May 6, 2016 – Five days after beginning a crowdfunding campaign aimed at raising nearly two million dollars to start work on a new distillery in Kentucky, former Four Roses master distiller Jim Rutledge and his partners have suddenly ended the campaign and are issuing refunds. In a statement posted on the project’s web site late Friday, Rutledge described support for the campaign as “lackluster,” with contributions totaling around $11,000. During a Saturday telephone interview, he also acknowledged the criticism the crowdfunding campaign received on social media as another reason for ending the campaign.
“I heard a lot of the negativity toward the program, and people make assumptions right or wrong, but they’re assumptions and those are built on, but I don’t blame anybody but ourselves for not communicating effectively or efficiently why we were doing it and how we wanted to use those funds,” Rutledge said. While the proposal was based on using the nearly $2 million to be raised from the campaign to jump-start work on the project, including part of the cost of buying the site, Rutledge admits they failed to explain that the main goal was to fund construction with capital from private investors. The money donated through the campaign would have eventually been used to build a facility that could have been used by members of the distillery’s ambassador club and would have been dedicated to the original contributors.
“It would give contributors a way to say that ‘hey, I was a part of this from day one, I contributed, and I helped make it happen.'”
Listen to Mark Gillespie’s interview with Jim Rutledge:
“This does not impact whether we get the required capital raised for the distillery itself,” Rutledge said, noting that word of the crowdfunding campaign has helped attract interest from investor groups interested in becoming part of the project. “We don’t have 100 percent commitments from anybody, but we have one group that came to us offering $20 million or to fund the whole project, but nothing’s materialized with that yet…we’re talking to others as well, but we haven’t got a dollar in hand yet.”
The entire statement is presented here:
Friday May 6, 2016
Based on the lackluster performance of the Indiegogo crowd funding platform, the management team of the J. W. Rutledge Distillery LLC has decided to close the campaign. The people having contributed to the campaign will be refunded 100% of their contributions.
The main reason the Indiegogo campaign was initiated was to give people who enthusiastically support the J. W. Rutledge Distillery endeavor, but do not have the personal resources to invest for equity, an opportunity to be part of the distillery start-up efforts and making it happen.
Mistakes were made by the management team effectively communicating the purpose of the campaign, as well as the ongoing perks of the company’s ambassador club – “The JWRD Whiskey Alliance.” Members of the JWRD WA will receive quarterly newsletters to keep members apprised of distillery activities, including Special bottle releases, annual gatherings at the distillery, pre-purchases of Limited Edition releases, discounts for merchandise purchased at the gift shop – excluding beverage alcohol.
The “perks” program could have been handled a lot better as well.
The Indiegogo program was never meant to be a substitute for raising the required capital to bring the distillery project to fruition. The good news is a number of additional private investors and groups of private investors have come forward to express a passionate interest in investing in the JWRD, as a direct result of the Indiegogo campaign. Prior to launching Indiegogo the management group of JWRD were already in contact with agents representing three additional investor groups. Funding of the entire project looks very promising.
I wish to thank everyone for the support and overall very enthusiastic communications we’ve received since the announcement of the crowd funding efforts. We listened to all feedback, and we are taking action consistent with that feedback. We continue to welcome your input on what you, whiskey lovers and possible future JWRD Whiskey Alliance members want from a J. W. Rutledge Distillery.
For those who contributed to the campaign, in addition to the 100% refund, we will grant lifetime membership to the JWRD Whiskey Alliance, and when the distillery opens we will personally invite each of them, and their spouse or guest, to our grand opening ceremonies and party, to be held on the distillery grounds.
Thanks again to all for your very positive and passionate support of our distillery project.
Managing Partner and Master Distiller
J. W. Rutledge Distillery LLC
Rutledge noted in an interview for the April 30 episode of WhiskyCast that he had originally been reluctant to go along with a crowdfunding campaign to raise the initial capital for the distillery project, but changed his mind after discussions with his partners, Stephen Camisa and Jay Mowry. While overall response to the project on social media was positive, there was significant criticism of the crowdfunding campaign, such as this response to our interview with Rutledge.
Rutledge agreed that part of the problem in communicating their plans to potential contributors was their desire to keep the project under wraps until they were ready to announce it publicly, noting that the partners rushed through the process of building the web site and Indiegogo campaign without giving anyone else a chance to review the proposals and suggest changes that might have solved some of the concerns critics had raised.
“I don’t blame anybody but myself,” he said.
Editor’s note: This story was updated following an interview with Jim Rutledge.
Links: J.W. Rutledge Distillery