DeliveryRank is a publishing group of expert meal delivery researchers and reviewers located all around the world. They have a shared mission to give our readers accurate and reliable insight so they can make informed decisions about meal delivery, wine delivery, and pet food delivery services. They are a team of writers, reviewers, and editors […]
Read MoreDeliveryRank is a publishing group of expert meal delivery researchers and reviewers located all around the world. They have a shared mission to give our readers accurate and reliable insight so they can make informed decisions about meal delivery, wine delivery, and pet food delivery services.
They are a team of writers, reviewers, and editors from around the world. Whether you want to learn more about meal kits, prepared meals, wine subscriptions, or pet food delivery, their diverse team works to provide honest opinions and accurate information for every service they review.
They have a blog on their website which (while mostly underpinning the themes of their website) occasionally features some different content, which today was Nine Rivers Distillery.
If you’d like to read the article, then CLICK HERE.
Da Chi, Longyan, Fujian Province, China, Friday 15th November 2024. Nine Rivers Distillery Secures Unprecedented Financing Nine Rivers Distillery (9RD), an ambitious newcomer to the Chinese single malt whisky distillery scene, has achieved a monumental milestone by securing a multi-million financing deal, secured against its future maturing whisky stocks. It is worth noting that 9RD […]
Read MoreDa Chi, Longyan, Fujian Province, China, Friday 15th November 2024.
Nine Rivers Distillery (9RD), an ambitious newcomer to the Chinese single malt whisky distillery scene, has achieved a monumental milestone by securing a multi-million financing deal, secured against its future maturing whisky stocks. It is worth noting that 9RD has achieved this whilst its facilities are still under construction and with 9RD recently starting the process to install their stills, and with no onsite distilled product in barrels, this is a real show of confidence in the project and its potential..
Most new distilleries face an array of seemingly insurmountable challenges, some of which are the most difficult to overcome early such as building brand recognition and credibility. On both of these fronts, 9RD has risen to meet these challenges, as evidenced by their growing following on LinkedIn and other social media platforms, the industry buzz surrounding 9RD and its obvious potential to disrupt the single malt whisky industry. Inclusion of industry veterans on their board, such as Macallan’s former Master of Wood, Stuart MacPherson, also aids in establishing credibility in the industry. Additionally, the often-impossible task of acquiring land in China to establish the 9RD Chinese single malt whisky distillery, was through hard work and diligent adherence to the process also achieved by the Nine Rivers Management team. It cannot be understated how much of a tricky and often impossible task this is to achieve, despite the increasing thirst for whisky among Chinese consumers and the endless patience and helpfulness of the relevant Government personnel.
The financing deal, led by Carnation Capital, will provide a drawdown finance facility for Nine Rivers Distillery, allowing them to fill thousands of additional casks during the first few years of production.
“Our journey has been full of firsts, but this is an achievement myself and the board are especially proud of,” said Jeff Olyniec, Deputy Chair of Nine Rivers Distillery. “We’re still a construction site, but we’ve secured financing against maturing stocks. If ever there was proof we are going to disrupt the Chinese single malt whisky distillery industry, this is it.”
“As financiers, we need confidence that credit lines will be repaid from future revenues. So, we traveled to China and spent time on-site with the 9RD team to understand how they plan to differentiate themselves and how the quality of their final product will drive strong sales. With the insights we gained, there was sufficient confidence that their goals, while ambitious, were attainable. Underwriting their financial needs was straightforward.”
Board Member Jan Broni highlighted the significance of the deal:
“As part of the 9RD team working with Carnation Capital on this deal, I can’t tell you how thrilled we are to get this done. Securing finance against casks of maturing whisky while we’re still a construction site and haven’t even filled a single cask—that’s practically unheard of!
“To people outside the industry, this might not seem like a big deal. But trust me, in our world, it’s tough enough to secure financing on maturing stock even after many years of solid sales and a shelf full of awards. Getting a professional finance partner on board before we’ve filled our first cask is something special. And the fact that the terms are better than what startups like us usually get makes it even sweeter.”
Jay Robertson, CEO of Nine Rivers Distillery, concluded:
“Securing this deal was a really important milestone for our project as it shows that despite the general global downturn in whisky, there is a lot of confidence in the future of the Chinese whisky market.
“It also demonstrates that our approach to being a difference maker in the Chinese whisky market, and focusing on quality and affordability for whisky lovers, is something that finance partners outside of China believe in.”
With this surprising but well-deserved financing secured, Nine Rivers Distillery is prepared to make a significant impact on the Chinese single malt whisky distillery market. As they move closer to commencing production, whisky enthusiasts worldwide eagerly anticipate 9RD’s disruption of the market. For the latest updates, follow Nine Rivers Distillery on LinkedIn or visit their website.
Nine Rivers Distillery (9RD) is a startup single malt whisky distillery located in Longyan, Fujian Province, China. Collectively funded by more than 300 whisky enthusiasts from around the globe, 9RD’s mission is to Revive the True Essence of Whisky by bringing world-class whisky to the mass market at prices that are affordable to all.
