a little money into Twitter or Facebook advertising. I spent $180 all in and raised $4439 as a result that’s a pretty impressive ROI.

• Now is the time to reach out to media if you are on your way to success 80% of projects who hit the 20% goal make it…let the media in your category know.

• You need to hit the phone and the email without being spammy. An individual note to people asking to back you is far better than a mass email, swallow your pride and pick up the phone or send that note. It can be cringy asking people for money but as an entrepreneur that is 90% of your job in the beginning.
• Hit up your Facebook messenger or old work colleagues.
• Monitoring the campaign is a must, you’ll need a Google Analytics tag and you need to pay attention to the Kickstarter dashboard it has essential information about where your traffic is coming from, this will allow you to target the right outlets.
• Be prepared as well to tweak the campaign, offer new rewards, change your visuals.
• You need to be ON IT when it comes to responding to backers questions and queries. Expect to spent 6-8 hours a day running and maintaining the campaign properly.

I really enjoyed this entire process, our campaign closes tomorrow and will end our first big push as a Start-Up. I just placed the order on our barrels and we are on our way.

Now I just need to start preparing for our first Larger Round of funding next year…….

The Great Whiskey Startup Gamble & Why Irish Banks Won’t Take the Bet

Funding any start-up is always a struggle. Funding a whiskey start-up  has its own special roadblocks namely the length of time it takes to generate cash flow. As an SME imagine going into a bank and asking for loan of a minimum of €1000000 to cover your CAPEX, infrastructure and running costs for 3-4 years and believe me that would be cutting it very, very fine.  Then imagine saying to the  bank manager that  you won’t be generating any meaningful cashflow for at least four years, all going perfectly to plan. Therefore they will have to suspend all repayments for about 4 years, whilst you spend the entire loan. There is not a single bank on the Island of Ireland who can fathom this kind of loan, or even begin to try to try to understand it. The loan would need to be structured this way because legally Irish Whiskey has to mature for a minimum of 3 years, so all your saleable inventory is tied up until the whiskey has aged. Even then, the older your whiskey  the more value it has, so ideally you’d wait a minimum of 5 years before you start selling any whiskey at all. Some people in the early years go into Gin or non aged whiskey like products to make ends meet, but that means additional CAPEX and running costs.

Now, if I was setting up my whiskey company in Scotland, this would not be a problem. The banks there understand the appreciable value of the whiskey assets ageing away. Also, because the scotch industry is so well established and the Scottish Government understands it very well and backs it, the banks are willing to take a punt like any other investor would as long as you can prove your concept and prove yourself.

Access to capital from a bank in Ireland is totally closed off to me right now and will be for several years unless a change is forced in. This means to get going I have to rely on my own money , external private investment and some basic governmental grants if I can get them…In order to garner finance from two of these sources I need to prove that my ‘Concept’ will fly with consumers and I have to prove that I’m capable of bringing it to fruition. I also have to find investors who will wait up to a decade for a true return on their investment. Believe me, you don’t meet those kinds of investors every day.

Fortunately I have found 2 Angels, who so far have provided seed funding so that we can map out feasibility & sourcing to get us going. But Angels have wings, and often they fly off to other potential investments, so I launched our crowdfunding campaign to raise additional capital and show that consumers are willing to buy into our concept. We are 70% funded and on track to raise the full amount, this will prove my case to my investors and possibly help in applying for various grants, but for the Irish banks it will be meaningless. Everyone knows the current and potential value of the Irish Whiskey category to our economy it continues to be one of Ireland’s fastest growing sectors. Yet the access to capital and credit for SME newcomers does not reflect the potential gain for the Irish Economy. I’m hoping to create at least 10 jobs in my local area in the next few years, but Ill have to do that without the help of my local bank.