Crowdfunding campaigns are nothing new in Colorado’s craft beer industry. Dozens of breweries have raised money on platforms like Kickstarter and GoFundMe to finance everything from startup costs to equipment purchases to emergency relief. In return for donations of $50 or $100 or $250, participants received perks from free beer and t-shirts to brewery tours and other swag.
What Lafayette-based Westbound & Down Brewing is doing with its crowdfunding campaign, though, is something different — and it will cost supporters a lot more.
In April, Westbound & Down began seeking investments through a type of public offering called “regulation crowdfunding.” The brewery wants to raise up to $1.24 million to increase beer production fourfold, expand its distribution footprint, and eventually open new brewpubs, including one in Denver. For a minimum of $735.75, anyone can buy shares in the 10-year-old company — at $2.25 each — and support its future plans.
The public offering, now live through a company called DealMaker, comes at a time when the craft beer industry is struggling. Beer production dropped 4% in 2024 compared to the year prior, trade group the Brewers Association recently reported. Additionally, last year was the first time in two decades that the number of brewery closings outpaced openings nationwide.
The economic headwinds have inspired major ownership consolidations in the craft beer sector. Molson Coors, for instance, offloaded its craft portfolio and shut down its in-house craft incubator, while AB InBev, the maker of Budweiser, sold large pieces of the breweries it had acquired over the past 10 years. In addition, independent beer makers have joined forces, including Left Hand Brewing in Longmont, which merged in April with Dry Dock Brewing; and Denver Beer Co. and Great Divide Brewing, which have been rolled up into a single entity.
However, Westbound & Down CEO Jake Gardner said his brewery is different — it’s on the upswing, so much so that production isn’t keeping up with locals’ thirst for its beer.
“Every time we’ve added more equipment, we’ve been sold out of beer,” said Gardner, who is also the co-founder and head brewer. “We’ve added a considerable amount of equipment recently and we’re still sold out of beer. Hopefully, at some point, (we can) keep the beer on the shelves.”
In December, Westbound & Down inked a distribution deal with Elite Brands of Colorado to bring its products to more parts of the state and recently spent $750,000 on major upgrades, including six new fermentation tanks, which will help increase brewing capacity. In 2024, the brewery made 6,000 barrels of beer (equivalent to around 12,000 kegs), up from just 900 barrels in 2019.
Westbound plans to increase that to 19,000 barrels by 2028 (and to make $3 million in annual profits), according to the investment documents. But to take that step, Gardner knew he’d need access to more capital. Though Westbound has sought more traditional avenues of funding in the past, including bank and Small Business Administration loans, finding an inventive way to raise money and build a legion of fans who are literally invested in their success is a win-win, he said.
“We liked the ability to connect with our everyday customers,” he said about crowdfunding. The brewery has offered stock to friends and family. “But at some point, you run out of friends and family. If we’re taking on people we don’t know, I’d rather they be our fans.”
A deep dive into the numbers
With regulation crowdfunding, the U.S. Securities and Exchange Commission allows companies to use online platforms like Dealmaker and Wefunder to raise up to $5 million in a year without registering with the agency. But to do so, they must comply with SEC disclosure requirements, meaning they have to publicly lay out their accounting books, goals and other information.
In this case, those documents provide an extraordinary amount of transparency into the finances of a private company. For instance, the SEC filings show that, in 2024, Westbound had a net loss of $1.52 million on total revenues of $10.2 million. It has total assets of nearly $7 million and debts of nearly $7.5 million.
Though the business is currently operating at a loss, Gardner said breweries become profitable at scale as they increase buying power on raw materials, like malt and hops, and keep the cost of labor consistent while ramping up production. Westbound & Down has also been investing in growing its brand. In December 2023, it paid $1.8 million tobuy High Country Brewing, the holding company for Aspen Brewing and Capitol Creek Brewery in Basalt.
“We have had profitable years,” Gardner said. “Years where you double top in revenue and purchase Aspen Brewing Co. (are) not going to be that year.”
Still, Gardner said the company has valued itself at nearly $24 million because of its plans to scale up. In other words, the more beer and food it sells while keeping operating costs low, the more revenue it will bring in.