9RD will initially commence operations with a production capacity of 1.31 million LPA (Liters of Pure Alcohol) but has the foundation and infrastructure to rapidly scale up to 7.5 million LPA. The distillery will eventually include its own onsite cooperage capable of producing up to 100,000 oak barrels each year, supplying both 9RD and other single malt whisky distilleries in China. For more information, CLICK HERE.
Carnation Capital is a private investment firm specialized in the wine and spirits sector. Dedicated to identifying emerging and innovative debt and equity investment opportunities, we prudently direct our clients’ investments to maximize returns while empowering the working capital growth of wine and spirits businesses.
Introduction So let’s put our cards on the table right at the beginning. This is intended to grab the attention of whisky lovers all over the world and hopefully encourage them to be a part of our project. It’s a fairly chunky read but our opinion is, if you don’t have the interest to stick […]
Read MoreSo let’s put our cards on the table right at the beginning. This is intended to grab the attention of whisky lovers all over the world and hopefully encourage them to be a part of our project. It’s a fairly chunky read but our opinion is, if you don’t have the interest to stick around and read what we have to say, you were probably never seriously interested anyway. Right?
Primarily it’s about making better whisky and more interesting whisky for whisky lovers and making that whisky more affordable. But within the context of being a business and operating under normal, logical approaches to business. Business, profitability, creating a return on investment for shareholders, and offering world-class products that are great value for consumers really is possible. ROI, quality, and value can all exist in the same place.
As a startup that has been bootstrapped since day one and essentially funded by the drinking money of what is now over 200 people, we’re not about to start taking gambles with laws, rules, and regulations around investment offerings and opportunities. We think we need to be aware of certain things we believe we can say, and probably can’t say.
Ironically there seem to be stacks of people flaunting the rules that we think exist and do regular shoutouts to fundraise publicly, and even right here on LinkedIn. But we’re going to err on the side of caution and simply tell you all about our project and encourage you to get in touch if you’re interested to learn more about what we’re doing and find out ways that you could perhaps get involved.
It’s 2023, and everyone is either too busy with their life or has the attention span of a root vegetable, hence the popularity of those TikTok-type things. So if you want to just jump right in and reach out to us, you can CLICK HERE. But please do us the favor of at least skimming the headings here to make sure your first questions aren’t already covered. Remember, bootstrapped, every penny counts, we don’t have armies of people sitting around waiting for your questions because they are all busy working day and night to make this project the success that we know it can be.
Let’s run with the good old-fashioned (one of our favorite whisky cocktails for the record) who, what, why, where, and when.
Who are we? We’re Nine Rivers Distillery. We’re made up of just over two hundred whisky lovers from (literally) the four corners of the globe.
While that might initially sound like a rag-tag band of misfits (and it kinda is) there is a serious board of directors that lead this project.
Stephen Davies – our Chairperson who has been involved as a mentor since our project was just a monthly debate at whisky nights in Shenzhen.
Jeff Olyniec – the second investor and our deputy Chairperson, who helped shape our idea into something that resembled a real business, starting on the back of napkins in a McDonald’s in the ‘burbs of Shenzhen.
Joy Tan – a passionate whisky lover and a founder investor since the very beginning of the project.
Daniel Liang – a founder of the project and a mentor to many of the people working on the numerous work streams required to deliver our project.
Jan Lægaard Broni – our resident Viking (doesn’t every startup distillery need a Viking?) and another leader and mentor to many of our work streams.
Jay Robertson – our CEO who has moonlighted on our project as an excavator operator, loader operator, truck driver, steel fabricator, welder, plumber, bricklayer, and drone pilot – all within our project.
What are we? We’re a startup whisky distillery that aims to be something of a disruptive force in the crafting of world-class whisky and making it affordable for all. Consider us the caped crusader and the likes of Diageo and Pernod Ricard being Lex Luthor (Diageo) and The Silver Banshee (Pernod Ricard) – the DC Comics Nerds will get the references there.
However, we’re not your typical startup.
While not taking anything away from a typical startup distillery (sincerely, we admire them all because we know what it takes to turn an idea into a distillery – we’re living it) we’re bigger than most. In fact, we’re building towards a 7.5 million LPA (LPA = liters of pure alcohol – essentially 1000ml of 100% alcohol by volume – an industry standard for measuring capacity) distillery. An average startup distillery could be 100,000 to 200,000 LPA and even a big startup would almost never be more than 500,000 LPA.
If you prefer bottle numbers, 7.5 million LPA is likely to be about 17 million bottles (depending on bottling strength that might fluctuate a little) a year, or around 50,000 casks a year.
