Brewpub offering free beer in exchange for money

You are probably aware that the S&P 500 is down just over 7.5% YTD. That doesn’t mean that you should just give up on investing; it means you need to be smarter about your investments. What would you say if I could offer you a nearly risk free opportunity?

With the economy struggling, start-up capital is much harder to come by than it once was. This has led one group of partners with the dream of creating the Smokehouse Brewpub to raise money in a very unique way. It began with swapping future beer for goods and services. Unfortunately they still needed a cash infusion in order to secure the bank loan. That’s when they decided to do something incredibly risky (think Barney Gumble) but brilliant. They are allowing people to invest $1,000 in the brewpub, and in exchange will receive free beer for life. Yes, you read that correctly, free beer…for life.

At this point my inner cheapskate kicked and and I started to do some mental math. $1000 is probably about 200 beers (the interview later revealed it would be 210, though who charges $4.76 for a beer?). At my current drinking pace, I’ll probably have 200 beers by Feb 16th, 2012. Add to that the fact that if beer was free I would drink significantly less hard liquor, and you are looking at an even shorter time frame.  So they are telling me that I can recoup my costs in under five months and then drink free forever? This could be the greatest investment to come along since Seward’s folly.

 

 

Before you pack up your laptop and move to The Gopher State, there are a few things you should consider.

 

1) This essentially just an advanced payment on beer. Sure it’s free down the road, but try convincing your friends who didn’t invest to go to the same bar every weekend. It’s not going to happen.

2) The brewpub may fail miserably. Just because they get funding doesn’t mean they will stay afloat. In 2010, 55 brewpubs opened and 33 closed.

3) Their beer could be terrible. I doubt that will be the case, but there are plenty of bad craft beers on the market.

4) You can brew your own beer for about $5 per 6-pack (after startup costs), meaning you could have nearly 1200 beers for the cost of this “lifetime” beer deal.

 

If you’ve hired a stats major to run your own numbers and you still want to go swim in the Land of Lakes, you can check out their website for details on how to invest.

News coverage here and here.

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