Thirsty Business & A Capital Injection

NZ drinks businesses are thirstier than ever for capital. Some thrive and achieve big targets, others crash and burn.

My thanks and appreciation for the founders and businesses who shared so openly and constructively for this story on the realities of capital raising for our thirsty drinks businesses. If you like this content or have questions, please leave a comment or send me a message.

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Capital promises solutions. The still that will finally let you scale production. The warehouse that will house ten years of maturing whisky. The marketing budget that will crack export markets. It promises to solve all the problems you’ve been white-knuckling your way through with cashflow and credit cards and sheer bloody-mindedness.

Sometimes it delivers. Sometimes it creates other problems, bigger than the ones it solved.

I’ve talked to lots of food & beverage founders about money. The ones who raised capital and learned hard lessons about governance. The ones who raised it brilliantly, some who crashed and burned, and the ones still untangling themselves from decisions made five years ago. Some who chose to go it alone. What’s that internet meme? Everything is hard, choose your hard.

Most know they want capital—who wouldn’t want a million dollars to make problems disappear?—but capital doesn’t make or break success. So I’m bringing you the stories behind some of the successful (and unsuccessful) raises of 2025.

Buckle Up, Buttercup - Before We Begin
Before you know whether you’re ready to sell, raise capital, or keep reinvesting profits, you need strategic clarity on what you’re actually building. Not what sounds good in a pitch deck. What you’re building, why you’re building it, and what success looks like when you get there.

Many raise capital without that clarity on why investment is the right path to the result. They’re raising because competitors did, because it feels like the next milestone, because the narrative of growth requires it. These are terrible reasons to take on investors.

So before you build that pitch deck or approach that platform or court those investors, answer this: Why are you actually seeking capital? Not “what would you do with it”—anyone can fill a spreadsheet with uses for money. But why? What breaks in your business without it? What accelerates with it? What changes fundamentally?

Why Distilleries Seek Investment (And When It Actually Makes Sense)

The spirits industry is brutally capital-intensive. Scaling production requires space, equipment, and working capital that most bootstrapped businesses can’t self-fund. Warehousing whisky that won’t generate revenue for a decade ties up hundreds of thousands in inventory.

But there’s a world of difference between raising capital to accelerate a working business model and raising capital to fix a broken one.

Legitimate reasons: You need infrastructure for scale after proving the model at small volume. You’re making whisky or aged spirits and need capital to build maturing inventory while cashflow comes from other products. You’ve proven product-market fit domestically and need capital to enter new markets with different distribution requirements.

Problematic reasons disguise themselves as legitimate ones. Raising capital to cover monthly operating losses means you have a business model problem, not a capital problem. Chasing revenue growth without margin improvement is expensive failure in slow motion. Raising capital to “fund expansion and growth” can also read as code for “figure out your business model”. Or asking investors to fund your education.

The fundamental test: if you can’t raise capital, does your business fail or just grow more slowly? If the answer is “fails,” you’re not ready to do anything but fix your business model.

The Market Reality: Buyers Are Divesting

Ten years ago, five years ago and as recently as last month, the conversation rolls like this: I’ll start, build, grow, invest, grow more, sell bigger, everybody makes a profit. But today that reads more like a South Park plan.

It was almost two decades ago that Geoff Ross sold 42 Below to Bacardi for US$91 million. The company had never turned a profit. Bacardi bought potential, story, swagger. Seventeen years later, 42 Below is all but a memory and Four Pillars Gin—three-time world’s best gin distillery with distribution in 25 countries and proven profitability—sold to Lion for AUD$50 million after a decade of relentless excellence. Swagger no longer sells. And it shouldn’t - whether to a big buyout or a small investor.

Another important story is happening in reverse. Campari Group announced in October 2024 that it would divest approximately 30 brands generating €220 million—roughly NZD $400 million—in annual revenue. Because they don’t deliver enough margin. Diageo launched its Diageo Luxury Group the same month, consolidating only brands retailing at $100 and above. They’ve been systematically divesting over the last 7 years—selling Seagram’s VO and other brands to Sazerac for $550 million in 2018. Yep, you read that right. Before the crunch came.

The big buyers aren’t buying how they used to. They’re pruning portfolios, cutting anything that doesn’t deliver premium pricing and exceptional margins at scale.

