What is Shadow Grove Brewing?
Shadow Grove brewing will be a retail-sales-targeted brewery and taproom located in Downtown San Fernando with a focus on customer experience and great craft beers.
What types of beer do you plan to serve?
Our focus will center around many easy-drinking, session styles in a variety of categories. Additionally, we will carry several higher ABV double and imperial versions, reflecting their lighter counterparts.
What’s this about customer experience?
We believe that the traditional craft brewing taproom almost always lacks an aesthetic focus and atmosphere core to the brand; we intend to change that. Our taproom will feature a decorative theme tying into the Shadow Grove brand that will set us apart from the competition. Additionally, we will be the first in Los Angeles to provide a professional steel-tip darts playing experience with a raised playing area.
When do you plan to open?
As of September 27th, the California ABC approved us to begin construction at our building located at 1116 2nd Street. We are expecting construction to be completed by the end of the year and our TTB Brewer's noticed obtained by the end of February. We are shooting for a grand opening on Friday May 1st, 2020.
When do you need the money by?
Membership interest payments will be due by Friday November 29th, 2019.
How much money are the founders contributing and how much of the company do they own?
Both founders will be contributing a total of $42,000 of their own money, earning each of them 3.5% equity through a pre-sale of membership interests (35 each). In addition, each founder also owns 41.5% of the company in the form of sweat equity that was vested at the time of formation. The total amount of ownership in the company by founders is 90%
How much will the founders be making in salary?
During the initial repayment period (7 years), founder salaries will be capped at $65,000 per year in order to maximize profits and dividend payouts. However, founding members will receive annual dividend payments relative to their ownership percentage.
What happens to my money if you don’t reach your investment goal?
Similar to crowdfunding, we have a minimum investment threshold that will allow us to keep contributions even if we do not raise our total goal. That amount is $15,000 and does not include founder contributions. If our minimum funding goal is not met, all investments will be refunded within 14 business days.
Do I have to pay taxes on dividend payments?
Because of our status as an LLC, dividend payments are considered as pass-through income and taxes must be made by each member receiving a dividend.
Will I have voting rights in the company?
Non-voting members will not carry voting rights in the company and will be considered a non-managing member of the LLC
Is this legal?
Yes, under securities exemption D, Rule 504, a company can raise up to $5,000,000 in any 12 month period of time from any type of investor (accredited or non-accredited). We will be filing the exemption within 14 days of our first membership interest sale.
What is a repurchase clause and how does it work?
A repurchase clause simply states that once total dividend payouts exceed a 300% return on your original investment, the founders can initiate the repurchase of equity from a non-managing member. The repurchase amount is subject to a third-party company valuation and will be paid out by percentage of ownership according to that valuation.
Example: A member that owns a single interest originally purchased for $600 can have their interest repurchased once they have received over $1,800 in dividend payouts. If the company is valued then at $1,000,000, that members 0.1% member interest would then be worth and bought for $1,000 in addition to the dividend payments that had already been made giving them a grand total payout of $2,800 for a $600 investment.
The repurchase agreement is not automatic and will be ratified solely at the discretion of the board
What happens to my money if you fail or otherwise close for business?
In the event that we dissolve the LLC for any reason, our capital assets will be liquidated, any outstanding debts paid, and the remaining funds distributed to all interest owning members based on their ownership percentage. While your entire investment is not directly backed by an asset it can be comforting to know that there could be some return on your investment in the event of dissolution. The current resale rates for used brewing equipment is upwards of 80% of the original purchase price:
For anyone that would like invest or to see the full details: a copy of our business plan and subscription agreement, please fill out the form below to request access.