Why – in the context of why do we exist? Why did we start this project? Well, that’s an easy one to answer. We exist because of two drivers. Firstly, because a bunch of whisky lovers over here in China, got into the habit of debating three things:
We came to the same conclusion pretty much every time. Big corporations pretty much control whisky production all over the world, and being driven by shareholders and the need to shell out dividends, everything is driven by profit.
Why in the context of why did we go so big? Surely by building something that will eventually have 7.5 million LPA of production, then we become the very thing we are trying to beat? Nope. We simply need economies of scale.
There are literally hundreds of startups across the world in the last decade or so. Some of them are creating some really amazing products. Far too many to list. But it really doesn’t matter how amazing a product is, when you’re mashing, fermenting, and distilling at a small scale, your costs of production are so high, that you don’t have enormous amounts of money to spend on marketing and advertising that the big players have.
It’s a never-ending circle that almost always constrains small startups into only ever being small startups – unless of course, they cash in to one of the big multinationals, get a big injection of moola to brand build and save money using the distribution network of the big multinational……and of course then they become part of the monster.
Larger scale production = lower production costs per bottle = we can pass on savings to end consumers with better pricing, and we can make more money to help us brand build. But let’s come back to brand building.
Where are we? We’re in China. To be specific, we’re located in Beixi Village, in Da Chi Town, Longyan City, Fujian Province, China. Probably not somewhere that anyone outside of China would have heard of, but Longyan is a city of 1.4 million people, it has connectivity to the national high-speed road network in all directions. It has a significant high-speed train station with trains to every major city in China multiple times each day. It has a small airport just outside the city with another one being built in the south of the city in 2 years. It’s also about 50 minutes by train to a significant international airport at Xiamen.
At Da Chi, we’re surrounded by mountains up to 1500 meters above sea level, and our site is at 515 meters above sea level. So we have our own special microclimate that can be between 10 and 25 degrees cooler than the downtown city of Longyan (which is about a 40-minute drive from us). It can result in a daytime temperature fluctuation of up to 40 degrees celsius. Even an average swing can be 20 or more degrees. As all whisky lovers know, the change in temperature each day can be very good for maturing whisky.
People typically ask us “do you have enough water to make whisky”, which is when we typically point out the name “Nine Rivers” comes from the fact that the mountains around us have literally Nine Rivers every time it rains, which at this time of the year (August through September) is multiple times each day.
When did we start? The history of this project goes back to 2016 at a network of whisky nights that popped up all over China, starting first in Shenzhen. There was a lot of time invested into researching the possibility of making whisky. Then some of us spent a lot of time developing processes to make better whisky – some of which has resulted in patents being filed and granted. But in terms of real tangible and visible things, we’d probably frame the start (as in forming a company, and the founders chipping in their coins) to 2019.
We first visited Da Chi in February 2020. It took us about a year to find the perfect location and secure the land. We had a “groundbreaking” (a bit early in all fairness, but there’s a mildly amusing story about that) in February 2022 but the really good stuff (the excavation and construction) really started to happen in February 2023. It took from December 2022 through to the end of January 2023 just to level the land parcel.
When are we looking for more people to get involved? Right about now. Now is the perfect time for anyone interested in whisky to get in touch and learn more.
The timing of this is deliberate, and we’re happy to explain why. For one simple reason – credibility.
The 200-odd people that have helped us to get to where we are today are people that are connected to us. Typically they are personal friends, or professional contacts of either one of our board members, or someone else that is involved in this project.
The starting group of founders was made up from whisky lovers who regularly attended one of the whisky nights – in Shenzhen, Dongguan, Guangzhou, Wuhan, Shenyang, Shanghai, Beijing and Xiamen. Everyone that has got involved since are in some way directly connected to one of these founders or one of the board members. That friendship was important for the huge amount of trust it has taken between us all to fund this project and get it to where it is now.
But now we’re at a point where trust is mitigated by the fact we’re no longer just a slide deck and wishful thinking. We’re real.
How are we going to make better whisky, and still make it affordable?
Quality is massively influenced by the quality of raw materials, the production process, and the maturation process. Sure, cuts on distillate could be included in this, and there’s lots of marketing and PR around the mythical “Master Distiller”, but let’s not go down that Rabbit Hole and end up with every single self-appointed Master Distiller having a rant about how we have belittled their skill. Let’s stick with what we can prove.
Using the best grains for purpose (we’ll not use the word quality as that can be argued as a matter of opinion). Let’s simply say that we will be using the grains that we believe carry forward the most flavor and aroma as opposed to the grains that will give the best yield of alcohol per ton of grain – which is how the big corporate producers determine if the grain is good or not. We’ve talked about our approach to grains in some of our previous social media posts. The grains we will use will naturally cost more per bottle produced.
Using yeasts and fermentation timescales that again, focus on developing flavour and aroma as opposed to just converting as much of the grain-derived sugars into alcohol as quickly as possible. Big producers focus on what we refer to as industrial yeast. They need as fast a fermentation as possible. Faster fermentation means more batches of wash per month, feeding more wash stills, and producing more whisky.
