Cleveland Whiskey is seeking crowdfunding. In its disclosures, the company released its 2015 tax returns that showed the rapidly aged whiskey earned more than $1 million in sales last year.
The company says: “We aim to out-compete traditional distilleries, reinvigorate the craft spirit movement, and become the world’s largest producer of ‘just in time’ whiskey. The incumbents are stuck with tradition and have massive supply shortages.”
Founder Tom Lix says the crowdfunding effort allows the company to raise capital in much smaller amounts from individual investors without concerns about accreditation.
“Many of my customers who were previously precluded from investing are now eligible and the idea of Cleveland Whiskey customers and fans being part-owners of the company just makes sense,” Lix says.
Lix purchases whiskey from other distilleries and applies his patented rapid-aging method to new make or relatively young whiskey. This technology has put Cleveland Whiskey in the crosshairs of purists who reject all forms of rapid-aging techniques. When President Obama visited the Cleveland Whiskey facility, several whiskey geeks took to social media to express their discontent.
Nonetheless, the crowd funding campaign has already raised more money than Bourbon Hall of Famer Jim Rutledge’s discontinued campaign. Somebody sees Cleveland Whiskey as a whiskey of the future.
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Desparate attempt to lure uneducated rubes to a venture producing inferior product created with questionable science. This company won’t be around in five years. Then again, gotta hand it to them, why sink your own money into a sinking ship. Crowdfunding=no other reasonable investor would touch the deal.
All observations are my own, not to mention I am hungry, and very cranky this morning.
Coming at this from the point of view of a financial analyst/accountant, I’m really surprised that Cleveland only has about $1 million in revenues. I had thought they were bigger. I also find it interesting that they essentially broke even for fiscal year 2015 (actually a slight loss). This illustrates two points about small distillers/bottlers: Their media visibility is out of all proportion to their market share (at least individually), and it is difficult for them to generate enough capital from operations to grow the business (hence the need for outside investors).
Carlton, what a great point on the media. Is there a comparable industry with media attention vs. revenue?