Go ahead and disregard any past mention of May 29th, 2009. Jane and I may be able to fund the business with less than 25% equity, but it's going to take some time to figure out. Hopefully it won't take a lot of time, i.e. weeks instead of months, but I'd say we're fairly committed to applying for bank loans.
In other news, the most recent House Ale turned out very well. Score one for brewing session beers with low mash temps and lots of Munich malt. I have a couple more recipe tweaks to try, but I'm not sure when I'll get the chance. My appointment to the high office of 'dad' could happen any day now!
Tuesday, May 26, 2009
Tuesday, May 19, 2009
Decision Time
Five months ago, Jane and I decided that May 29th would be a good deadline for raising capital. If we could find enough startup money by then, the business would move forward. If not, we'd move on with our lives. We're almost at the magic date, but the option of bank financing has made our strategy slightly more convoluted:
-If we can fully fund the business with equity capital by May 29th, great!
-If we can fund at least 25% of the business with equity capital by May 29th, we'll give ourselves three months to raise the rest of the money through a bank loan.
-If we're unable to do either, we'll shelve the business and I'll start looking for a brewing job in the area.
So how close are we? It's very hard to say. We've learned that when you give people a fixed deadline, they wait until the the last possible moment. At least, that's what we're hoping. If I had to guess, I'd say the odds of winning the lottery are better than funding the business entirely with equity capital. I'd also say that funding 25% of the business with equity capital is an attainable goal. We'll see how it goes.
The uncertainty brings me to the point of this post: If you want to start a business where investment capital is required, have your potential investors sign documents that say something like "I intend to invest in RePublic. Upon written notice from Joe and Jane, I will contribute $25,000 within 14 days." I imagine it would be a powerful tool for both planning and persuasion. When it was suggested to me, I chose not to do it because I had already set a fixed deadline and was concerned that a call for commitments would be seen as a desperation move. Learn from my mistake!
In other news, we recently found a very strong candidate for a location. If we're still alive after May 29th, we'll let you know where it is as soon as we notify the appropriate government officials and neighborhood associations of our intent.
-If we can fully fund the business with equity capital by May 29th, great!
-If we can fund at least 25% of the business with equity capital by May 29th, we'll give ourselves three months to raise the rest of the money through a bank loan.
-If we're unable to do either, we'll shelve the business and I'll start looking for a brewing job in the area.
So how close are we? It's very hard to say. We've learned that when you give people a fixed deadline, they wait until the the last possible moment. At least, that's what we're hoping. If I had to guess, I'd say the odds of winning the lottery are better than funding the business entirely with equity capital. I'd also say that funding 25% of the business with equity capital is an attainable goal. We'll see how it goes.
The uncertainty brings me to the point of this post: If you want to start a business where investment capital is required, have your potential investors sign documents that say something like "I intend to invest in RePublic. Upon written notice from Joe and Jane, I will contribute $25,000 within 14 days." I imagine it would be a powerful tool for both planning and persuasion. When it was suggested to me, I chose not to do it because I had already set a fixed deadline and was concerned that a call for commitments would be seen as a desperation move. Learn from my mistake!
In other news, we recently found a very strong candidate for a location. If we're still alive after May 29th, we'll let you know where it is as soon as we notify the appropriate government officials and neighborhood associations of our intent.
Tuesday, May 12, 2009
Musical Analogy
I've seen a number of beer/music analogies, but mine includes wine and spirits:
-Wine is classical music. Elegant, intricate and carefully-crafted. The culture and the products themselves can be somewhat inaccessible to the uninitiated.
-Spirits can all be lumped together as 'Tom Waits'. Relatively narrow but massively deep. If you can get past the burning, there's a wealth of treasure underneath.
-Industrial light lager is the Top 40. Very well-produced, but designed to appeal to the widest possible consumer base.
-Craft beer is everything else, and not just within the confines of western music. Some is truly good, some is truly bad, and a lot is simply misunderstood. Regardless, the variety is staggering. If you want honest expression, craft beer can touch your soul. If you're a pretentious snob, craft beer has a scene for you to own. If you like it heavy, light, loud, quiet, fast or slow - craft beer does it all.
This list begs the question "what is craft beer?" I'm not going to answer that.
-Wine is classical music. Elegant, intricate and carefully-crafted. The culture and the products themselves can be somewhat inaccessible to the uninitiated.
-Spirits can all be lumped together as 'Tom Waits'. Relatively narrow but massively deep. If you can get past the burning, there's a wealth of treasure underneath.
-Industrial light lager is the Top 40. Very well-produced, but designed to appeal to the widest possible consumer base.
