This story was updated at 12:13 p.m. on Saturday, Jan. 18, 2020, to remove a quote from Luke Arterburn that referenced investment.
When Jake Raulston opened the Naked River brewery near Finley Stadium in late 2018, the veteran home brewer hoped to use his beer-making skills and Chattanooga's growing brewery scene to find success in the highly competitive downtown restaurant and bar market.
Raulston converted a 124-year-old leased warehouse at 1791 Reggie White Boulevard on the Southside of downtown Chattanooga into a successful 150-seat restaurant and bar, along with a brewery and canning operation to sell a variety of IPAs, ales, stouts and cider brands to area stores and bars.
"It's been nearly double what we expected," Raulston said of his beer sales during the first 14 months of operation for Naked River. "It's been a tremendous amount of work and I'm not always sure I would want to do it all over again, but it's been gratifying to see the reception we've enjoyed in Chattanooga."
At age 29, Raulston is eager to build on that success by expanding his beer production and canning operations and improving the efficiency of production with the aid of new equipment bought with new capital for the company. To raise the additional funds for the expansion, Naked River is turning to investors attracted to the business through a crowdfunding capital campaign launched this week with the goal of raising 45,000 to $107,000 in funds for new equipment to expand the brewery.
Naked River is the first Chattanooga company to use the Mainvest funding platform, one of the small business fundraising methods allowed under the Jumpstart Our Business Startups (JOBS) Act adopted in 2012. The 8-year-old law offers small businesses the chance to use crowdfunding or other investment methods without having to undertake an initial stock offering under the costlier regulations of the U.S. Securities and Exchange Commission.
Through Mainvest, a Salem, Massachusetts-based funding tool that has expanded to Tennessee, investors with a minimum investment of $100 can receive a revenue share from the Naked River Brewing Co., and receive a portion of the company's gross revenues until they are repaid the initial investment plus up to 50% or 75% more within four years. The brewery will use the investment funds for expanding production, renovating their Southside facility and generating additional revenue, according to its investment offering.
Luke Arterburn, the director of expansion for MainVest in Nashville, said Mainvest is working to aid Main Street small businesses like Naked River to grow and thrive and to give a chance for the community served by such businesses to invest in the companies. Unlike GoFundMe campaigns, the Mainvest platform is a type of investment loan to be repaid from the company's operations and not a charity or a way to distribute its products as some GoFundMe campaigns promise.
"We think there are a lot of people in Chattanooga and other cities who want to support and invest their money in local businesses that are successful," Arterburn said.
MainVest's mission is to give small businesses access to capital from their community with flexible terms, and to let the community invest in local businesses they believe in, Arterburn said.
The Naked River Brewing Co. is trying to promote the sales of another one of Chattanooga's best-known consumer brands — the marshmallow snack treat known as the MoonPie made by the Chattanooga Bakery Co.
Raulston, who grew up knowing many of the leaders at Chattanooga Bakery Co., developed a MoonPie stout as a home brewer a few years ago and it proved so popular he served it as his wedding.
"What is really neat about the MoonPie stout is that you are hard-crushing 500 pounds of MoonPies to go into the production process (for a 900-gallon batch of beer) so it's a long labor of love that usually takes four people almost eight hours to get all those MoonPies into this beer," Raulston said.
"But it's proven very popular," with requests for the MoonPie stout from New Orleans to Canada, he said.
Raulston said Naked River also hopes to expand its outdoor seating area at the facility it leases near Finely Stadium from developer John Wise, who is also building an upscale apartment complex next door next to the First Horizon Pavilion.
Contact Dave Flessner at firstname.lastname@example.org or at 757-6340.