Westbound & Down’s most popular beers are the West Coast-style Westbound IPA and its hazy cousin, Juice Caboose. Despite being maxed out and winning the title of mid-sized brewpub of the year at 2019’s Great American Beer Festival, it is still a relatively small operation.
If production ramps as anticipated, by 2028 the brewery will still be smaller than Left Hand Brewing and Denver Beer Co., which brewed 28,313 barrels and 21,849 barrels of beer in 2023, respectively. By comparison, Colorado’s largest craft brewer, Odell Brewing, made more than 105,000 barrels the same year.
Enthusiasm so far has exceeded expectations. Gardner said 215 people have invested and another 600-plus have started the paperwork to do so. That gets Westbound & Down to the majority of its target goal and means fundraising could close as soon as May.
One thing investors should know: Since shares aren’t publicly traded, they can’t be easily sold. Westbound & Down plans to reinvest all profits into the business for the foreseeable future, so this should be considered a long-term investment, Gardner said. In fact, the only way to get a return is if Westbound is sold or goes public.
“These are both considered long-term exits, taking approximately 5-10 years (and often longer),” the brewery said in its prospectus. “Sometimes there will not be any return, as a result of business failure.”
A growing trend
Though somewhat novel, “regulation crowdfunding” efforts like Westbound & Down’s are becoming more popular in the beer and spirits industries. One reason is that platforms like DealMaker lower the cost for microinvestments, Gardner said. “Their technology, in a way, democratizes investing in privately owned companies.”
In January, Golden’s gluten-free beer maker Holidaily Brewing Co. closed a similar campaign and raised more than $900,000 to fund a multi-state distribution plan. In mid-April, Shelter Distilling – which opened its 14,000-square-foot, flagship brew-stillery in Montrose in 2024 – launched a campaign to help grow its inventory, capital reserves and marketing efforts.
Similarly, Colorado beer stalwart Left Hand Brewing Co. closed a regulation crowdfunding campaign in February, which collected about $820,000 from 396 individual investors. That money helped the company buy Dry Dock Brewing Co. in Aurora, and will also be put to use expanding Left Hand’s sales and marketing personnel and acquiring additional real estate, said spokesperson Jill Preston.
This was Left Hand’s first crowdfunding effort in its 32-year history, and Preston said it was a success because drinkers are privy to the industry’s challenges.
“Staying independent requires collaboration, and we’re working to build a platform that not only helps us stay strong but also supports other like-minded beverage companies,” Preston said by email. “We believe our investors see the long-term value of that vision and want to be part of building something that supports future growth.”
A new champion
Growth has been the mantra for Westbound & Down, which started with a single location in Idaho Springs in 2015 and has since expanded to five, including a state-of-the-art brewhouse in Lafayette. Distribution sales, meanwhile, have ballooned 1,835% since 2019, the brewery states in its offering.
What makes this brewery, specifically, a good investment?
“Really, it comes back to quality,” Gardner said. A decade ago, when craft beer was booming, “people overinvested in growth and underinvested in quality with this assumption that everybody was on the rise.” Westbound, he added, is doing the opposite, starting with quality.
Its next steps would be to expand sales into other states, like Nebraska, Illinois, Texas, New York, California and Oregon. The company’s leaders also plan to open more brewpubs — beginning in Denver, and then maybe going state lines.
Since 2022, Westbound has operated a small taproom near Denver Union Station, but it only serves beer. Gardner said the company thrives when it can offer a fuller hospitality experience. He hopes to identify a new Denver location by the end of this year.
Not to say the beer isn’t worth a stop alone. Westbound & Down is one of Colorado’s most awarded breweries, consistently earning accolades at prestigious competitions like the Great American Beer Festival and the World Beer Cup. As market forces trim out some existing breweries, Gardner believes his company can emerge as a leader.
“Colorado craft beer, which I’m very proud to have been part of for a long time, needs a new champion,” he said. “Every day, we’re confident we’re going to continue the pursuit of keeping that legacy of Colorado craft beer excellence alive, and we believe people in Colorado want that.”