Even when acquisitions happen, it’s not a silver bullet. International Beverage acquired Cardrona Distillery in September 2023 with promises of global growth. The investors got liquidity, but changing market tides mean global expansion has been slow as International Beverage’s Scotch business wades through an industry-wide slowdown.

Even when you’ve got the plan, you can run out and keep asking for more. Scapegrace are currently (quietly) advertising for a investor visa opportunity. I asked them for comment on this story and their success, but they declined.

Most New Zealand distilleries chasing $5-30 million exits haven’t confronted the buyer’s market shift (weird, given how obsessed when it happens in property). Which means most distilleries need to build businesses that work without exits.

Pathway One: Equity Crowdfunding

Wills Cameron’s Remarkable Cream came to PledgeMe with 15,000 direct customers already generating real revenue. When their Keto range launched, they did $340,000 in sales in 30 days. The crowdfunding campaign came down to the final three hours before hitting its minimum target, but it worked because they weren’t asking strangers to believe in potential—they were inviting existing customers to own what they already loved.

Choosing the right platform mattered as much as having the right foundation. Wills initially approached both Snowball and PledgeMe.

“I did actually initially try and go to Snowball,” Will told me. “They were like, ‘Oh no, I don’t think you’re going to be able to get that valuation. And it’s really not a good time to raise, you should come back in a year and a half.’ And then I spoke to Anna from PledgeMe, and she’s just full of energy. She was like, ‘I reckon you can do it. This is a great story, and you’re in a great position and everything.’”

PledgeMe believed in what Remarkable Cream had already built. They weren’t asking Will to wait for better market conditions—they recognised the proof was already there for the platform, the product and the pitch.

The capital deployment strategy was precise and easy for investors to grasp: one-third to capex, two-thirds to growth and working capital. Not sexy equipment that photographs well for investor updates, but the unsexy essentials that keep a scaling business from choking on its own success.

“I’ve seen people in the beverage industry raise money, move into a big factory, and then all the staff are just sitting around,” Wills said. “They didn’t keep enough money aside for the growth.”

The crowdfunding model delivered something beyond money: 145+ shareholders who function as brand ambassadors, buying product, gifting it globally, making introductions. When you’re competing against established international brands, having hundreds of people championing your product creates competitive advantage.

Crowdfunding works when you have existing revenue (minimum $500k-$1M annually) and for Wills, that engaged audience of 10,000+ direct customers who actually buy, not just follow on Instagram. Your raise target needs to sit under $2M. You want brand ambassadors as much as capital. You’re comfortable with 400+ shareholders and the reporting requirements.

This won’t work when you’re pre-revenue, when you need more than $2M, when you want strategic investors bringing governance, when you can’t articulate exactly where every dollar goes, or when you’re not prepared for radical transparency. If platforms tell you to “come back later,” listen.

Watch for these red flags: your pitch centers on “if we just had capital, then we’d figure out the business model.” You don’t have product-market fit validated by actual sales. You’re hoping the campaign will “create buzz.” Your customer acquisition cost makes the economics unsustainable.

Pathway Two: Strategic Investors

Blair Nicholl at National Distillery Company went out for a capital raise and the market said no. Global economic slowdown, heavy US focus during uncertain times, and a valuation that didn’t match their investor type all contributed. They wanted strategic investors bringing governance and connections but the pricing model and service provider didn’t fit. The result was a crash and burn.

“We naively assumed that paying a large external firm meant they’d automatically ‘hook the fish,’” Blair admitted. “It was a huge learning curve.”

The pivot came quickly: a smaller internal raise among existing shareholders, forming a solid advisory group, role restructuring, and redirection to the domestic market. Most importantly, a shift from chasing top-line growth to focusing on gross profit. If you’re paying attention, you’ll begin to see a pattern.

“Growing without the right working capital turns into a race to the bottom where you compete on price instead of building a brand,” Blair said.

The failed raise forced the right question—do we need capital, or do we need a better business model?—and the answer turned out to be the latter. They started saying no, especially to new product releases. Strategic discipline looks like the painful “no, because...” of focus rather than the exciting “yes, and...” of expansion. You don’t get there by raising more money. You get there by not having the option.

