'When we asked for a £150,000 loan our bank basically just laughed at us' - BrewDog's James Watt

HOW I BEAT THE ODDS: The co-founder of craft brewer BrewDog on crowdfunding and not compromising.

by Adam Gale
Last Updated: 06 Apr 2016

Before BrewDog, I was working on a fishing boat in the North Atlantic. A lot of my thoughts on leadership and the punk mind-set were forged during that time: you need to roll up your sleeves and learn the skills you need to be self-sufficient. I wasn't much of a beer drinker back then, but one day I picked up a bottle of Sierra Nevada Pale Ale and it changed my life. I took one sip and said, 'What the hell's this?' It just blew me away how hoppy it was.

I tried to copy Sierra Nevada in my garage. Those first batches left a lot to be desired, but it soon became a hobby for me and my friend Martin Dickie. In 2006, we had the opportunity to meet the legendary beer expert (not the pop star) Michael Jackson. He tasted our beer and told us to quit our day jobs and start brewing full time, so we thought what the hell, let's do it.

With a £20,000 bank loan, we bought a second-hand stainless steel tank, leased a dilapidated industrial building and got to work. Most of the next year was spent going from bar to bar up in the north-east of Scotland, struggling to sell a few cases of beer a week from the boot of my car. We both had to move back into our parents' houses to make ends meet.

Things changed in early 2008, when we entered a Tesco beer competition and finished first, second, third and fourth. I went down to its HQ in Cheshunt and sat there with my best poker face as they told me how they wanted to roll-out our beers nationwide and would order 2,000 cases a week. I didn't mention the fact we were just two guys (and one dog) filling bottles by hand. I said, 'Amazing, let's do this,' and then had four months to figure out how the hell we'd supply them.

First, we went to our bank and asked for a £150,000 loan for a small bottling line and some additional tanks. As the global economy was in a tailspin and we weren't paying our existing small loan back, they basically just laughed at us. There was no way they or any other bank would lend to us, they said.

Undeterred, I walked across the street to a competing bank and told them about the Tesco deal, about how despite our size we'd be an epic long-term partner to them and, most importantly, about how our current bank had just offered us this amazing loan deal. If they could match it, I said, we'd switch all our banking to them. And they did. That white lie got us the equipment we needed. The first bottles rolled off the line three days before we were due to deliver them to the supermarket.

We grew rapidly after that, and now employ over 450 people. Our turnover will be over £50m this year, and we'll export our beer to 55 countries. We did have difficulty getting the funds to maintain that expansion, though, which is why we came up with Equity for Punks crowdfunding. It meant our company would always be owned by people as passionate about good beer as we are, so we wouldn't have to compromise on our values.

Business for Punks: Break All the Rules – the BrewDog Way by James Watt is published by Portfolio Penguin at £14.99, on 5 November 2015

Read MT's interview with James Watt, about his favourite publicity stunts, the virtues of crowdfunding and why he'll never sell to a big brewer.

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