Mother Road Brewing Company

Mother Road Brewing Company

About this raise

Mother Road Brewing Company, with a valuation of $40.04 million, is raising funds on StartEngine. The brewery brews distinguished beers and connects the community one pint at a time. Mother Road Brewing Company offers taproom hospitality and distribution across three states, of which 30% of the revenue is generated from the taprooms. The business is led by industry veterans and has generated $10 million in revenues. Michael Marquess founded Mother Road Brewing Company in January 2010. The current crowdfunding campaign has a minimum target of $15,000 and a maximum target of $2 million. The campaign proceeds will be used for research and development, equipment, debt retirement, capital reserves, and expansion in new territories of New Mexico and Southern Nevada.

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Investment Overview

Invested this round: $1,033,874

Deal Terms

Total Commitments ($USD)

Platform
StartEngine
Start Date
06/06/2024
Close Date
01/06/2025
Min. Goal
$15,000
Max Goal
$2,000,000
Min. Investment

$250

Security Type

Equity - Common

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Price Per Share

$1.00

Pre-Money Valuation

$40,039,870

Company & Team

Company

Year Founded
2010
Industry
Alcohol, Tobacco, & Recreational Drugs
Tech Sector
Non-Tech
Distribution Model
B2B/B2C
Margin
Medium
Capital Intensity
High
Location
Flagstaff, Arizona
Business Type
Growth
Company Website
Visit Website

Team

Employees
47
Prior Founder Exits?
No
Founder Name
Michael Marquess
Title
CEO, President, Chairman

Financials

as of Fiscal Year 2023
 Revenue +19% YoY
$9,939,896
 Monthly Burn
$525,000
 Runway
0.2 months
Gross Margin
43%

Summary Profit and Loss Statement

FY 2023 FY 2022

Revenue

$9,939,896

$8,385,643

COGS

$5,683,099

$4,774,817

Tax

$0

$0

 

 

Net Income

$-1,243,366

$-861,586

Summary Balance Sheet

FY 2023 FY 2022

Cash

$97,690

$254,761

Accounts Receivable

$0

$239,194

Total Assets

$4,156,844

$5,328,405

Short-Term Debt

$1,994,402

$1,739,177

Long-Term Debt

$3,974,279

$4,470,449

Total Liabilities

$5,968,681

$6,209,626

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Synopsis

Mother Road Brewing Company, based in Flagstaff, Arizona, is a craft brewery dedicated to brewing distinguished beers and fostering community connections. The brewery draws inspiration from the historic Route 66, which runs through its hometown, and aims to imbue the adventurous spirit of the iconic highway into its operations. The company serves a diverse clientele, including local patrons who visit their taprooms, as well as customers across three states through its distribution network. Approximately 30% of the company's revenue is generated from its taprooms, highlighting the importance of direct customer engagement in its business model.

The problem Mother Road Brewing Company addresses is the growing consumer demand for high-quality, locally crafted beers that offer unique flavors and experiences. Traditional mass-produced beers often lack the distinctiveness and local connection that many beer enthusiasts seek. Additionally, there is a need for community spaces where people can gather and enjoy these unique brews.

Mother Road Brewing Company's solution is to produce a variety of craft beers that stand out for their quality and distinctiveness. The brewery offers a range of beers that cater to different tastes, ensuring there is something for every beer lover. By operating taprooms, the company not only sells its products directly to consumers but also creates a welcoming environment where the community can come together. This dual approach of producing and directly selling craft beers addresses the demand for unique, high-quality beverages and the need for community-centric spaces.

Next Section: Price

Price

Mother Road Brewing Company is currently raising funds through a common equity offering on the StartEngine platform. The company has set a pre-money valuation of $40 million, with the price per share established at $1.00. Investors will be purchasing common equity, which provides them with ownership stakes in the company but does not offer the preferential treatment associated with preferred equity, such as liquidation preferences or dividends.

When investing in common equity, shareholders typically benefit from the company's growth and any eventual exit events, such as an acquisition or IPO. However, common equity holders are often last in line to receive payouts in the event of liquidation, behind debt holders and preferred equity investors. This structure can present both opportunities and risks, depending on the company's performance and exit strategy.