Blair learned something crucial about investor selection: “We’re looking for the needle in the haystack—an investor who truly aligns with our vision, not just financially but strategically. It’s not just about capital anymore; it’s about governance, shared belief, and business synergy.”

This pathway works when you need significant capital ($2M+) that crowdfunding can’t deliver, when you want governance and strategic guidance alongside money, when you have a proven business model with clear path to profitability, and when your valuation matches the value-add you’re asking investors to provide.

It fails when your valuation is based on comparable tech startups rather than drinks businesses, when you’re chasing investors who won’t understand industry economics, when you’re seeking capital to “figure the next step out with their help” rather than scale what works, or when you want the money but not the governance or accountability.

Red flags: focusing on export expansion without proven domestic traction, emphasising growth rate without explaining margin, hiring an external firm that was inevitable a mismatch, optimising for a valuation number instead of building a sustainable business.

Pathway Three: Patient Capital for Long-Term Products

Patsy Bass at Reefton Distilling Co. has done multiple successful capital raises while thinking in decades rather than years. The model is familiar to many: gin provides cashflow while whisky matures, cask sales pre-fund future inventory, and capital raises fund infrastructure and scale.

“We articulated our vision clearly since we launched the first capital raise,” Patsy told me. “Our shareholders invested in that vision, in me as Founder and the team we have.”

But articulating the vision was only part of it. Choosing the right partners to execute that vision mattered just as much. “It is all about relationships; about the right people,” Patsy said. “We have a strong relationship with our raise partners and the process is relatively smooth now.”

That relationship building wasn’t accidental. Reefton has worked with boutique investment bank Arcbridge Partners as a raise partner (they also wrangled the Cardrona deal). They’ve also used Snowball Effect for broader retail investor engagement. The key was finding partners who understood the long-term nature of whisky production and believed in the regional economic development story as much as the financial returns.

Trust comes from radical transparency. When global gin markets crashed and recession hit, Patsy didn’t hide it. She explained the pivots, the cost cuts, the hard decisions. They operate on a “no surprises” approach. When you’re asking people to invest in a product that won’t reach its peak for a decade, trust becomes the only currency that matters.

The result: 800+ shareholders who visit the distillery, gift products globally, make introductions, and wear Reefton t-shirts around the world.

The real sophistication shows up in governance. Patsy built a board with the right mix of skills, experience, and personality, then started exploring a COO or GM role to handle operations while she focuses on her strengths.

“One of our early advisors said the entrepreneur with the vision is not typically the right person to run a business once it gets past those first early years,” Patsy said. “And I agree.”

“Once our whisky is ready for market in greater volumes, we won’t need to raise capital to support production,” Patsy noted. The strategy is capital to reach sustainability, not capital as a substitute for sustainability.

This succeeds when you have long-term products requiring patient capital, when you’ve built trust through consistent communication, when you have near-term cashflow generators funding operations while inventory matures, and when you’re comfortable with evolving governance.

It fails when you can’t articulate a clear long-term vision, when you’re not prepared for radical transparency, when you lack cashflow generators and need capital to cover operating expenses, or when you’re working with raise partners who don’t understand your business model or timeline.

Cashflow vs. Capital: The Critical Distinction

It’s easy for distillery founders conflate cashflow management with capital investment. They’re fundamentally different.

Cashflow pays staff, covers rent, buys ingredients, funds marketing. You generate it from sales and manage it by controlling the timing of money in and money out.

Capital funds equipment, builds infrastructure, creates inventory that won’t generate revenue for years, and scales operations.

Reefton’s model demonstrates this clearly. Gin production generates cashflow: product ready quickly, revenue within months, funds ongoing operations. Cask sales create a hybrid: pre-selling future whisky inventory at a discount, generating near-term cashflow while building long-term asset value. Capital raises provide true investment: funding for stills, warehouses, land expansion.

The mistake some make is raising capital thinking it will solve cashflow problems. It won’t. Capital has to fund the long-term. You need revenue-generating products to keep the lights on while your premium inventory matures.

Wills Cameron at Remarkable Cream demonstrates a different version—they’re scaling a proven cashflow-positive model. Their capital went to infrastructure and working capital for scaling, not to funding operating losses.

