Brewdog: Comment from UK Crowdfunding Association

The UK Crowdfunding Association represents members that crowdfund responsibly, supporting a proportionate balance between access to finance and investor protection. We have actively participated in the Financial Conduct Authority’s development of regulations relating to crowdfunding platforms, and all members that raise equity finance are authorised and regulated by the FCA. As a result, those platforms must comply with rules to ensure that all promotions of investment opportunities are fair, clear and not misleading, and that investors are FCA-categorised, screened for appropriateness, and presented with relevant risk warnings before they invest.

On 22 April, Brewdog launched “Equity for Punks IV”, its fourth crowdfunding campaign to raise funds from it supporters in exchange for shares in its business. Due to the size of Brewdog’s raise, it was required to produce a prospectus, although its shares are not listed on a public market. However, because Brewdog is not authorised or regulated by the FCA (and is therefore not a member of the UK Crowdfunding Association), it is not subject to the rules referred to above. On 27 April, Brewdog admitted mistakes in its communications – including the fact that it had wrongly described the offer as a “UKLA accredited investment scheme”, that a statement about an increase in value was unverified, and that the offer was not open to every country in Europe as previously stated. Unlike FCA-authorised crowdfunding platforms, anyone can invest on Brewdog’s platform without needing to be categorised or pass an appropriateness test.

The UK Crowdfunding Association exists to support and promote crowdfunding, which includes giving businesses the opportunity to use platforms to source finance from their fans, friends and other investors. However, we believe that this should be conducted by FCA-authorised crowdfunding platforms, which are subject to uniform standards of disclosure, transparency and treating customers fairly. Investors can then be assured they are receiving clear and correct information that has been approved by the platform, and that the appropriateness of the investment has been considered. We will be engaging with the FCA in this regard, but in the meantime urge investors to consider the regulatory status of a platform before making an investment.