Just north of Prescott’s historic downtown Courthouse Plaza sits Arizona’s newest brewery.
Granite Mountain Brewing Company opened its doors about a month ago.
The room smells of fresh hops and barley.
Just behind the large, hand-carved wooden bar is the brewery’s three-barrel brewing equipment.
If starting a new business during a recession seems a bit risky, it didn’t stop this brewery’s owners.
In fact, they saw some advantages.
Amanda Richardson and Michael Stanger are two of the brewery’s co-founders:
“During recessions can be a good time for small businesses, Richardson said. "Sure sometimes it’s hard to secure loans from a bank, but there’s a lot of places that are empty and you’ve got a lot of choices for location.”
“Plus if you can do it and get a solid foothold, once the rebound happens you’re even better," Stanger added.
They joined with their friends Damon Swafford and Audra Yamamoto, pooled their savings, and got some money from family.
But they were still a little short of their goal.
So they turned to Kickstarter.
Kickstarter is a web-based organization that helps people fund their projects with money from other people who think the project is a great idea.
It’s called crowdfunding.
On March 3, Granite Mountain Brewing’s Kickstarter page went live.
A month later, 242 backers had pledged more than $18,000.
That’s more than the brewery’s goal.
In exchange, each donor received a gift ranging from a Granite Mountain Brewing Company sticker and a hand-written "thank you" for a $10 pledge to private party for up to 30 for a pledge of over $3,000.
Everyone who donated got their name on a tile the mosaic that is on the brewery’s back wall.
Thanks to Kickstarter, the owners of the brewery didn’t even consider traditional business loans or investors.
“Crowdsourcing is really just getting off the ground. It’s been around for a little while, but it’s really starting to hit stride a little bit," said Professor Mark Chapin, an economics professor at Northern Arizona University.
He also chairs Northern Arizona Center for Entrepreneurship and Technology.
“I think it’s going to depend on the amount of capital these start-ups need to raise and the ongoing willingness of the public to offer up some small amount of cash to help them get started," he added.
It wasn’t just the Prescott community that made Granite Mountain Brewing’s Kickstarter campaign a success.
They also got backing of beer fans from around the state.
“I saw their Kickstarter page, it got posted up on Facebook, so I checked them out," said Matt Klein. He’s an avid homebrewer from Chandler and one of the project’s backers.
“I liked their image," Klein said. "They were homebrewers that got together and said ‘Hey, Prescott needs another brewery,’ and so they decided to jump on it. As a homebrewer, that’s kind of one of my dreams as well.”
But most of Kickstarter’s proposed projects do not get off the ground.
Kickstarter denies about one-third of the projects before they even get to build their web page.
And over half of the projects that do get to build a page don’t get funded.
Brewery co-founders Richardson and Stanger.
“The process to get approved is not easy, not easy at all," Richardson said.
“We were rejected the first time," Stanger admitted. "The second time around we had to reword everything and took a different tactic.”
One thing that helped was that they knew that they already have a core group of customers…their investors.
“Leading into opening a business you have 250 people who are essentially emotionally invested in your business," Richardson said. "They’re really excited, eager and waiting for you to open.”
That means getting funding can be more like advertising than pitching a business plan to investors.
And economics professor Chapin says that can be a downside to operations like Kickstarter.
He says a new business can often use the insight and connections banks and private investors can offer.
“One of the things that we’ve found is that they also benefit greatly from having access to business expertise, to various service providers that can help go over a business plan, work with them on marketing and intellectual property protection and all those sorts of things," Chapin said.
He encourages anyone taking part on either side of crowdsourcing to make sure that they are paying attention to the business side too.
