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Hospitality Villains Article

This Premium Beverage Brand is Expanding. You Can Invest in Their Growth.

18.21 Bitters is in the process of expanding their range of premium bitters, syrups and mixers.

The brand’s expansion is an opportunity for people to invest in the company’s—and their own—future. It’s an exciting chance to purchase a stake in an innovative small business.

We find ourselves in precarious times that highlight the need to look at our financial plans and revenue streams. Investing is risky but has the potential to strengthen an individual’s financial situation.

The opportunity to invest in a growing beverage brand owned by small business entrepreneurs is an exciting proposition. I spoke with Missy Koefod about what investment opportunities and new products she and co-founder Kristin Koefod have planned for 18.21 Bitters

For the next 18 to 24 months, the co-founders have three investment rounds planned: a Republic Crowd SAFE round, a priced round, and a Series A round.

18.21 Bitters—which is woman-, Black- and LGBTQ+-owned—is seeking $1 million in Crowd SAFE funding and $1M in the priced round. At the time of our conversation, Missy explained that she expected to have raised more than $100,000 by the end of this weekend.

Investors can invest as little as $100 in the Crowd SAFE round, and 18.21 Bitters has already surpassed their minimum investment goal. There are 74 days left to invest.

Now, I’m not a financial guru or investment expert. Nothing in this article constitutes financial or investment advice. However, I’m going to take a crack at a crash course to provide a cursory explanation of Crowd SAFE, priced and Series A funding rounds below.

Crowd SAFE

The Crowd SAFE round is happening right now on Republic, a crowdfunding equity investment platform. Companies seeking investment via Republic are vetted with less than three percent achieving approval. The platform’s funding portal and broker dealer are Financial Industry Regulatory Authority (FINRA) members and registered with the United States Securities and Exchange Commission (SEC).

SAFE stands for “simple agreement for future equity.” The agreement gives an investor rights to future equity in the company. In general terms, investment in a SAFE is done so without a specific price per share having been determined. When a triggering event occurs—a priced round or a liquidation event are traditional examples—the investor shares in any “upside” that was generated between providing funds for the SAFE and the trigger.

When it comes to the Crowd SAFE investment that Republic offers, a liquidity event doesn’t, generally speaking, automatically convert just because another equity financing round occurs. Learn more from Republic here.

Missy addressed a question posed on the 18.21 Bitters Republic page about return on investment. She explained that Crowd SAFE investments will convert to equity when 18.21 Bitters reaches a $10 million valuation cap resulting from a liquidation event or Series A funding. 18.21 Bitters, as mentioned previously in this article, has plans for the latter.

Priced

The second investment opportunity is a priced round. In direct contrast to a SAFE, a priced round is based on a determined pre-money valuation.

In this case, 18.21 Bitters would be given a valuation which would determine the price per share, which in turn provides equity to investors. As stated above, priced rounds are common trigger events for SAFE investments.

However, the 18.21 Bitters Crowd SAFE round isn’t set to automatically convert to equity due to subsequent funding rounds, including the priced round. Anyone considering investing in the 18.21 Bitters Crowd SAFE round should visit the Republic site to learn about trigger events. 

Series A

Missy shared that 18.21 Bitters plans to launch Series A funding 18 to 24 months from now. Series A funding is crucial to small businesses as these rounds attract venture capitalists.

Traditionally, these investors buy up to 30 percent of a company and provide it with six to 24 months of funding for product and brand development. It’s for precisely those reasons that 18.21 Bitters is seeking funding.

Over the course of the past six years, Missy, Kristin and their small team have driven 18.21 Bitters to profit. The company has generated $5.5 million in revenue to date since 2014. 18.21 Bitters is profitable and additional funding will accelerate growth, allowing the company to increase production eight-fold. More on those plans below.

After the Series A funding round is completed, Missy projects a “substantial” exit within three to five years. 

Expansion

Missy and Kristin have big, exciting plans for the immediate future of 18.21 Bitters. Over the past several months, the popularity of spiked carbonated beverages, craft sparkling beverages, and premium craft mixers has been on the rise. Another growth category is cannabis-infused beverages, partially due to people seeking alternatives to smoking when we’re battling a pandemic that impacts the respiratory system.

The Koefods are currently in the process of expanding their brand to meet consumer demand. In fact, they’re introducing an entirely new brand that will live under the 18.21 Bitters umbrella.

CNBS produces low-dose, low-sugar, cannabis-infused sparkling beverages. There are three THC- and CBD-based expressions planned for initial launch: Balance, Social and Creative. As you’ve likely worked out, each expression serves a specific purpose.

Missy and Kristin aren’t new to the world of carbonated beverages. They’ve been producing 18.21 Bitters Tonic Water and Ginger Beer for years. For the record, 18.21 Bitters crafts my favorite ginger beer.

Their innate ability to create flavorful, well-balanced and intriguing bitters, syrups, tinctures and tonics makes their plan to expand 18.21 Bitters all the more electrifying. Their Ginger Beer and Tonic will be joined by Club Soda, Rose Elderflower, Coconut Lime, Yuzu Herb Tonic, Cucumber Lemon, and Italian Cola (which the Villains can’t wait to try).

Four of the above flavors will be transformed into spiked versions. This expansion of the 18.21 Bitters brand will weigh in at just four percent ABV, making them super sessionable.

What makes these expansion plans so exciting is that they’re past the concept phase. CNBS, the expanded 18.21 Bitters carbonated range, and the spiked beverage line are in production. Missy explained that the demand for these products is there. The funding rounds will give the brand the ability to meet that demand.

For more about 18.21 Bitters, visit the website and follow them on InstagramTwitter and Facebook. To learn more about SAFE funding and the 18.21 Bitters campaign on Republic, click here.

Disclaimer: Forecasts, estimates and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Past performance is not indicative of future results. The Author, Hospitality Villains, 18.21 Bitters (the Company) and Missy Koefod and Kristin Koefod (the Founders) in no way guarantee any specific outcome or profit. Investments can lose money over short or even long periods of time. You should consult your financial advisor before making an investment decision. No guarantee can be made if you invest based on the information provided in this article and/or on this website. The Author, Hospitality Villains, the Company and the Founders make no warranty of any kind regarding this article and the website and/or any content, data, materials, information, products or services provided. The Author, Hospitality Villains, the Company and the Founders disclaim any warranty as to the accuracy, completeness, timeliness of any content or information found in this article and/or on the website. The data and information presented In this article and on this website is believed to be accurate but should not be relied upon by the user for any purpose.

Images: 18.21 Bitters

 

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