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Beer Bucks: Ironclad Brewery Pours Profits Into New Venture Capital Division

By Cece Nunn, posted Jul 5, 2018
Ironclad Brewery, a brewery/tap room and event venue in downtown Wilmington, has created Ironclad Ventures, a venture capital division as a way to make the most of its profits and diversify for existing investors. (Photo courtesy of Ironclad Brewery)
It's not all about the beer at Ironclad Brewery.

The brewery/tap room and regular host of events recently expanded into a new business segment: venture capital.

Ironclad Brewery, 115 N. 2nd St. in downtown Wilmington, has operated its brewery/tap room and event venue business since 2014, with 33 percent year-over-year revenue growth and projections for continued success, according to a news release. But instead of using its profits to build more breweries, tap rooms and/or event venues, Ironclad officials created Ironclad Ventures.

Ironclad Brewery CEO Ted Coughlin, who is also CEO of venture capital firm Coughlin Capital Corp. based in northern Virginia, said Thursday that the local and nationwide brewery business has exploded in recent years.

"It's a much more competitive environment than it was years ago," Coughlin said, explaining why it makes more sense in the current climate to roll Ironclad's profits into Ironclad Ventures so that the brewery's investors, which include some of Ironclad Brewery's employees, can make the most of their money. 
 
“I would not recommend this approach to others,” Coughlin said, because of the high risk. "You don't make one or two investments; you make several investments over time." 

Ironclad Ventures recently invested $50,000 in Petrics Inc., Coughlin said. Petrics is a pet health startup based in Wilmington that develops digital products and software related to pets, including a smart pet bed.

He said in the release that Ironclad's expansion into VC should help on two fronts: build wealth for Ironclad employees and investors and contribute to the growth and achievements of Wilmington’s startup community.  

"Some of our employees have invested in Ironclad, but creating wealth for people working in the service sector is a challenge,” Coughlin said in the release. “With Ironclad, I have seen firsthand the long hours people put in. ... Many have the qualification to work elsewhere but want to stay in Wilmington. Without enough sizable businesses, their opportunities to build wealth are limited.” 
 
Today, Ironclad shares are worth roughly $500 each, but Coughlin’s goal is to have each share valued at more than $5,000 by the end of 2023, the release stated. 
 
The brewery has promoted startups and entrepreneurs by hosting launch parties for companies and is also the regular host of events for the Network for Entrepreneurs in Wilmington (NEW) and Wilmington Angels for Local Entrepreneurs (WALE) meetings. Ironclad will continue to host those events, but also use WALE to vet investment opportunities, Coughlin said. A company seeking investment or an angel looking to invest should contact the WALE Coordinator Jim Roberts. 

Roberts said in an email Thursday that local angel and venture capital "is going to be crucial to the continuation of building the local startup ecosystem momentum that has been building since the spring of 2013."

Of Coughlin, Roberts wrote in the email, "Ted is an experienced investor as an angel and venture capitalist before he moved to Wilmington with experience in upstate New York and the Washington DC area. He has shown a higher tolerance for Angel investing even though he is not a native of Wilmington. Our entrepreneurs enjoy Ted’s optimism and willingness to help which is VERY refreshing in a conservative region. Ted is eager to create jobs in the region that pay above the average wages in New Hanover County. He knows there is good talent in the region and looking to create more local wins that will attract additional entrepreneurs."

Roberts said NEW's next event, which explores why local startups don't need to feel isolated on the coast because they can also connect to resources elsewhere in North Carolina, takes place July 26 at Ironclad
 
Coughlin said in the release, referring to his Virginia venture capital firm, “I have created wealth for many by following a simple recipe: brainstorming, discovery, researching and roadmap development, followed by detailed execution."

According to the release, this expertise has led his VC firm to success, with several investments in high-risk, pre-revenue startups.

“The exits, sale of the invested companies, result in huge returns and then we rinse and repeat,” Coughlin stated in the release.

Ironclad isn't the only local brewery to choose an unconventional route. In the case of Tidewater Brewing Co., the founders are working to create a cooperative brewery at 1002 Princess St. in Wilmington by offering $200 shares to participating customers.

Meanwhile, Ironclad hosted 150 events last year, and the impetus for Ironclad Ventures was boosted by Ironclad's event venue success, Coughlin said, noting that it "really, really took off. It's been great. It's nice when your expectations are exceeded."

Coughlin said in the release, “I work in a company that makes craft beer, hosts parties and makes investments. Life is good. The only thing better will be an exit party at Ironclad for a company we invested in.”

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