-Craft beer is everything else, and not just within the confines of western music. Some is truly good, some is truly bad, and a lot is simply misunderstood. Regardless, the variety is staggering. If you want honest expression, craft beer can touch your soul. If you're a pretentious snob, craft beer has a scene for you to own. If you like it heavy, light, loud, quiet, fast or slow - craft beer does it all.
This list begs the question "what is craft beer?" I'm not going to answer that.
Monday, May 11, 2009
Brewing Education
Last year, MillerCoors donated a beautiful little brewing system to the UW Department of Bacteriology. Last Friday, I attended a brewing education summit to help the University figure out what do do with it. A healthy cross-section of brewing industry folks were there, and I felt that we were able to provide a lot of useful insight. Being there reminded me of my former life as an aerospace engineering student at the University of Michigan.
Back then, my undergraduate program was ranked #2 in the country (behind MIT) by some group that decides those sorts of things. After my third year of school, I was hired as the summer intern for an R&D department of a jet engine manufacturer. During my first day on the job, I shadowed one of the technicians as he disassembled an engine. Pointing to the next part to be removed, I asked "what's that?" "The high pressure compressor." There I was, one year away from supposedly being qualified to help design an engine, and I couldn't even identify one of its major components. As my co-workers taught me how to be an engineer over the next four years, I began to realize that my education was completely inadequate at preparing me for a job. If that's true for such a well-regarded program, is it true for most of them? Are the rankings out to lunch or do they measure something completely different?
Dan Carey (New Glarus) and Tom Porter (Lake Louie) seem to believe the same thing about formally-trained brewers, and they were able to articulate it much better than I could. Breweries need people who can fix broken shit. They need people who can weld. They need people who already know the difference between a pump's input and output fittings. They need people who can step into a new operation and physically produce wort, as opposed to being trained for a month while asking questions about things like optimizing enzyme activity. With a physical brewery in its Microbial Sciences Building, I think the University is in a great position to provide both theoretical knowledge and practical experience for future brewers. If it succeeds, the school's graduates will be very well-received by the industry.
Back then, my undergraduate program was ranked #2 in the country (behind MIT) by some group that decides those sorts of things. After my third year of school, I was hired as the summer intern for an R&D department of a jet engine manufacturer. During my first day on the job, I shadowed one of the technicians as he disassembled an engine. Pointing to the next part to be removed, I asked "what's that?" "The high pressure compressor." There I was, one year away from supposedly being qualified to help design an engine, and I couldn't even identify one of its major components. As my co-workers taught me how to be an engineer over the next four years, I began to realize that my education was completely inadequate at preparing me for a job. If that's true for such a well-regarded program, is it true for most of them? Are the rankings out to lunch or do they measure something completely different?
Dan Carey (New Glarus) and Tom Porter (Lake Louie) seem to believe the same thing about formally-trained brewers, and they were able to articulate it much better than I could. Breweries need people who can fix broken shit. They need people who can weld. They need people who already know the difference between a pump's input and output fittings. They need people who can step into a new operation and physically produce wort, as opposed to being trained for a month while asking questions about things like optimizing enzyme activity. With a physical brewery in its Microbial Sciences Building, I think the University is in a great position to provide both theoretical knowledge and practical experience for future brewers. If it succeeds, the school's graduates will be very well-received by the industry.
Monday, May 4, 2009
Conference Cleanup
I'm finally starting to process the info I brought back from the Craft Brewers Conference. Just like last year, Jane and I learned a lot and had a great time. If you're looking for inspiration and controversy, you can watch the welcome reception video here. If you'd like to learn something geeky, you can check out the Draught Beer Quality Manual here.
The following week, I brought two bottles of Belgian Blond to an MHTG social meeting and received some very interesting feedback. Club members' reactions to the first bottle were overwhelmingly positive, but the second bottle received a lot of comments like "this is way too phenolic - maybe it's because I'm not big into Belgian beers." One guy thought he was drinking beer from two separate batches. Once his second sample warmed up, he realized what was going on and pointed it out to me. I learned two things that evening:
1. My ice pack is a bit overzealous.
2. Near-freezing temperatures enhance the perception of phenolic flavors. Big time!
When I'm a crotchety old brewmaster, I hope I can still say that continuous improvement is more important than my ego.
The following week, I brought two bottles of Belgian Blond to an MHTG social meeting and received some very interesting feedback. Club members' reactions to the first bottle were overwhelmingly positive, but the second bottle received a lot of comments like "this is way too phenolic - maybe it's because I'm not big into Belgian beers." One guy thought he was drinking beer from two separate batches. Once his second sample warmed up, he realized what was going on and pointed it out to me. I learned two things that evening:
1. My ice pack is a bit overzealous.
2. Near-freezing temperatures enhance the perception of phenolic flavors. Big time!
When I'm a crotchety old brewmaster, I hope I can still say that continuous improvement is more important than my ego.
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