We’ll be taking a craft beer approach to our fermentation. Longer, slower, and cooler, to utilize yeasts that are specifically developed to enrich fermentation with much more flavor and aroma that would typically be associated with large-scale alcohol production. Plus, lots of variants as opposed to just cranking out the same old wash, going through the same distillation process, to create the same, bland, mass-market offerings that most large-scale producers have got into the habit of churning out, year on year.
Leading this part of the production process is Neil Playfoot, a brewing consulting with 27 years of experience crafting world-class beers.
Anyone who knows anything about whisky will know that wood (in the form of oak barrels) is responsible for around (let’s not split hairs) 60% of the final aroma and flavour of the bottled product. To state that wood is critical to good whisky is fair to everyone but wood for the sake of clocking up the required years is currently the industry default.
There is an accepted shortage of oak barrels across the world. Reasons why aren’t important but the big producers are struggling to get enough oak barrels for their own production. There are barrel brokers popping up all over the world quicker than anyone can count because where there are shortages, there is money to made by those with little or no ethics.
Smaller producers are mostly being dumped with low-quality and well-used barrels. Of course, many of them have spun this as part of their marketing, proudly labeling their product with subtitles such as “Made with STR Casks” or quoting a plethora of random wines that would never have been considered suitable for whisky just a decade ago. Second and third-fill casks are the new norm for mass-market products and all those gardening enthusiasts are unable to find any wooden barrels to make planters for their garden anymore, because what would normally be up for grabs in their local garden center, is now being repaired and filled with bulk spirit for export markets.
Quality has dropped everywhere. With the two major barrel producers squabbling with each other and shaving dollars and cents off production so that they can supply the massive bourbon producers, by the time those ex-bourbon barrels trickle down into the whisky industry they are already much less of a barrel than they were a decade ago. That’s without us even touching on the whole barrel rinsing that now happens because even bourbon producers are not immune to the demands of shareholders and the need to cut costs and deliver better returns to investors each year.
The only solution to all of these problems that affect quality is to simply make our own barrels in our own cooperage. Sourcing our own green timber, cutting it to rough staves, seasoning it on site and then crafting our own barrels.
None of this is going to be easy. Coopering is an ancient art and training an apprentice to the status of Journeyman Cooper takes years. Having a few power tools in your shed and having done some DIY is far from coopering and although there are some really exciting success stories for boutique cooperages across the world, we decided to bring on board one of the best in the world to lead our cooperage project – Stuart Macpherson, former Master of Wood with Edrington and Macallan with a 43-year pedigree in the industry.
Better grains, longer fermentation, better quality barrels – they all cost money right? So how do we offset these costs, and make amazing whisky while not only being competitive – but being better value?
We have a few tricks up our sleeves which include some really clever tech (that we have patented) around energy recycling throughout the production process. We have some patents around crafting casks too. We’ve got some smart architecture which again massively reduces energy consumption and that makes a huge dent in the overall costs of producing whisky.
But the real big game changer comes from the people involved in our project and what they bring to the table. Literally, everyone who has invested in our project brings something, and absolutely everything helps.
We have a pool of investors that includes architects, structural engineers, mechanical engineers, product designers, graphic designers, copyrighters, marketing gurus, business leaders, experts on literally everything that any startup business needs.
Whether it’s as simple as just sharing content on social media or running workshops on designing our building, layouts and immersive visitors experience when we are producing spirit and have our doors open – this has made a massive impact into our costs and will continue to do so.
Let’s make a quick comparison to help you to understand just one benefit of having all these whisky lovers with a shared passion, involved in our project.
Before we look at how much this project is costing us to build, we need a baseline.
Here’s a press release from November 2021 (click here) where some blobs of concrete, some roofing tiles, and some grass was reported to be a US$150 million investment, which at the time was equivalent to 1 billion rambos (renminbi, or Chinese yuan). Forget all the other waffle in the press release, what matters is it’s a 2 still setup and believed to be about 1 million LPA of production capacity.
Diageo’s project up in Sichuan province on a press release the same month (click here) seems to be half the money (US$75 million, or 500 million rambos) for a 4 still setup and believed to be about 2 million LPA.
We’re going in on 10 stills, 7.5 million LPA and (with all due respect to both architecture firms involved in those other two projects) something that we think looks infinitely better visually. Our total budget to build? Considerably (!) less than both Pernod Ricard’s and Diageo’s for sure – especially since we don’t have all those suits to pay for!
We didn’t have armies of top-tier consultants in expensive suits, and we definitely didn’t have a second (smaller) army of consultants supervising the first army either. We just have a bunch of whisky lovers all chipping in when they can. A few even rocked up on-site and had a blast on the excavators and the loaders with some of them living on-site in dormitories for weeks on end just to be a part of what we’re doing. That has created massive savings for us and it benefits everyone invested in the project.
But it won’t end there.
