How B Corps like Persephone Brewing are Democratizing Fundraising


Ownership of privately-held companies is changing, and B Corps are at the front of the wave.

In the past, equity investment—the purchase of shares sold by a private company to raise capital—has been restricted. Only if you happen to be a “friend or family” at start-up or enjoy the net wealth to qualify you as an accredited investor did you have access to private equity investing opportunities. For an investor to be accredited, they have to have sufficient assets to be able to take a major financial hit if the company goes under (usually a net worth of at least $1 million). This isn’t meant to be exclusionary to people with lower incomes—it’s meant to protect them from bad investments that could be financially ruinous. But it means that a huge portion of the population doesn’t get a say in which companies get funded nor get to partake in the financial benefits of this type of investing.

These rules are changing, though, thanks to new regulations around equity crowdfunding. Rather than coming together to fund new gadgets through Kickstarter or charities through Crowdrise, non-accredited investors will be able to fund business ventures by buying equity shares through online crowdfunding portals such as Frontfundr and WeFunder. Unlike traditional equity investments, equity crowdfunding is accessible to much wider populations.

Companies of all kinds are beginning to pursue equity crowdfunding, including both early stage businesses and older companies. For Persephone Brewing Company, a three-year-old B Corporation in British Columbia, crowdfunding their third round of investment let them capitalize on the appeal of their positive impact and use their ownership to contribute to their social mission.

“We always had the idea of democratizing our ownership model,” said Brian Smith, Persephone’s co-founder and CEO. “Just like we knew we wanted to start an employee stock ownership program, we knew we wanted to bring in more local ownership.”

Persephone was first inspired by breweries in the UK who had found success with crowdfunding, and saw an opportunity to drive connection to their company through ownership. “We saw the real benefit in terms of investors’ engagement—not just their capital but their help to build a loyal customer base. That’s fostered its own momentum and its own opportunity,” Smith said. “What if we had a thousand owners? Not just loyal customers but ambassadors who would tell their families about Persephone Beer. I think this strategy to capitalize our growth doubles as a marketing strategy in terms of spreading our brand awareness and developing that owner-customer base.”

Beyond creating new evangelists for their company, exploring equity crowdfunding has also helped Persephone Beer tap into an investment market that most North American businesses haven’t even heard of. “Crowdsourced equity is much more mature in Europe than it is in North America; we’re on the front end of a pretty substantial investor wave,” Smith told us. Equity crowdfunding has only been possible in Canada and the USA for less than eighteen months. “Frontfundr is our partner here in BC. The regulations allowing for crowdfunded equity are only about a year old in Canada, so there aren’t a lot of players in the space who are using this to attract investors to businesses. ”

Persephone Beer has another advantage: their B Corp story. When law firm Drinker Biddle studied the first companies to start raising money through regulation crowdfunding in the USA, they saw that social enterprises were disproportionately represented. The most successful campaign so far in the USA belongs to a Pending B Corp and benefit corporation named BetaBionics.

“I definitely think there’s a big draw from being a B Corp,” Smith confirmed. “Being a B Corp is very indicative of the kind of company we are and helps us attract community investors.” For Smith, the principles that apply to values-driven consumers apply just as much to this new class of investors. “People who want to use their consumer dollars thoughtfully also want to use their investor dollars thoughtfully. Not surprising, but very encouraging,” he said. “70-80% of our investors are in that vein.”

With the lower price point that comes with equity crowdfunding, many more of those conscious consumers become potential investors. People can purchase shares through Persephone’s campaign on Frontfundr for only $250 dollars. “We wanted to popularize equity investing for folks who might otherwise have had to be accredited,” Smith said. “This is a company that’s growing fast. Our investors see opportunity in that, and it’s very accessible.”

Their investors also saw the opportunity to create positive impact. “For us, a big part of growth is not just making more beer but having more impact on our community,” Smith said. “Last year we were at about 15-20 employees, and next year we’ll be at 30ish. A proportion of our employees are people with disabilities. I think many of our investors and partners are thinking, ‘I’m in this for the impact, not just the financial returns, so let’s see if we can take that B Corp model to scale. Can we take it to 500 people affected by Persephone’s work?’”

Smith sees a future in equity crowdfunding for both B Corps—both to raise capital and to change the investment world. “It depends on the kind of business you are and the investor you’re looking for, but I think it’s worthwhile as part of the B Corp movement to popularize equity investing through crowdfunding,” he told us. “Equity crowdfunding helps people diversify their portfolios and become more savvy about where their money goes, so they can keep it local or keep it cause-based, and make it more thoughtful. If we’re saying you should be a more thoughtful consumer, you should be a more thoughtful investor too.”

Check out their campaign on their B Corp profile page. To learn more about their crowdfunding raise, their B Corp profile page. To learn more about Persephone Brewing, check out Frontfundr.