Funding a gin brand: what investors look for

Know what the money is for

Funding needs differ. Start-up capital buys equipment, premises work and first stock. Working capital bridges the gap between paying suppliers and being paid by customers. Growth capital pays for new capacity, new markets or a second product.

State the amount, the use and what it will change. "We need money to grow" is not a request. "We need this amount to fund a second still and the stock it will produce, backed by this cash flow" is.

The routes

Common routes include your own savings, family and friends, bank loans, equipment finance, grants or schemes where they exist, angel investors and pre-sales to the trade. Each has costs and conditions. Rules on raising money from the public differ by country, so take legal advice before you offer shares to anyone.

Do not assume any route is open to you. Nobody can promise a loan or an investment. Neither can we. What you can do is make it easy for someone to say yes.

What investors and lenders check

They tend to look at the same things:

• The team: who runs production, sales and finance and what they have done.
• The product: a clear gin, proven in trial, with a defined style.
• Unit economics: cost per bottle, price, margin and what is left after the trade takes its share.
• The route to market: who buys, through which channel and with what evidence of demand.
• Cash and risk: how much is needed, when it runs out and what could go wrong.
• Licences: the status and the plan.

Our guides on the cost of a bottle and pricing cover the unit economics.

Show traction without inflating it

Real evidence helps: trade accounts, reorders, pre-orders, tasting feedback and trial sales. Present exactly what you have. A sceptical investor will check. One inflated number can cast doubt on all the others.

If you are pre-launch, show what you tested. Buyer conversations, a trade sample round and a trial batch are all useful. See market research before launching a gin.

The numbers pack

Prepare a financial model with monthly cash flow for at least two years and yearly projections beyond. Include break-even and payback. For investors add NPV and IRR with the assumptions stated. Add sensitivity cases: sales slower, costs higher, licence delayed.

A hypothetical illustration: a project that needs 100 and returns 25 a year in cash has a simple payback of four years. Investors will ask why you believe the 25. Be ready with the chain of reasoning, from bottles sold to price to cost. Our business plan guide lists the sections.

Protect your position

Do not give away more than you need. Understand what any loan requires as security and what an investor expects in control, reporting and exit. Get legal advice on documents. Keep your records clean from the start, because due diligence will test them.

Timing and a checklist before you ask

Raising money takes longer than most founders plan for. Preparing documents, answering questions and waiting for decisions all take time. Licences often have to be in place first. Start well before the cash runs low. A founder who asks for money with two weeks of cash left negotiates from weakness.

Keep a list of conversations and what each person asked. Their questions show you where your plan is thin. Fix those points and the next conversation goes better.

Before the first meeting, check that you have:

• A one-page summary a stranger can follow.
• A cash flow with the assumptions written beside it.
• Quotations for the major costs.
• The licence position and the plan to complete it.
• A clear request: how much, for what and on what terms.
• Answers to the three obvious worries: what if sales are slow, what if costs rise, what if the licence is late.

If you can answer those calmly, you are ready.

Using this guide and where we help

Funding sits at the end of the chain of decisions in this series. Your route to production comes from distil it yourself or contract it. Your market evidence comes from research. Your costs and price come from the cost and pricing sums. Put them together in the plan and the investor will see a business, not a hope. For overseas companies who want to fund a launch in India, see launching a spirits brand in India from abroad.

We prepare detailed project reports, business plans and investor packs, led by Ankur Napa. The work can be done remotely by video call and shared data, with site visits by arrangement. We do not promise funding.

Common questions

How much money do I need to start a gin brand?

It depends on whether you contract or distil, your volume and your market. Build it from your own quotes.

Do investors fund gin brands?

Some do, when the team, margins and route to market convince them. No one can promise it.

Should I get a loan or an investor?

A loan keeps ownership and needs repayment. An investor shares risk and takes a stake. Compare both against your cash flow and take advice.

What do lenders ask for first?

Usually a business plan or project report, a cash flow and evidence of licences and quotations.