The Story of Buy Beer and Regulatory Hurdles to Crowd Funding by David Drake

A fascinating article over at Fast Company tells a tale of adventures in crowdfunding with an attempt to buy Pabst Brewery.

The short version is that regulatory hurdles (in 2010) killed the process. Mostly because of outdated and draconian laws dating back to the 1930’s. Buy-a-Beer was a breakout crowd sourcing offer that quickly raised $210 million in pledges for Pabst, but ran headlong into rules that forbade such investments by other than friends, family or accredited investors. Thankfully, over the next several years, the landscape for crowdfunding changed dramatically in the positive direction, culminating with the passage on March 27th, 2012 of the CROWDFUND Act. The story is an interesting one and well worth reading.

At LDJ Capital, we’ve been working in parallel with The Soho Loft since the spring of 2011, helping bring real power to the crowdfunding idea. The Capital Creation and Formation Conference series held its first event in Atlanta, in August 2011. Since then, we’ve had five sub congressional witnesses attending the events ever since. This gives us a connection to the regulatory committees and serves as an indirect lobbying effort. Senator Patrick McHenry spoke at our January 2012 event as well as in March, shortly before the bill passed. This is an encouraging sign and runs counter to the stereotype of Washington ignoring important advances in the financial marketplace and crowd-based venture capital in particular.

The story on Buy-a-Beer didn’t end with the purchase of Pabst. The deal never came to fruition and illustrates that many challenges remain. One regulatory hurdle overcome didn’t solve all the problems. For example, the SEC rulemaking process is still playing out. We do, however, remain committed to meeting the needs of the crowdfunding environment — not the least of which is transparency and a desire to invest in socially responsible causes.

You can find out more at

— David Drake

Founding Board Member of CFIRA

Crowdfund Intermediary Regulatory Advocates, or CFIRA, was established
following the signing of the Jumpstart Our Business Startups (JOBS)
Act. CFIRA is an organization formed by the crowdfunding industry’s
leading platforms and experts.  The group will work with the
Securities & Exchange Commission (SEC), the Financial Industry
Regulatory Authority (FINRA), and other affected governmental and
quasi-governmental entities to help establish industry standards and
best practices.