Everyone invested in our project, from the smallest micro-investors to the ballers with a wheelbarrow full of greenbacks, is an Ambassador for our project. They tell everyone that they know about who we are, our mission, our commitment and our drive. Essentially grass routes brand building and creating brand awareness.
When we’re producing, this Ambassador approach becomes our default marketing. With everyone having a bit of skin in the game, we all benefit from sharing the story of Nine Rivers Distillery and creating an interest in our products. We all benefit from sharing a bottle with friends, which solves the biggest challenge in any business in any industry – getting new customers to take a chance and try your products.
That’s the other major cost-saving for our business. Brand building, marketing and advertising. All huge financial drains on any business in any industry. So to essentially have all this not just in-house, but in-house at almost zero cost, is a really big benefit for us.
We’re looking for people who are interested in being involved in our project as Ambassador Investors – owning a stake in our business as a micro-investor, who want to contribute as little as an hour a week of their time to share our story with their friends in person, and on social media.
We don’t think we can legally outline the terms here (although, as mentioned, others have) but we encourage everyone to reach out and contact us for a one-pager overview of the numbers and all that legal stuff.
For anyone worried about the fact we’re in China, the opportunity is with our parent entity, which is registered offshore. Essentially it’s a huge challenge for non-Chinese to invest directly into China, hence the offshore entity that ultimately owns our Chinese operating company.
As for the buy-in. We want people more than we need money. The more people we have involved as Ambassador Investors, the faster awareness of our project will grow. With more awareness, there’s logically going to be more people interested in trying our products once they are in the market. And of course, we’re quietly confident we’ll deliver on quality, and customers will come back time and time again.
That’s why the buy-in is 500 bucks. Yes, $500 (or the equivalent in other currencies so at the time of writing this it is €466, £400 ₣445, $682 in Canadian dollars, $784 in Australian dollars, or you can look up your own currency on the internet. Sure, people are welcome to pile in more if they want to, but $500 is the entry point.
If that’s enough to get you interested and you’d like to know more, you can CLICK HERE to go to our website and find out how to contact us. If you’d like to read more first, here are some links that might be of interest:
Here’s a quick summary video that tells you our story.
Here’s our company page on LinkedIn.
Here’s our company page on Facebook.
Here’s our company page on Twitter (not sure if it’s still called that, but anyway…)
If you use WeChat you can scan this QR code to follow our WeChat official account.
If you use WeChat the short videos platform, you can scan this QR code to follow our channel.
What are the alternatives to Dramfunded? Could Nine Rivers Distillery have been possible with other approaches? If so, why was the choice for Dramfunded made? We explore all this and more below. As a frame of context, it’s probably worth explaining how businesses are normally funded: They emerge from an idea, to a startup, and […]
Read MoreWhat are the alternatives to Dramfunded? Could Nine Rivers Distillery have been possible with other approaches? If so, why was the choice for Dramfunded made? We explore all this and more below.
As a frame of context, it’s probably worth explaining how businesses are normally funded: They emerge from an idea, to a startup, and then on to an operational business resulting in, in some cases, a public listing. Don’t worry, we won’t get all nerdy about this. We’ll keep it simple and from OUR perspective, so before any investment experts pile in ranting about how we’re wrong, please remember that we’re humble whisky lovers, not investment bankers.
From our point of view, we saw our key stages as being the following:
Pre-Seed. The first drop of money where a founder or founders would have some cash to put a concept together.
Seed rounds and beyond are where a founder or founders might reach out to friends, family and professional connections with a concept that needs funding to sprout. There is also a common trend to engage with professional investors such as angel investors, venture capitalist and eventually private equity. We’ll explain these in a moment.
The seed rounds are normally broken down into phases, called Series A, B, C and whatever other letters might be needed to distinguish different rounds of funding.
Series A might reach out to angel investors. Series B might include venture capital companies. Series C might include private equity. Angel investors typically work in the US$1-US$10 million range, and are usually prepared to take more risk for expected bigger returns. Venture capitalists typically work in the US$10-US$50 million range, investing in more established and proven businesses. Because the business has established footing, there is less risk and less return than an angel investor. Private Equity works with bigger numbers, lower returns, and expects to see a firmly established operation, perhaps a market leader or dominant brand.
We started with a Pre-Seed investment round – this is where we pooled together some rambos (our term for RMB) to cover all the early costs. These costs included setting up a legal entity, paying for some lawyers to legalise our view on the company structure, shareholders agreements, renting and registering an office (all companies need a formal office in China – none of that PO box nonsense, or adding a letter to a home address to refer to a desk in a garden shed) and covering travel costs to travel the length and breadth of China to find a home for our project. If there was an alternative to dramfunded, it definitely wouldn’t have had such a cool origin story. Plus, we also used some money to register all our IP (intellectual property) which included trademarks and patents.
We then moved into the Seed Round, where all of our Pre-Seed investors threw in more money and we brought in more people with more money. We needed this to show the government here in Longyan that we were serious and that we had the money to bid for land. We put down a deposit and engaged with our architects to start designing our new home.
