Investors doubt Brewdog founder's shares pledge for new beer brand

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Brewdog investors say they are cynical after one of its founders announced plans to launch a new beer brand and promised free shares to people who lost money in his original venture.

James Watt co‑founded the craft beer company with Martin Dickie in 2007. At its peak, Brewdog had four breweries, around 100 pubs worldwide, and a valuation exceeding $1bn.

However, the company collapsed with debts of more than £500m and was taken over by US based Tilray earlier this year.

Watt says he will allocate nearly 20% of shares in his new beer company, called Second Best, to people who lost money after investing in Brewdog's Equity for Punks scheme.

Investors told BBC Scotland News they were "cynical" but hoped this meant they were "not going away with nothing".

Equity for Punks was an in-house crowdfunding scheme, promising beer enthusiasts a chance to "own a slice of the brewery and share in its success and growth".

In return Brewdog offered perks such as discounts on beer purchases, free birthday beer and invitations to its "Annual General Mayhem" AGM with live music and beer tastings.

The scheme is said to have raised £75m, which allowed Brewdog to expand into the international market.

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However, the company went on to source equity from elsewhere and when US equity firm TSG Consumer Partners acquired a 22% stake in Brewdog, they were given "preference shares".

This meant when Brewdog was sold, TSG was first in the queue to get back its investment plus any return owed.

Beverage and medical cannabis company Tilray bought the company's UK brewing operations, brand and 11 pubs in a £33m deal in March.

Administrators said the sale had preserved 733 jobs - but that 484 jobs were lost and 38 bars closed after they were not included in the rescue deal.

They also made clear that those who invested in the Equity for Punks scheme would not get any return from the deal.

Gareth Fitzgerald

Investors previously told BBC Scotland News that they lost up to £12,000 after the company was sold.

Some of them said they were doubtful of regaining their losses through Second Best.

Gareth Fitzgerald, who spent £1,000 on Brewdog shares, said he would sign up for the new scheme.

But he was doubtful over whether it would pay off.

"I'd be foolhardy not to, but I've got to say I'll be a very, very passive investor," he said.

"I won't be buying any of his products, but it would be silly not to sign up.

"19.3% sounds good - but 19.3% of nothing is nothing."

This sentiment was shared by fellow Equity for Punks investor Peter Berryman, who invested around £3,000 on behalf of him and his sons.

"It's a nice idea that potentially we're not going away with nothing, I'm just wondering what strings are attached," he said.

He said would follow up on the proposal despite being "very cynical" and said he "will be checking the small print".

'Second best'

Watt stepped down as chief executive of the company in 2024 and later apologised to staff and investors for the "many mistakes" made, admitting the company tried to diversify too quickly.

Announcing his new venture, Watt said on social media: "Thousands of people trusted me to build a brilliant beer business and create value for them.

"It was an obligation I took very seriously. And I, for one, am not done with that obligation."

He says he plans to allocate up to 19.3% of the company to former investors.

Watt claims they will be able to "claim the exact stake" they once held in Brewdog "for free."

He added: "No catches, no cash required, and your equity in Second Best will always rank alongside my own.

"You'll own it. I'll fund it. And I'll dedicate myself to building it. You're not shareholders this time. You're second founders."

He said the company is still seeking relevant licenses and legal consents, so they do not have a launch date.

Watt said this "may take some time", so he hoped to launch an "alcohol adjacent concept" to begin with.