For Mother Road Brewing Company to provide a 10X return on investment, the company would need to achieve a valuation of approximately $400 million (not accounting for dilution). Given the current valuation of $40 million and annual revenue of nearly $10 million, this would require significant growth in both revenue and market presence. 

In the craft beer industry, successful exits often occur through acquisitions by larger beverage companies looking to diversify their portfolios with high-quality, niche brands. For Mother Road Brewing Company, an attractive exit scenario might involve being acquired by a major player in the beverage industry, which would likely require demonstrating strong brand recognition, consistent revenue growth, and a loyal customer base.

Next Section: Market

Market

Mother Road Brewing Company operates within the expansive U.S. beer market, which is valued at approximately $129.3 billion. The market is experiencing a very low growth rate of 0.91% annually, but craft beers are continuing to gain popularity among consumers. 

One significant trend impacting the market is the rising consumer interest in craft beers. Consumers are increasingly seeking distinctive flavors and artisanal brewing methods, which craft breweries like Mother Road Brewing Company are well-positioned to provide. This trend can positively impact the company's growth, as it aligns with the market's move towards more personalized and high-quality offerings.

Another important trend is the emphasis on local and community-oriented businesses. Consumers are showing a preference for supporting local breweries that contribute to their communities, both economically and socially. Mother Road Brewing Company's focus on building community connections through its taprooms and local distribution channels resonates with this trend, potentially enhancing its market appeal and customer loyalty.

However, the market also presents challenges. The craft beer segment is highly competitive, with numerous breweries vying for market share. This competitiveness requires continuous innovation and effective marketing strategies to maintain and grow the customer base. Additionally, any economic downturns or changes in consumer spending patterns could negatively affect discretionary spending on premium beverages like craft beer.

Next Section: Team

Team

Mother Road Brewing Company is led by a team of industry veterans who bring a wealth of experience and expertise to the table. The founder and CEO, Michael Marquess, founded the company over 14 years ago and has performed quite well in establishing a brand and growing revenue substantially. His leadership and vision have been instrumental in driving the company's growth and establishing its strong local presence. Marquess's deep understanding of the craft beer market and his commitment to quality and community are key assets for the company.

Peter Kruger serves as COO and previously worked for nearly 17 years as COO/Master Brewer at Bear Republic Brewing Company. He helped steer the company from a small local brewpub to a nationally distributed brand. 

And finally, Gordon Penberthy serves as Chief Sales Officer with nearly 30 years of sales experience at Hensley Beverage Company, where he served as NA Brand Manager of the company. Supporting Marquess is a team of 47 dedicated employees, including brewers, marketing professionals, and operational staff. 

Next Section: Differentiation

Differentiation

Mother Road Brewing Company operates in a highly competitive craft beer market, where differentiation is crucial for success. Key competitors include established brands such as Sierra Nevada Brewing Co. and New Belgium Brewing Company. Sierra Nevada, one of the pioneers in the craft beer industry, has a broad product range and a strong national presence. New Belgium, known for its flagship Fat Tire Amber Ale, also boasts significant market penetration and a diverse product lineup.

In comparison, Mother Road Brewing Company is smaller in scale but focuses on high-quality, locally crafted beers. While Sierra Nevada and New Belgium have extensive distribution networks and larger production capacities, Mother Road Brewing Company's strength lies in its local appeal and community-focused approach. The pricing of Mother Road's products is competitive within the craft beer segment, aiming to offer premium quality at accessible prices.

The customer demographics for Mother Road Brewing Company primarily include craft beer enthusiasts who value quality, unique flavors, and local production. These customers often range from young adults in their mid-20s to middle-aged individuals in their 40s and 50s. They tend to have higher disposable incomes and are willing to spend more on premium beverages. Additionally, these customers are typically community-oriented and prefer supporting local businesses that contribute to their local economy and culture.

Mother Road Brewing Company's differentiation strategy revolves around its strong local identity and community engagement. The brewery's taprooms serve as social hubs, fostering a sense of community and offering unique experiences that larger competitors may not provide. This focus on local connections and high-quality, distinctive beers helps Mother Road Brewing Company carve out a niche in the crowded craft beer market.