Blair Nicholl learned this through failure: “Growing without the right working capital turns into a race to the bottom.” They needed to fix their business model, not just inject more capital to cover losses.

Does your business generate positive cashflow from current operations, or are you funding losses? If you’re building aged inventory, what generates cashflow while that inventory matures? Are you raising capital to fund growth or to cover operational shortfalls? Can you time your brand launch to minimise operating costs while maturing and realise the big cash investments upfront?

Raising capital to cover operating losses without a clear path to positive cashflow isn’t fundraising—it’s buying time before failure.

Strategic Alignment Matters More Than Valuation

Before choosing your pathway, work through these questions honestly.

How much revenue do you generate, how consistently, and how profitably? Can you acquire customers at a cost that makes economic sense? Does each sale contribute to covering fixed costs? Without this proof, you’re not ready to raise capital—you’re ready to validate your business model with minimal investment.

What problem does capital actually solve? Scaling a proven model suggests considering all pathways based on amount needed. Building infrastructure for future revenue points toward strategic investors or multiple raises. Funding operating losses means stopping to fix the model first.

How much control are you willing to trade? None? Crowdfunding or friends and family, but accept limited capital and many shareholders. Some? Strategic investors, but accept governance and accountability. Significant? Institutional investors, but accept pressure for exit or returns.

What’s your realistic timeline to profitability? If it’s 12-24 months, bank debt might be cheaper than equity. If it’s 2-5 years, you need strategic investors who understand the model. If it’s 5-10 years, you need patient capital from people who believe in the long game. If it’s unknown, you’re not ready to raise capital.

The Auld Distillery story becomes a cautionary tale here. Auld took on shareholders who, according to Companies Office records, quietly exited the business just two years later. That’s not a normal investment timeline for a distillery—it’s strategic misalignment. When investors exit quietly and quickly, they didn’t understand the business model or timeline, they expected different returns, they weren’t prepared for spirits industry economics, or the founder and investors had fundamentally different visions.

Strategic alignment isn’t about finding investors prepared to give you money. It’s about finding investors who understand your industry’s economics and timelines, share your vision for what the business should become, are prepared for the actual journey rather than an idealised version, and will be there for the long haul—or at least won’t destabilise the business when they exit.

Ask potential investors: What’s your typical investment timeline? What exits have you made from similar businesses, and what triggered them? What would cause you to want to exit this investment early? How do you define success for this investment? What happens if we don’t hit projected milestones but the business is still viable?

If their answers don’t align with your vision and timeline, keep looking. The wrong investors are worse than no investors.

What happens if you can’t raise capital? If the business fails, your model is broken and capital won’t fix it. If growth slows, you have a sustainable business and capital is optional acceleration.

What Actually Matters

Build revenue before you build the pitch deck—proof, not projection.
Choose partners who believe in what you’ve already built.
Match your valuation to your investor type.
Be radically transparent. When things go wrong, tell people. When hard decisions come, explain why.
Know exactly where every dollar goes.

A serious business leader knows how to spend other people’s money well. It starts with ensuring strategic alignment with investors, but how exactly should you do that?

From inside the process, here’s my advice and backed up by the stories above. You need to ask the hard questions about investor timelines, expectations, and definitions of success before taking their money. And listen to what people tell you.
You may not have your governance gold wings, but understand that good governance is your best competitive advantage. The businesses surviving downturns have smart people around the table who help founders see blind spots before those blind spots become crises. Be sure all all times, you are distinguishing between cashflow and capital. You’ll regret sinking the capital that was going to propel you forward on everyday operating costs. Profitability and margin are not optional in the current climate—even if when you started, sustained losses were okay with the accountant. Profit is the only reliable long-term strategy.

Investment Isn’t The Success

Securing capital—regardless of amount or source—is just a transaction. The question that matters is simpler: what do you actually want this business to do?

Maybe you’re building for local employment, like Reefton creating jobs on the West Coast where they’re desperately needed. Maybe you’re building for sustainable work you enjoy, like Blair. Maybe you’re building quality products that reflect craft and place and family legacy. Or maybe you’re genuinely building for global scale. That’s legitimate. But understand what that path requires: Four Pillars spent a decade becoming genuinely world-class before their exit. You need to run a good business to grow or sell one. You don’t become a better business operator once you have more money (or more production) in the bank.

