Bootstrapping Backwoods Brew

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Bootstrapping Backwoods Brew
Paul and Jesse threw their backpacks on empty seats as the train left the New Brunswick, NJ train station. They were headed to their internships at a real estate accounting firm a few towns down the line. Pulling their tickets out of their wallets, they grabbed seats across the aisle from each other. The two university undergraduates had met in an accounting class several semesters ago, but they became closer friends as they shared the train ride back and forth to work twice a week. During these train trips, during lunch breaks, and at school after classes they often discussed their long-term goals and aspirations. Paul, noted, “We would always talk about starting our own business.” They both wanted an independent lifestyle and they felt that starting their own firm was the vehicle that would get them there. As Jesse stated, their goal was to “not have to work for the man.”

Table 1: Backwoods Brew Event Timeline
|YEAR (approx.) |EVENT | |1993-1994 |Idea for beer company surfaced | |1994-1995 |Regulation research (e.g., licensing requirements, state sales tax regulations) | | |Product development | | |Market testing | |March 1995 |Incorporation | |Late 1997 |Granted State and Federal beer distribution licenses | |April 1998 |First sale – kegs in local bar (Angel Brewing, Desiderata Distribution, & internal sales) | |September 1998 |Growlers on retail shelves (Angel Brewing, internal sales & distribution) | | |Terms of partnership renegotiated | |January 1999 |New investor comes on-board | |February 1999 |Six-pack on retail shelves; Local Brewing takes over production (internal sales & distribution) | |November 1999 |Desiderata takes over retail sales & distribution |

They agreed that the ideal situation would be for them to own their own beer company. “TV pictures of an outdoorsy-looking Pete Coors against a backdrop of the snow covered Rockies made the pair envious of what they thought was the best job in the world” (Epps, 1999). Paul recalled, “it just started off as a joke, [while we were both accounting] interns, to start a beer company. We thought it would be cool.” At that time—the mid 1990’s—the micro-brewing industry was growing rapidly, and people were interested in drinking more robust, flavorful product than the traditional mild-tasting beers produced by Budweiser, Coors and Miller. Yet competition was still somewhat limited. Observed Paul, “at that time there were not so many micro brews on the scene. There were a few micro brews, but they weren’t as well known as they are today [in 2001].” Somehow, what started as a bit of a joke, began to get more serious. The partners started gathering the basic information that they needed to start a beer company, from the incorporation process in their home state, to the state and federal regulations that applied to the...
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