Next Section: Performance

Performance

Mother Road Brewing Company has demonstrated notable growth, with year-over-year revenue increasing from $8.4 million in the prior fiscal year to nearly $10 million in the most recent fiscal year, reflecting an 18.5% growth rate. This consistent revenue growth indicates a strong demand for the company's craft beers and effective market penetration strategies.

However, the company is currently operating at a loss, with a net income of -$1.2 million for the most recent fiscal year, compared to -$862k in the previous year. This increasing net loss highlights the challenges the company faces in achieving profitability despite its revenue growth.

Mother Road Brewing Company's financial metrics reveal a monthly burn rate of approximately $104k, with cash and cash equivalents totaling around $98k at the most recent fiscal year-end. This indicates that the company has less than a month's worth of cash on hand, which could pose liquidity challenges and necessitate additional funding to sustain operations and support growth initiatives.

The company's total assets at the end of the most recent fiscal year were valued at $4.2 million, with significant short-term debt of nearly $2 million and long-term debt of approximately $4 million. These debt levels underscore the importance of effective cash flow management and the need for strategic financial planning to ensure the company can meet its obligations while continuing to invest in growth opportunities.

Next Section: Risk

Risk

Investing in Mother Road Brewing Company carries several unique risks that potential investors should carefully consider. One significant risk factor is the company's financial health. Despite generating nearly $10 million in annual revenue, the company reported a net loss of $1.2 million for the most recent fiscal year. This continuing net loss indicates that the company has not yet achieved profitability, which could affect its ability to sustain operations and grow without additional funding.

Another important risk is the company's debt levels. Mother Road Brewing Company has substantial short-term and long-term debt, totaling nearly $6 million. This high debt load could limit the company's financial flexibility and ability to invest in growth initiatives. Servicing this debt could also impact cash flow, particularly if the company faces any downturns in revenue or unforeseen expenses.

The competitive landscape presents another risk. The craft beer market is extremely competitive, with numerous established and emerging players vying for market share. Mother Road Brewing Company's ability to differentiate itself and maintain a loyal customer base is critical for its long-term success. Failure to innovate or respond to market trends could result in losing customers to competitors.

Lastly, the company's reliance on taproom sales, which account for 30% of its revenue, introduces a concentration risk. Any disruptions to taproom operations, whether due to regulatory changes, economic downturns, or other factors, could significantly impact the company's revenue stream. 

Next Section: Bullish Outlook

Bullish Outlook

Mother Road Brewing Company has several positive factors that contribute to a bullish outlook. One of the primary drivers is the growing consumer preference for craft beers. The U.S. beer market, valued at $129.3 billion, offers significant opportunities for craft breweries that can differentiate themselves through quality and unique offerings. Mother Road Brewing Company's focus on high-quality, locally crafted beers caters well to this trend, positioning it to capitalize on increasing consumer demand.

The company's strong revenue growth is another positive indicator. With revenue increasing from $8.4 million to nearly $10 million year-over-year, reflecting an 18.5% growth rate, Mother Road Brewing Company has demonstrated its ability to capture market share and drive sales. This growth, coupled with the company's strategic expansion plans into new territories such as New Mexico and Southern Nevada, presents additional opportunities for revenue enhancement and market penetration.

Mother Road Brewing Company's commitment to community engagement and local identity serves as a unique strength. The brewery's taprooms not only generate 30% of its revenue but also act as social hubs that foster customer loyalty and brand recognition. This community-centric approach can differentiate the company from competitors and build a devoted customer base.

The leadership team, led by CEO Michael Marquess, brings extensive industry experience and a strong vision for the company's growth. The team's expertise in brewing and operations, combined with a focus on quality and community, aligns well with the company's goals and market trends. 

Emerging trends such as the increasing consumer interest in local and sustainable products further benefit Mother Road Brewing Company. The company's emphasis on local production and community involvement resonates well with these trends, enhancing its market appeal. Moreover, any product innovations or new offerings that align with consumer preferences could further drive growth and customer acquisition.