Capital has gravity. Once you take it, your business bends toward the expectations that came with it.

Wills Cameron told me something that cuts through the noise: “I’d rather turn a profit and grow slowly than chase capital and hope the growth covers the cost.”

The Counter-Argument: Choosing Not To Raise At All

Rachael Thomson at Thomson Whisky took a different path entirely. She and Mat chose to grow organically, reinvesting profits back into production rather than taking on external investors. They kept their day jobs until the business turned a profit—literally didn’t take a wage for years.

“Those years were hard and home felt like a train station with all the comings and goings between jobs,” Rachael told me. “I had 2 girls under 4 years old and the business was growing at like 70% at that time, so I was averaging about 5 hours sleep a night between breastfeeding, home life and working. I was selling whisky over the phone, doing the accounts, brand work, and also dispatching whisky orders from home.”

She describes putting the baby in the pushchair with cases of whisky in the compartment below, wheeling them down the long driveway to the courier box for pickup. “Looking back I sound like a character from a Roald Dahl book,” she said.

The sacrifice was brutal. “You do everything you need to do without reasonable limits, and the business takes from you what it needs, not the other way around. But if you want something others don’t have, you have to be prepared to do things others aren’t.”

The benefits of remaining family-owned? “You make decisions that will benefit your family long term. You have everyone’s futures clearly in your sights and you want to see your family succeed and thrive, and the distillery gives you possibilities for that. It becomes an enabler and a source of real pride. And when you look back it’s hugely satisfying that you’ve created it. You took the risk, got off the bleachers, and ran the race, instead of being a bystander. It gives you purpose.”

Rachael isn’t against investment as a concept. “Taking investment in a company is not a bad thing at all, and it’s certainly a really smart option for many models. Capital is king as they say, but nothing comes for free. It shouldn’t be jumped into without careful consideration, and extrapolating out in your mind where it will lead over years.”

Her observation about the New Zealand market is sharp: “There’s a tendency for small NZ brands to under value their businesses and go for investment too early. They let go of too much of their shareholding before they’ve solved some fundamental business issues that sets them up for growth—and at times end up going for multiple rounds of investment and losing more share.”

Her advice: “You have to ask yourself what your end game is, what do you want to be or do within the biz long term, and who do you want along side you. Every business owner will have a different version of what ‘success’ looks like for them and it’s good to be honest about it, and go after your version of success, not the cookie cutter model.”

Thomson Whisky now has international recognition, awards, distribution in Australia and Europe, and a sustainable business that supports two households. They got there by selling bottles to make more whisky, reinvesting profits, and building slowly enough that they never had to compromise on what they were creating or who they were creating it with.

It’s a valid path. Maybe the most valid one for distilleries that can generate enough revenue to fund their own growth. Because the business remains entirely theirs to shape, grow, and eventually pass on—or not—as they choose.

Choose Your Hard. Choose What Success Looks Like.

Right now you have possibly already thought how another $100,000 in capital could solve problems for you. Maybe three or four times over. But have you considered what success actually looks like for your distillery? Seeing your product in 25 countries, or knowing the people who work for you have stable jobs? Selling for eight figures, or waking up each day doing work you enjoy in a business that pays you well?

The spirits industry has spent two decades telling founders that the only success that matters is scale and exit. But in 2025, when buyers are divesting more than acquiring, when exits rarely transform businesses, and when building acquisition-worthy businesses requires a decade of world-class execution, success needs a more honest definition.

Maybe success is building a distillery that does exactly what you want it to do. Know which one you’re building. Be honest with yourself, your investors, your team. The capital you raise and how you raise it should serve that specific version of success—not distort it, not replace it, and certainly not become the goal itself.

Before you build that pitch deck, ask yourself: if this business never exits, never scales beyond regional distribution, never makes you wealthy—but it employs good people, makes products you’re proud of, pays you a decent living, and lets you do meaningful work—would that be enough?

If the answer is yes, build that business. Raise capital to support it if needed, but never let capital requirements distort what you’re building. Or follow Rachael’s path: reinvest profits, grow sustainably, maintain complete control over your vision.

If the answer is no—if you genuinely want global scale and eventual exit—understand the path is brutal, long, and requires a decade of world-class execution with no guarantees.