More lawyers, more legal costs, including a restructure (yup, first load of lawyers gave us the wrong advice), and we put Hayden Zou full time in Longyan to start moving things forward on a local level. With his cheerful demeanor and can-do attitude, he’s been rocking things in Longyan.
Logically, the next thing to do would have been to start a Series A round, but (although we needed more money) the project just wasn’t at the developmental level needed to start a Series A. So, instead, we did a couple of Convertible Note rounds.
A convertible note is similar to a loan and kinda like an investment. Investors throw in their money and earn an agreed rate of interest. The notes then have a clause where, at the start of an equity round (Series A) the note holder can either take back their money and the interest earned, or, convert them into Shares at the Series A round.
In Series A, we wanted to raise enough money to build the first 3 buildings of our distillery, purchase all the stills and other shiny things we needed to start producing, and get some spirit running off the stills. We worked out that we needed about ¥100 million and that would need about 1000 whisky lovers.
There’s some simple maths behind that number. The board have always funded 60% of the project, leaving the other 40% to be funded by micro-investor whisky lovers. We know the average investment from our whisky lover army, so a few button clicks on a calculator and bingo, we have a pretty accurate guess. Who said high school math was useless?
However, building up to 1000 people takes time, so rather than have everyone waiting for as long as it takes before they get their share certificate, we split our Series A into 4 phases, allowing us to essentially round closure and issue certificates, within months of investment, as opposed to waiting until everyone had chipped in.
There almost were. We considered a few alternatives to our dramfunded approach. We had the calls and we did the meetings. Yet, it just wasn’t right for us at the time.
We won’t kiss and tell (it’s rather uncouth to do that after all), but the major difference is simply the massive void that we saw between their “knowledge” and our “experience”. While MBA’s, hand tailored suits, shiny shoes, and monologues full of buzz words and acronyms sound rather impressive, they don’t mean diddley if you don’t know China at a grass roots level.
Bringing a “branding and marketing expert” and showing some slides on a concept rebrand, inspired by a dozen click bait posts on LinkedIn (in which they argue that everyone in China loves the colour red because it’s lucky lucky lucky!) is not a “value add”…especially when the key message was that this “expert” would be billed to the company at the “amazing value rate” of US$5000 – per day! We weren’t expecting to have to PAY for alternatives to dramfunded!
Talking to a distillery start up with the opening line that you don’t drink whisky but you’re a “super dooper baller investment guru”, all while holding some green juice muck in a sleek designer cup because of some new age detox nonsense doesn’t really cut the mustard. If there’s not whisky in that cup, we are absolutely not entertaining it as a serious alternative to dramfunding.
Of course, we’re sure that not all professional investors are like this. We just have enough confidence in our project to believe there are profits for investors, which is why professionals didn’t win out over dramfunding. Ultimately, we’d like to see something a bit more interesting than fluff, waffle and noise for the sake of being heard.
(Note to any professional investors reading this – don’t task any wheatgrass-smoothie-swigging-suited buzz-word wobblers with contacting us. They will walk out emotionally and mentally battered. Get a normal, no nonsense, WHISKY DRINKER to get in touch…)
It’s not uncommon for other big players in the industry to get involved in startup or early stage projects. In fact, the vast majority of distillery start-ups, despite their marketing fluff and waffle, are mostly only starting because they dream of a big-bucks cash out when one of the major players rock up with their army of suits and a cheque book.
Even us. Humble as we are with absolutely NO bragging whatsoever about this, we’ve had a number of approaches from some very big names in the industry (kinda rude to name them, but 2 very large baijiu producers and a rather well known Scotch whisky producer…) and enjoyed those conversations immensely. There’s zero shame in getting a kick out of a knock on the door when you’re nothing more than a slide deck and a muddy field.
One offer (one of the baijiu companies) was for a total buyout at double what we believed our value to be. Yes, even as just a slide deck and some mud. Flattering offer, but there was zero interest from all of us. Their second offer to buy 51% and retain full control over branding and marketing was met with a typically legendary outburst of mirth by the grey haired monster and the rest of the team. This was not going to be an alternative to dramfunded.
A second offer (the other baijiu company) was never going to go anywhere in our mindset. Ponying up their “head of whisky” who spent the entire call talking about their vision for whisky matured in Chinese yellow wine casks resulted in us pressing the mute key and rolling around on the floor in fits of laughter.
The old yellow wine cask maturation is a copy and paste from EVERY Chinese forum about whisky, where there’s a sheep level mentality about this being the best way to craft a “Chinese Whisky”. We think it’s nonsense. It would produce something vile and probably taste like a cheap vodka that has macerated rotten fruits, pencil shavings, and cigarette ash. Again, this was not offering alternatives to dramfunded.