Next Section: Bearish Outlook

Bearish Outlook

Mother Road Brewing Company faces several challenges that contribute to a bearish outlook. One key concern is the intensely competitive craft beer market. The craft beer segment is saturated with numerous players, both established and emerging, making it difficult for any single brewery to capture significant market share. Companies like Sierra Nevada Brewing Co. and New Belgium Brewing Company have larger scales, broader distribution networks, and stronger brand recognition, which could pose significant barriers to Mother Road's growth.

Financially, the company has considerable debt, with short-term and long-term liabilities totaling nearly $6 million. This high level of debt could limit the company's financial flexibility and ability to invest in critical growth initiatives. Additionally, the company's cash on hand is relatively low at $98k, which might not be sufficient to cover its ongoing operational expenses, given a monthly burn rate of $104k.

From a competitive standpoint, Mother Road Brewing Company may struggle to differentiate itself sufficiently from other craft breweries. While its local community focus is a strength, it may not be enough to stand out in a crowded market where innovation and brand recognition are crucial. If the company fails to continually innovate and respond to market trends, it risks losing customers to competitors with more compelling offerings.

Another concern is the valuation of $40 million, which might appear high relative to the company's financial performance and market position. Investors may find the valuation less attractive, especially when considering the company's high debt levels and the competitive pressures it faces.

Lastly, while the current team has significant industry experience, there may be gaps in expertise needed for scaling operations and expanding the company's market presence. The absence of specialized skills in areas like digital marketing and supply chain management could impede Mother Road's ability to achieve its growth objectives.

Next Section: Executive Summary

Executive Summary

Mother Road Brewing Company is a craft brewery based in Flagstaff, Arizona, specializing in high-quality, locally crafted beers. The company aims to build community connections through its taprooms and distribution network across three states. Its primary customers are craft beer enthusiasts who value unique flavors and local production. The company is raising funds through a common equity offering at a pre-money valuation of $40 million, with shares priced at $1.00 each.

The U.S. beer market, valued at approximately $129.3 billion, is experiencing modest growth of 0.91% annually. Key market drivers include a growing consumer preference for craft beers and a trend towards supporting local businesses. These trends align well with Mother Road Brewing Company's focus on quality and community, presenting opportunities for growth. However, the competitive landscape remains challenging, requiring continuous innovation and effective market strategies.

Financially, Mother Road Brewing Company has shown strong revenue growth, increasing from $8.4 million to nearly $10 million year-over-year, reflecting an 18.5% growth rate. Despite this, the company reported a net loss of $1.2 million, highlighting the challenge of achieving profitability. The company has a monthly burn rate of $104k and cash on hand totaling $98k, indicating potential liquidity challenges.

Mother Road Brewing Company differentiates itself through its strong local identity and community-focused approach. Competitors like Sierra Nevada and New Belgium have larger scales and broader distribution, but Mother Road's local appeal and quality offerings set it apart. The target customer demographics include craft beer enthusiasts, typically aged 25-50, with higher disposable incomes and a preference for local products.

The leadership team, headed by CEO Michael Marquess, brings significant industry experience and a commitment to quality and community. However, as the company expands, additional expertise in scaling operations and digital marketing may be required to achieve future milestones.

Unique risks associated with this investment include the company's high debt levels, ongoing net losses, and the competitive nature of the craft beer market. The reliance on taproom sales also presents a concentration risk. On the positive side, the company's alignment with market trends towards craft and local beers, coupled with strong community engagement, offers growth potential. Conversely, the financial challenges and competitive pressures pose significant risks.

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Company Funding & Growth

Funding history

Total Prior Capital Raised
$1,653,242
VC Backed?
No
Close Date Platform Valuation Total Raised Security Type Status Reg Type
04/08/2025 StartEngine $41,106,607 $1,089,280 Equity - Common Active RegCF
01/06/2025 StartEngine $40,039,870 $1,033,874 Equity - Common Funded RegCF
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Growth Charts

Revenue History

Note: Revenue data points reflect the latest of either the most recent fiscal year's financials, or updated revenues directly from the founder, at each raise's close date.

Valuation History

Price per Share History

Note: Share prices shown in earlier rounds may not be indicative of any stock splits.

Employee History

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Mother Road Brewing Company on StartEngine 2024
Platform: StartEngine
Security Type: Equity - Common
Valuation: $40,039,870
Price per Share: $1.00

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