The Block Distilling Co. Wefunder FAQ - Information on our Capital Raise with Wefunder
The Block Distilling Co. Co-Owner Kraig Weaver recently went Live on Instagram to talk about our Wefunder campaign to raise capital for The Block’s recent expansion.
The recording of this Q&A has been transcribed here for you to get answers to some of your questions, as well as a little background on this capital raise and what’s happening at The Block. You can see the recap and rewatch the Q&A on Instagram right here.
“Everyone has been so supportive of The Block over the past three years we’ve been open, we’re so grateful for all of your support and we are excited to give you the chance to become a true owner of The Block, as well.” - Kraig Weaver
There can be a lot of documents when going through the Wefunder process, and we’re here to help. If you do have any questions, please reach out to us and let us know.
We have set up an email just for Wefunder at investor@theblockdistillingco.com.
+ Why are you raising capital?
The Block has grown so much, it’s time to expand our operations. We need your help to do that. We’ve got the equipment and the space already, we just need your help to get going.
+ Why did you choose Wefunder instead of a more traditional raise method?
We chose to use Wefunder to raise capital this go around because we’ve watched distilleries in other states raise a lot of capital through Wefunder, and they’ve all had very successful raises, which has been awesome to watch.
+ How does Wefunder work?
Everyone that invests via Wefunder gets grouped into one collective investor. This collective amount then goes to The Block. In the event that we did do a dividend, it would go back into that one collective and then get dispersed to each individual investor.
+ How is The Block doing?
We grew 30% Year 1 to Year 2, and 18% from Year 2 to Year 3 (even during the pandemic!).
+ What’s in it for me?
As the company grows, your interest in the block will become worth more money as the distillery is worth more money. On top of that interest, we’re also offering profit sharing. You will actually get a share of the profits as well. As we grow to the point of profitability, you will see returns on your investment in the low-to-mid teens percentage-wise.
+ If I invest a little now, can I invest more later?
Yes, if you’d like to invest a small amount now, you’ll be able to invest more later as long as the campaign is still open. There are a few caveats to this depending on the size of your investment, so please check with us before investing more than $5,000. You can email us at investor@theblockdistillingco.com.
+ What is your minimum investment amount?
$500 is your base investment amount.
+ What’s with the perks?
Using Wefunder for this capital raise allows us to offer perks. Now, the investment in The Block that will offer dividends in the future is the real perk, right? The perks inside Wefunder are more of a “Thank You” from us and vary depending on the amount you invest.
+ What are the requirements from the distillery?
Wefunder is going to show you all of our financials from 2019. There’s a ton of projections and much more on our Wefunder page, which you can see here.
After you invest, you’ll see an annual K1, our yearly review, and yearly P&L sheets reported as soon as we have them. All of this will live in a place where investors can access it easily moving forward. Essentially, we’ll keep you in the loop every step of the way.
+ Will you be using this capital raise to increase wholesale sales?
Absolutely. One of the biggest reasons for the expansion is to increase the distribution of spirits around the distillery and in Colorado. Right now, we’re in very few accounts because most of what we make is consumed in the Tasting Room itself. In Colorado we can actually self-distribute which gives us the chance to form personal relationships with our accounts, which is important to us. So, part of this raise will be used not only for expanding production, but expanding our sales team to help increase those wholesale accounts.
+ How much do you need to raise?
Essentially we have a few goals. Our first goal is $250,000; this goal is to get everything kicked off and started. To finish construction and get production going, we need $650,000. The hope is that we’ll max out the round at $1,070,000 with the goal being to add some more cash flow for working capital as we get everything going. As we start increasing production, we’ll need cash flow for ingredients, glass, and bottle tops to get everything moving.
+ Are there any perks for investing more than $5,000?
If you’re thinking about investing $5,000 or more, please chat with us first and let us know. We’ll try to help out and talk to Wefunder about that investment coming in. There can be a little added benefit for larger investors through Wefunder and we want to make sure you get that added benefit.
+ Where is the construction happening?
The construction is happening at our original location here in the RiNo Art District of Denver, CO. The original location was about 2,7000 square feet, with 1,000 of that being the Tasting Room. The space directly South of that space is owned by the same landlord and we negotiated that space into our original lease. So once that tenant moved out in 2019, we expanded and added another 22,000 square feet to the distillery. Just within the past few months we expanded directly behind those spaces on the other side of the wall, which was another 44,000 square feet. The construction is happening in the new spaces both to the South of our original building and the space behind both of those areas.
+ Are you available to meet with investors in person?
