Less than five years after its inception, the Charlotte-born beer delivery service BrewPublik has filed for bankruptcy. The local startup darling expanded in recent years, evolving from its signature home-delivery to supplying craft beer to the headquarters of major Silicon Valley companies, including LinkedIn, Google and WeWork.
In an interview with the Agenda, co-founder and CEO Charlie Mulligan said that the decision to file Chapter 7 bankruptcy last week was not prompted by any major event or drop in sales. Revenue has grown consistently by roughly 80 percent every year, Mulligan says. Overall sales totaled over $2 million last year, he says.
Still, the company wasn’t growing as quickly as Mulligan and his team had hoped. BrewPublik’s debts mounted, and its employees simply wanted to move on to something different.
“Generally things were proceeding in a positive manner,” says Mulligan, 30. “This was just a decision having to do with what everybody in the company kind of wants to do with their lives.”
Former employees, however, contend Mulligan’s optimistic spin on the situation.
Brandon Reed, who oversaw BrewPublik’s East Coast operations, says employees were not consulted about Mulligan’s decision to file for bankruptcy.
Mulligan oversaw the company’s finances, but Reed and others knew that BrewPublik owed “a lot of people a lot of money.” Among the creditors listed in BrewPublik’s bankruptcy filing are breweries and distributors in California, an artist in Charlotte, financial consultants in New York and the Internal Revenue Service.
“The way he worded it to me (was) he’s like the guy in the movies walking out of a burning building,” Reed says.
“All those people he owes money to? They’re not walking away. They’re still in the building.”
BrewPublik, which specializes in customized craft beer and wine delivery orders, appeared poised for major growth soon after it started operating in late 2014. It was hailed as an example of what millennials could achieve in Charlotte’s fledging startup environment.
When he and a few friends started BrewPublik, Mulligan used an algorithm (called a “beergorithm”) to curate a selection of craft beers for customers once a month.
“The highs and lows of starting a company from scratch never change,” Mulligan wrote in a column that appeared in the Agenda in August 2015.
“Sometimes, I feel like I’m on the precipice of the most exhilarating life ever. At other times, I look around and legitimately worry that I’m going to end up penniless and destitute.”
In 2016, venture capital firm SierraMaya360 said it would invest $5 million over five years to to help accelerate BrewPublik’s growth. SierraMaya360 founding partner Amish Shah introduced Mulligan to 500 Startups, an accelerator based in San Francisco. BrewPublik became the first Charlotte company accepted into the program.
Within a few months, the tide started to shift for BrewPublik, which had its headquarters at the AvidXchange Music Factory.
An early 2017 article in the Charlotte Business Journal called into question how robust SierraMaya360’s investment in BrewPublik’s business really was. The article (headlined “What happened after this venture capital firm’s big splash in Charlotte? Not much”) stated that to date, BrewPublik had only received $15,000 from SierraMaya360.
Jeff Brokaw, a former associate at SierraMaya360, said that was the extent of the firm’s investment in BrewPublik. Brokaw left SierraMaya360 in December 2016.
“Nothing additional was ever put (in) it,” Brokaw told the Agenda.
SierraMaya360 could not be reached for comment. Mulligan told the Agenda that BrewPublik had not secured additional venture capital funding since SierraMaya360’s 2016 announcement.
In late 2017, BrewPublik said it would discontinue its home-delivery service in order to “right size” the company, the Charlotte Observer reported at the time.
Indian Trail resident Candy Lake says she was one of BrewPublik’s early customers. She enjoyed the surprise of the curated beer selection delivered to her doorstep, as well as to her tailgates before Panthers home games.
Lake says she was very disappointed when BrewPublik discontinued home delivery “in favor of corporations.”
“I think that’s where they went wrong — alienating their first core customers,” Lake said in an email.
When BrewPublik discontinued home delivery, Mulligan told the Observer that the company had “extremely ambitious expansion plans in 2018,” including an expansion into at least seven total markets.
By the time it declared bankruptcy, BrewPublik had expanded its beer-delivery service to five markets: San Fransisco, Seattle, Charleston, Charlotte and Raleigh.
Mulligan says pretty much everyone in the eight-employee company is ready to do something new.
“We’re very young company, and ultimately it became less attractive to continue,” Mulligan says.
Startups have something like a 90 percent failure rate, Fortune, Forbes and others have reported.
The forces against them are strong, Mulligan says. Startups grow a business out of nothing, often in undeveloped industries. They feel compelled to expand in a short period of time in order to meet investors’ ambitious goals.
“I don’t think there’s anything wrong with that. I just think if you’re not getting the traction that you want to, eventually it does really wear on everybody,” Mulligan says.
It’s now also getting easier to get alcohol delivered to your doorstep through companies like Doordash and Uber Eats. Mulligan says competition wasn’t really hurting BrewPublik, though.
“The majority of those grocery-store-based delivery systems don’t work that well with the curated type experiences that BrewPublik was providing to customers,” Mulligan says.
In its Chapter 7 bankruptcy filing last week, BrewPublik reported debts of $100,001 to $500,000. The filing indicated that BrewPublik’s assets were less than $50,000.
A small business files for Chapter 7 bankruptcy when it is unable to repay its creditors.
Unlike in a Chapter 11 bankruptcy, a business has to discontinue operating if it files Chapter 7. Mulligan says BrewPublik worked to take care of its outstanding commitments before filing last week. Mulligan’s attorney, Travis Sasser, declined to comment.
“A bankruptcy filing is just to try to make sure that anybody who has a claim gets fairly treated and that everything gets distributed properly,” Mulligan says. He could not be reached for further comment about the company’s debts.
After BrewPublik shut down, Reed, the former BrewPublik employee, quickly started his own company, Vibe Carolina, which also delivers curated craft beer selections. He’s focused just on North Carolina for now, and works with some of the customers who used to use BrewPublik.
“I didn’t want to do anything different; I loved my job. That’s why I opened up my own company,” Reed says.