As for the Scotch player, our first reaction was “what a bunch of dinosaurs”. With a mentality stuck back in the 1800’s their “vision” was to do what they have been doing for generations: the same old crap for the mass market, as their grandaddy’s grandad started.
In fact, calling them dinosaurs is a compliment. These people were from the Paleozoic era. Barely multicellular lifeforms. At least dinosaurs ran around with big scary teeth and gobbled up the smaller animals. The main armament of these guys was their ability to bore people to death. No surprise that we didn’t consider them as alternatives to dramfunded.
Again, we’re sure that not all of the industry players are so out of touch with reality, but until something a bit more in line with what we want to do, and more in touch with the fact that our calendar suggests we’re living in the 21st century and not the 19th century, then we’ll continue to do our thing with full independence from the major players. As it turns out, there really isn’t a good alternative to dramfunding.
(Note to any industry players. We have no interest in being an extension of your bulk spirits division. We’re doing single malt, we’re aiming for the top end of the market and we’re gonna shake up the global industry. If that’s “too ambitious” for you, then don’t waste your time, or ours.)
So that’s why we are who we are, and why we continue to be dramfunded. Whisky lovers chipping in their coins, to have some skin in the game, and combine their bragging rights for being an owner, all while spreading the word about what we’re doing.
In a culture where word of mouth and personal recommendations are the major influencer in consumer interest and purchasing trends, we think we’re doing the right thing.
In a project where everyone invested actually loves whisky and wants to be fresh, raw, creative, and distinctive in a commitment to put quality before profit and greed – we think we’re approaching this exactly as it should be.
Whisky for the people, by the people.
If you enjoyed reading about how we currently don’t see any alternatives to dramfunded, and you would like to catch up with some of our past articles, then please CLICK HERE and go to our News Section, where most of our other content is published.
One of the easiest ways to help our project succeed is to take an interest in anything we have for sale. You can find out what we have if you CLICK HERE and go to our shop. We’ll make a few percentage points (after sales tax) and this goes directly to our project.
You could help us by simply buying your very own Brick for Life – a brick with a steel name plate wrapped around it, which will be cemented into The Plenum (our feature wall) in July 2023. Every brick owner is entitled to a free dram for life every time they visit us in Longyan, Fujian.
Or, you could learn more about being involved and help us grow to our target of 1000 stakeholders. You can read more about how we are Dramfunded if you CLICK HERE. Remember, we currently have no alternatives to dramfunded!
Last, but as important as all the other points above, you can help us by reading, liking and sharing our content across some of the more popular platforms.
LinkedIn users you can CLICK HERE to follow us.
Facebook users, you can CLICK HERE.
YouTube users, you can CLICK HERE.
Twitter users, you can CLICK HERE.
Instagram users, you can CLICK HERE.
Beyond the obvious questions one asks an up-and-coming distillery, one question we frequently get asked is, “how is Nine Rivers Distillery funded?”. We’re Dramfunded. It’s one of the things that make our project so unique, and also underpins why we’re confident we’ll be a successful crafter of world class whisky. If you’re not sure what […]
Read MoreBeyond the obvious questions one asks an up-and-coming distillery, one question we frequently get asked is, “how is Nine Rivers Distillery funded?”. We’re Dramfunded.
It’s one of the things that make our project so unique, and also underpins why we’re confident we’ll be a successful crafter of world class whisky. If you’re not sure what Dramfunded is, then read on.
It’s our own word that we use to describe a group of whisky lovers, pooling their hard earned rambos* to fund a project. In our case, it’s Nine Rivers Distillery. A project that was initially funded (at our pre-seed round) by the equivalent of about a years spend on whisky for each of the first founders.
*rambos, a colloquial term we use to refer to our local currency – “RaMBo’s”
It’s kinda the same as Dramfunded, except without the requirement of being a whisky lover.
Crowdfunding isn’t a new concept. The Statue of Liberty was crowdfunded in 1885, or at least the pedestal to mount it on was. Since Congress couldn’t agree on the funding, and the New York Governor refused to use city funds, it seemed impossible until Joseph Pulitzer raised the needed funds over a 5 month period, accepting donations from US$0.15 to US$250. 160’000 people pooled just over US$100,000 and saved the statue, creating what we now call crowdfunding.
Since then, rock bands have used crowdfunding to finance tours, groups have raised money to fund legal cases, movies have been crowd funded and, in more recent years, startup businesses using crowd funding have been almost part of pop culture. Maybe you yourself have even used a crowdfunding website for something you liked or believed in.
However, while most crowdfunded projects use a crowdfunding website or portal, we don’t. Hence the title, Dramfunded, not Crowfunded.
Most crowdfunding projects for startups will be one of two types – rewards based crowdfunding or equity based crowdfunding.
Rewards based crowd funding is really simple. Someone has a concept for a product, but can’t afford to build it. In this way, the product is essentially pre-sold to interested consumers. The startup will then design, develop, and manufacture this product and eventually ship them out to the eagerly waiting customers.
