Mr Sherick’s Shakes has hit its crowdfunding target of £250k after giving away more equity to get over the line.
The premium milkshake brand, founded by ex-M&S buyer Andrew Sherick, initially offered 16.97% for £250k via the Crowdcube funding platform, valuing the business at £1.47m.
As the process neared its conclusion still short of the target, the business upped its equity offer to 23% of the business, cutting the valuation to £1.08m. The extra equity generated further investment of almost £100k and it is currently overfunding at £275k for 24.7% of the business.
“Once we’d gone down the crowdfunding route we needed to do everything we could to make it work,” Sherick said. “The valuation is always a matter of debate and discussion. We didn’t want to move forward at any cost, but you do need to strike the right balance.”
The investment would enable investment in an automated production process to reduce costs and increase listings with existing customers, including Waitrose, Harrods and Booths.
”You can’t underestimate the impact that will have on the business,” Sherick added. “We’ve been trading for 18 months so I think we’ve demonstrated there’s a demand for our product, but we started on very little in terms of capital and this gives us the ability to reinvest back into the business and brand.”
In its last financial year to September 2014, the company generated £61K of total sales, but it expects this to increase six-fold in the current financial year to £371k.
Last year the firm made a pre-tax loss of £125k and does not plan to move into profit until the 2016/2017 financial year on forecast revenues of over £3m.
“These targets are realistic and without taking on lots more customers, though I don’t underestimate the challenge in front of us to get us there,” Sherick explains.
“We would like to take on one or two customers this year and perhaps a couple next year, but we need to take baby steps at this stage and make sure we grow realistically as if we take on too much with limited infrastructure we would run the risk of undermining lots of good work”.
Mr Sherick’s has just signed a distribution deal with service station group Moto and will soon be available in Europe through its own-label partnership with M&S.
No comments yet