Brewdog: James Watt ‘heartbroken’ as craft beer firm sold
Brewdog co-founder James Watt has said he is “heartbroken” after the craft beer titan’s sale cost nearly 500 jobs and left thousands of “punk equity” investors empty-handed.
Watt, who co-founded the firm with his school friend Martin Dickie in 2007, said the past week “has been incredibly hard” and described the sale to US cannabis firm Tilray as “not the ending we all wished for”.
Brewdog kickstarted the nation’s craft beer obsession and had been valued as high as £2bn, but on Monday it was sold to the American pharmaceutical and lifestyle group for just £33m.
The Scottish businessman wrote on LinkedIn: “This week has been incredibly hard. It is really difficult to find the right words and know what to say.
“I am heartbroken for all of the hard-working and passionate team members who have lost their jobs. I am heartbroken for all of our brilliant equity punks who did not get the return on their investment they wanted.
“And heartbroken to have dedicated the best 20 years of my life to something that ultimately did not have the ending we all wished for.”
Watt admitted the beer firm expanded too fast and too wide “at times” and said he failed to curb spending enough to preserve the business’s long-term health.
Watt ‘heartbroken’ over hundreds of redundancies
The sale to Tilray included the Brewdog brand, brewery and some of its British bars, but advisors AlixPartners could not find a buyer for 38 of its locations, meaning they were shut immediately, and 484 workers lost their jobs.
Watt said, “To our team members leaving this week: thank you. You helped build something that mattered. I am sorry we could not protect you.”
One LinkedIn user slammed the beer firm for the loss of nearly 500 jobs through the sale, which the commenter dubbed a “total disgrace”.
The craft beer tycoon also apologised to as many as 220,000 everyday investors who bought into Brewdog’s “equity for punks” scheme, which offered cheap shares in exchange for perks like discounted pints.
Watt apologises to equity punks
The “punk” investors will make nothing back from the company’s sale. Watt said: “To our equity punks: thank you for having the conviction to believe in the business when this was just two humans, one dog and a crazy idea.”
Wealth advisors said Brewdog is a cautionary tale about the risks of crowdfunding rather than government-protected venture capital schemes.
Susannah Streeter, chief investment strategist at the Wealth Club, said: “The sad saga of BrewDog highlights how investors in start-ups and scale-ups need to do their homework and opt for schemes offering them protection if the investment turns sour.
“BrewDog’s Equity Punks believed they were buying a slice in a company with a bright future, attracted by flashy marketing materials.”
Watt had not commented publicly since the intention to sell Brewdog was announced last month, but reports claimed he had been lining up a comeback bid for the brewer with £10m of his own money.
Watt and Dickie both stepped away from the company in recent years after allegations – fiercely denied by the founders – of a toxic workplace and a “cult of personality”.
Reports suggested Watt’s bid for Brewdog would have pledged to protect at least 65 per cent of employees, but it was said to be backed by a family office linked to controversial equity firm Modella Capital, which has placed a number of retailers into administration.