There have been some amazing success stories. A project to make a funky watch snagged over US $20 million. A cooling box with speakers raked in US $13.2 million. Even a camera tripod hit over US $12 million.
Equity based crowd funding is different in the sense that the end consumer becomes an investor and receives shares in the business (equity) for their money. One of the most famous equity based crowd funding success stories is also in the alcohol industry. Brewdog are now reported to have 200,000 investors, raising over £100 million and now have a business valued at £2 billion. Not bad, Brewdog.
You wont find us on Kickstarter, Indiegogo, GoFundMe or any of the other hundreds of platforms.
There’s a number of reasons why you won’t.
Primarily, it’s because most crowd funding websites (and the processes involved) end up costing a huge chunk of money. The website itself can end up costing anything up to 12% of the capital raised, and most of them add another cost of a few percentage points for processing payments.
If that wasn’t enough, there’s also another stack to be spent on a services agency to help put your story into “Crowdfunding Friendly Format”.
Crowdfunding is a competitive industry and there are literally thousands of projects live at any one time. Without a skilled and experienced professional agency (the types that know the best way to grab attention, tell a story, and get people to hand over their hard earned money) there is very little chance of success.
Agencies don’t just ensure the overall presentation and image is perfect, they also know all the tricks to get your story featured on crowd funding discussion websites, forums, and all the other places to get eyes on your project.
Do the math with us. Those agencies normally want 25% of the gross total raised, plus when you factor in an additional 12% lost to the crowd funding websites and their payment fees, and that’s almost 40% of the money gone, a steep sum.
Imagine paying full price for a bottle of whisky and you were given a 420ml bottle instead of a 700ml.
Exactly. Now you can understand why we went for the dramfunded approach!
Everything we have done so far. Everything we have achieved. Everything we have raised. It has all been through word of mouth. The chain is simple: a person gets involved through knowing everyone else at one of the various Whisky Networking events, then tells their friends about being part of a crowd of likeminded whisky lovers who want to do something special in the world of whisky.
That friend learns more, understands what we aim to achieve, wants to be a part of it, and then tells one or more of their friends. This continues and cascades and we grow. We raise more money at each stage of investment, sure, but more importantly, we have more people to talk about our ambitions to their network.
It’s not just about raising money. It’s also about building the brand awareness and communicating our message to all of our potential future customers. As well as the fact that everyone has a talent, a skill, or a passion, all of which we can utilise within our project.
Not being a multibillion dollar alcohol conglomerate, we can’t throw ¥1 billion at a project with two stills – or even just CLAIM to be doing that in some kind of shareholder appeasing spin doctoring.
What we ARE doing is building something with more than 7 times the production capacity of THAT project, for a fraction of the price. We spend less because everyone rolls up their sleeves and mucks in.
Dramfunded isn’t just about the money raised. Everyone has something more to give. With over 200 people involved, just an hour a week from each person gives us 200 hours a week. Many of them contribute considerably more than just an hour. But even on the minimum, that’s 200 hours a week of diverse skills, extensive experience, natural talent and real world business experience – considerably more use to us than a bunch of big bucks consultants flown in from abroad, armed with nothing more than an MBA, a shiny pair of shoes, and a Mandarin travel phrase book.
How many startups in any industry (let alone a distillery) can claim to have their own architects, structural engineers, construction experts, scientists, mechanical engineers, software developers, graphic designers, packaging experts, marketers, linguists, chemists, logistics experts, distributors, a minivan’s worth of international C-level executives, and a coach load of successful entrepreneurs, some of whom have listed multimillion dollar companies on stock exchanges?
Our group of passionate people are all united under a single vision to create world class whisky.
We’ll continue our story how we’re funding Nine Rivers Distillery. More reasons why we chose this approach. How it benefits our project and, the big ones – why haven’t we taken in any big corporate money (despite a number of offers……).
If you enjoyed reading about how we are dramfunded, and you would like to catch up with some of our past articles, then please CLICK HERE and go to our News Section, where most of our other content is published.
One of the easiest ways to help our project succeed is to take an interest in anything we have for sale. You can find out what we have if you CLICK HERE and go to our shop. We’ll make a few percentage points (after sales tax) and this goes directly to our project.
You could help us by simply buying your very own Brick for Life – a brick with a steel name plate wrapped around it, which will be cemented into The Plenum (our feature wall) in July 2023. Every brick owner is entitled to a free dram for life every time they visit us in Longyan, Fujian.
Or, you could learn more about being involved and help us grow to our target of 500 stakeholders. You can read more about how we are Dramfunded if you CLICK HERE.
Last, but as important as all the other points above, you can help us by reading, liking and sharing our content across some of the more popular platforms.
LinkedIn users you can CLICK HERE to follow us.
Facebook users, you can CLICK HERE.
YouTube users, you can CLICK HERE.
Twitter users, you can CLICK HERE.
Instagram users, you can CLICK HERE.