With crowdfunded investors, Hops & Grain to open San Marcos brewery

12:00 a.m. Wednesday, June 15, 2016 Austin360

In just four days, Hops & Grain raised a quarter of a million dollars to open a new facility in San Marcos — a second location that will allow the East Austin brewery to double the amount of beer produced each year.

But the money hasn’t come from big venture capitalist firms eager to cash in on the booming craft beer movement. Instead, Hops & Grain’s founder, Josh Hare, has taken advantage of a new federal law allowing ordinary people to invest in crowdfunded companies. Previously, only those with a net worth of $1 million or an annual income of $200,000 could make such an investment.

“It enables anyone to invest, so it’s a really neat opportunity not only for companies trying to grow, but also for just general, everyday people wanting to invest in something other than the stock market or their 401(k). They can invest in something a little more tangible,” Hare said.

His campaign, done through a site called wefunder.com, is completely regulated by the federal government, with Wefunder acting as the broker between the investors and the brewery and the voice box through which the brewery can speak. Hops & Grain has to be careful about what it posts on social media, for example, about the crowdfunding.

Nonetheless, “it’s opened us up to a whole new form of transparency,” Hare said, noting he’s had to sign many legal documents and give financial projections “for a building that isn’t opened yet but mirrors what we’ve already done.”

The Hops & Grain crowdfunding campaign went live late on June 8, and by Friday morning the brewery had already met an initial financial goal that Hare had expected would take a week to achieve. He’s hoping Hops & Grain can raise $1 million by November — and at the rate the Wefunder campaign is pulling in investors, that time frame will probably be greatly shortened.

But make no mistake: Hare still has a deep love for East Austin and the original facility at 507 Calles Street, where the brewery got its start in 2011. At the same time, he recognizes that location is at full capacity, with beers like The One They Call Zoe, a pale lager, and A Pale Mosaic, an American-style IPA, in high demand. These two beers make up 85 percent of Hops & Grain’s sales, and while both are beloved to the brewers, they’re ready to expand the boozy offerings.

In the college town of San Marcos, the new brewery and taproom powered 100 percent by wind energy will double the brewery’s total capacity with a 20,000 barrel brew house and bring back some of the beers that its current facility doesn’t have the ability to make, like Hops & Grain’s first release, Pale Dog. Plus, the San Marcos facility — which doesn’t have a location locked down yet — will have a program devoted to lagers.

“We can sell those at all our distribution footprints,” Hare said. “But we’ll also have specific beers at the Austin tasting room and others only in the San Marcos tasting room.”

The far east location, Hare said, “will house 100 percent of our sour and wild beer program, the Volumes of Funk Series. It’ll open up a lot of space for us at the Calles Street brewery. It’s going to be a barrel-aging facility, with all beer made here and then inoculated and barreled there. I’m excited about being able to expand the program and get more bottles onto the market, as well as showcasing a side of Hops & Grain that most people don’t get to experience.”

San Marcos is also going to be the site of something special for Hops & Grain fans: a place where the investors can go and see their investment in action. They’ve contributed $100 to $10,000 each and will receive double that amount in the next five to six years, once beer sales kick in.

For Hare, these investors have made the crowdfunding campaign a humbling experience.

“I wouldn’t expect people to know about Hops & Grain, but they don’t just know it; they want to be part of it,” he said. “I think it’s a testament to our team and to everything we’ve been able to accomplish. People want to be a part of our brewery beyond just their six pack or pint at the bar.”

View full experience