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Case study: Reefton Distilling Co.

Crafters of Untamed Spirits

Capital raise summary

$1.37m

Raised through Snowball Effect

5

Investments over $100k

$220k

Largest Single Investment

25%

Reefton-based Investors

Background

In February of 2018, Snowball Effect launched a private retail offer for craft spirits upstart Reefton Distilling Co.

The offer utilised Snowball Effect's Equity Crowdfunding License to allow many locals of Reefton and a selection of Snowball Effect's members to invest in a business that is aiming to be a leading producer of premium spirits in Oceania and to produce the best quality distilled spirits in New Zealand.

Snowball Effect's involvement with Reefton Distilling Co. spanned from the first discussions of the offer and maintains an ongoing relationship with the company. Snowball Effect started by preparing a full Information Memorandum and testing the offer with sophisticated investors as well as supporting face to face investor information sessions. As the offer progressed, Snowball Effect launched a private retail offer to bring in over 200 investors, and manages the ongoing relationship with those investors through the share registry, nominee, and shareholder communication services.

About Reefton Distilling Co.

Reefton Distilling Co. came together in 2016 as a team with a passion for creating high quality spirits, the Reefton region, and contributing to the revitalisation of the West Coast.

As a group of people who have known each other as collegues and friends over 10 years, Reefton have set out on a mission to become one of Oceania’s premium spirits producers by making the best quality distilled Spirits in New Zealand, using locally sourced ingredients.

Reefton raised capital in order to construct the distillery, purchase equipment, hire staff, and acquire working capital. Capital was also raised to develop their website further for their eventual ecommerce launch, as well as develop the Reefton brand. Snowball Effect utilised their equity crowdfunding license to allow family, friends, the Reefton Community and selected investors to share in Reeftons success, whilst also bringing in some of Snowball's large investors to complete the round.

Whiskey Bottle

Reefton Distilling Co. requirements

Reefton Distilling Co. initially engaged Snowball Effect to provide strategic advice on preparing their offer materials and to assist in negotiations with large investors.  As the offer progressed, it became clear that there was also demand from smaller investors to participate in the offer as well. Reefton Distilling Co elected to conduct a private retail offer.

Private retail offers combine the privacy and control of a private offer with the legal ability to accept investment from outside investors. Reefton accepted outside investment from a few of Snowball Effect's wholesale investors, who by headcount only made up 5% of the investors, but accounted for 20% of total investment. Some of Snowball Effects most experienced investors saw a great opportunity in Reefton, as they made up 5 of the top 10 biggest investors.

Reefton also elected to make use of Snowball Effect's share registry services, providing a simple and professional way to manage and maintain shareholdings. This saves time and paperwork while also meeting compliance obligations, and presenting a professional image to investors.

  • Offer material preparation

  • Investor communication, sessions, and negotiations

  • Document preparation for strategic investors

  • Registry, nominee, and shareholder communication services

Reefton Store Front

The outcome

The start of 2018 saw Snowball Effect set to work on facilitating the online part of Reefton Distilling Co.’s capital raising offer, which saw a total of $1.37m raised. Investors were able to take advantage of the efficient online process, allowing Reefton to bring in smaller investors alongside the larger strategic investors.

The support from the local community in Reefton and the West Coast was undeniable, as around 25% of all investors indicated to us that they were based in Reefton.

The largest investment was $220,000 which adds to our findings in other offers that successful offers need a mix of both large and small investors.

Investments over $100k accounted for 2% of the number of investments by head count, yet they contributed to 45% of the total value of investments in the offer. Investments under $25,000 accounted for 95% of the total number of investments and 43% of the total value of investments.

In the first months after the $1.37m capital raise, Reefton set to work on purchasing distilling equipment, refining gin, whisky, and liqueur recipes, developing new products, and spreading the word about their mission to become Oceania's leading premium spirits producer.

Snowball Effect: Capital raising experts

Snowball Effect offers a wide range of services around capital raising that have helped companies of various different industries, backgrounds, and sizes. If you would like to know how we could help your company grow, please get in contact with our Head of Growth Capital, Bill O’Boyle.

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Bill O'Boyle

Director - Private Capital, Snowball Effect

[email protected]
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