I was looking at the website for a brewpub nearby that has really good food. They had a button that asked for investors in the brewery, so I clicked on it. The short description is that they want to improve the patio and add some equipment, and they’ll pay 13% over 5 years. It’s a loan rather than equity. I decided to read the prospectus. Any restaurant investment is risky of course, but this one seems very poor. They had a huge increase in revenue in 2022, but produced a huge loss. They have high interest debt to a few parties, plus a big SBA loan that isn’t at a bad rate. Seems they are already borrowing for working capital, and a decent chunk of this offering is actually for working capital. I understand that opening this place in the pandemic ate some of their working capital, but looks like bottom line is worse post pandemic and they are increasing borrowing at high interest rates.
I like these guys and will patronize them more as it seems they need the business, but no chance on a loan from me. I’m guessing most of the “investors” like the place and either didn’t bother to read the prospectus or don’t understand looking at financial statements.