Yes, we are happy to continue a conversation. Please send an email to investor@theblockdistillingco.com and we can set up a meeting to meet in person or via Zoom to continue the conversation.
+ Are you currently in operation?
We’ve been making spirits for about 3 ½ years now. This expansion is happening while we are currently in production. With this raise we’re adding two more stills, so we’ll have 3 operational stills: Eleanor (Ellie), Lucinda (Lucy), and Walter (Wally). We’re also adding a new mash ton (to cook the grain) and 8 new fermentors.
We’re building an equipment platform right now, which my brother Kameron and I are actually welding up ourselves. We have a lot of experience in furniture design and fabrication so we’re doing a lot of the welding ourselves.
+ Does the expansion of The Block mean more grain/farm land required?
Yes, the expansion does mean we need more farm land from our Missouri farm. We are already working with the farmer, and the land has been set aside. We’re currently working on more planting to slowly increase our production. We’re going from 75 acres to 720 acres on that farm.
In farming terms, 720 acres is not that much, but for us it’s huge. It’ll grow a year’s worth of grain of all the corn, oats, wheat, and rye we need to handle this expansion.
+ How many officers are there at The Block Distilling Co.?
The management team is made up of 3 officers, myself, my brother Kameron Weaver, and my wife Michelle Weaver.
+ Do employees get ownership in The Block?
We do have a certain amount of interest in The Block set aside for employees. Those interests are not the same as the investor’s interest, who get preferred shares. The owner & employee shares are common shares. In the event of payout, the investors will see benefit before the employees or owners.
We held a specific amount of shares to give employees as they get further into becoming an asset to The Block. We wouldn’t exist without them. Currently, we have 3-4 full-time and 6 part-time employees, most are Front of House in the bar. We have 1 Assistant Distiller, and when we expand we’ll be adding more Back of House employees to help with bottling, distilling, and sales.
+ What does Spring & Summer 2021 look like for The Block?
We hope we’ll only be raising capital for 3-4 months. That will allow us to kick construction off in a very big way, and construction will hopefully be completed within 3-4 months, and the new stills would be operational by Q3 of 2021, giving us 6X the production we’re currently at.
+ What’s the plan for the shipping containers?
We have two shipping containers done by RoxBox, who did some modifications to some standard shipping containers to create outdoor seating at The Block. Right now they’re in the street, and we know they’ll be there until the end of October. The hope is that potentially it could be made a permanent street closure, so we have our fingers crossed for that!
+ Can you share any collabs you’re currently working on?
Some of the fun collaborations we’ve already done this far include our current collaboration with Novo Coffee, an incredible local roaster just a block away from the distillery. We currently use their cold brew in our Coffee Liqueur. Actually, as a fun fact, Kraig used to walk 10 extra blocks when he was still in corporate to get their coffee instead of Starbucks way before the distillery was even an idea or concept. We also work alot with Odell Brewing RiNo Brewhouse right across the street. We’ve also worked with Wiley Roots in Greeley, CO.
We have some other big collabs we’re not quite ready to talk about yet, but we’re open to discussing privately with potential investors.
+ Are you doing any tours right now?
We are not offering public tours right now, as we’re still adhering to COVID-19 restrictions, but we are absolutely offering private tours to potential investors if you’d like to stop by and see all the new equipment and progress. Please reach out via investor@theblockdistillingco.com and we’ll get that set up with you.
+ Do you enjoy working with your family?
I don’t think any business with any partners is easy, but being able to go to work with my brother and my wife is amazing. We’ve been through all of it together and we’re each other’s support system but we’re very different. We have very different strengths and personalities which allows us to keep from stepping on each other’s toes, it keeps us efficient, and it gives us the freedom to delegate.
+ Will you be entering any spirits into competition in 2021?
Yes, we will be entering some competitions in 2021. We’ve only done a handful so far. It took us a little while to figure out which ones we really wanted to be in, and the first competition we entered was the San Francisco World Spirits Competition in 2019. We entered the Four Grain Whiskey, the first batch, and received a Silver Medal. The first 4 barrels we ever made went into that batch and to get that award, was incredible.
In San Francisco, there’s no participation trophy. You have to pass through a day of blind tasting before you even get moved on to the next round which involves branding, price point and more.
This year we’ll be entering our Straight Bourbon and our Summer Gin.
We’ll be entering a few more competitions that have those reputable backgrounds and a true, unbiased analysis of the spirit.
If you have any questions about The Block Distilling Co., our expansion, or investing, please reach out by emailing investor@theblockdistillingco.com or stop by our Tasting Room!
We’ll see you soon.