4 by 4 Brewing ‘testing the waters’ for investors

Springfield-based 4 by 4 Brewing Co. LLC is well on its way to starting a crowdfunding effort to find potential investors as the company seeks expansion opportunities.

Co-owner and chief financial officer Derek Shimeall said the company is in the “testing the waters” stage and exploring a StartEngine crowdfunding campaign that could begin as early as next month. The company points potential investors to a StartEngine page, noting as 4 by 4 “has scalable production capacity and a proven taproom model, we aim to grow into new markets while deepening our existing local roots.”

Shimeall said reservations for potential investors are now being accepted on the StartEngine page, which is to determine interest and if there’s enough demand to be a viable option for the company’s future expansion. Shimeall said July 14 the company was already halfway to its $124,000 reservation goal – a total established by the U.S. Securities and Exchange Commission.

“If we do hit that $124,000 reservation amount within 30 days, then the SEC and StartEngine platform will allow us to move forward with going into the actual sale of shares and investment opportunities,” he said.

The company announced the plan July 9.

“We’re looking to expand our brand as a craft beverage company instead of simply a craft brewery,” officials said in the email announcement. “We are constantly looking to evolve with the industry, stay relevant and serve our community. We’ve already started this by offering a wider variety of drink options from (nonalcoholic) options to expanding what kinds of alcoholic beverages we offer.”

The company operates locations in Springfield and Nixa. Its first location opened in Galloway Village in 2017, followed by its Nixa brewery in 2023 at 9903 Sawgrass Ave., adjacent to Fremont Hills Country Club.

It notes on the website that 4 by 4 increased distribution 17% year over year in 2024 and only has 20% of brewing capacity utilized.

Declining to disclose 2024 revenue, Shimeall said 4 by 4 produced around 2,200 barrels last year, essentially the same as 2023 production.

He said the company is trending toward 2,400 barrels this year.

“You can see that relative plateau, right?” he said.

Still, Shimeall said the 20% of brewing capacity in use shows it has the capability to brew out of its existing locations and not have to invest in additional infill for utilities and equipment.

“Basically, we’re saying we can take on hopefully growth of demand in our current two locations and then add additional locations and supply ourselves in essence without having to reinvest in any additional equipment,” he said.

Exploring opportunities
Not content to stand pat, 4 by 4’s ownership team of eight – consisting of four couples – is looking at growth opportunities. Shimeall said expanding product lines, adding entertainment options at its existing locations and opening in another market are all on the table. The crowdfunding option was selected based on research the ownership did, including calling around to breweries in Arizona, Colorado and the East Coast.

Examples of breweries that have recently utilized crowdfunding are Silver Spring, Maryland-based Silver Branch Brewing Co. and Idaho Springs, Colorado-based Westbound & Down Brewing Co., according to SBJ research.

“Tons of breweries have gone to this model,” Shimeall said. “We’re unique in this area as I’m not aware of anyone that’s done it in this area in our industry.”

While going to a bank could have been pursued, Shimeall said the company is “fairly leveraged” with its Nixa location, which consisted of a 12,000-square-foot brewery, taproom and event space. Past Springfield Business Journal reporting put the project cost at $2 million, but officials declined to disclose the final price tag.

“As the building was going, interest rates went through the roof, building costs went through the roof,” he said. “So, we settled in a lot higher than the original business model.”

Shimeall said 4 by 4 has changed its taproom model “pretty significantly already over the last six to nine months, which led to adding slushies, adding batched cocktails, adding an extreme amount of NA offerings, adding pump flavors with water and/or seltzers and pump flavors into beers.”

He added, “What we found was people want beverage options. They don’t just want beer. So, we’ve acknowledged this, and we’ve really been transforming into a beverage company model that is still making beer.”

Shimeall said 4 by 4 is still largely driven by beer, which he estimated is about 75% of drink sales. However, the brewery’s drink menu also features numerous other options, including wine, canned alcoholic seltzer, slushies – both alcoholic and nonalcoholic – and craft cocktails, such as blueberry lavender spritz and watermelon mojito.

“Changing that portfolio mix has already started,” he said. “How do we continue to (research and develop) that and actually come out with some additional lines that can also be retailed and packaged, not just across the tap?”

The company’s product line is currently being distributed in Missouri within a two-hour radius of Springfield, Shimeall said, adding it consists of five beers – Bluegill Light, Parkside Pineapple, Perches Mexican Lager, Smooth Criminal and a rotating seasonal offering.

Expanding the product distribution line depends on what direction 4 by 4, the distributors and the market dictates, he said. Possibilities are different ready-to-drink canned cocktails, nonalcoholic beverages and expanding the beer product line.

“We do feel like there’s an RTD liquor market available to grow some,” he said. “That’s really where some of this investment comes into play with a little more market research and [product] research and development.”

Aiming at investors
If the crowdsourcing campaign launches, Shimeall said the entry point for investors will be $500. The SEC will approve a valuation for the company, which will then be posted on the StartEngine website. He declined to disclose the company’s valuation in advance of paperwork approval by the SEC.

“In essence, what they’re doing is they are buying shares from us,” he said of investors, noting the total raise would be capped at 20% of shares in the company. “We’re diluting our ownership shares evenly. So, they will have ownership shares in the company.”

However, he said those who choose to invest would have nonvoting shares.

“It’s not like we’re going to have 800 or 900 people day in, day out, tell us exactly what to do,” Shimeall said.

“Crowdsourcing just opens it up to such a broader market because that buy-in can be so much lower,” he added. “You’re not asking someone for $500,000, $1 million or whatever the number is.”

Ron Sevart, who co-owns Gunners Firearms LLC in Raymore, is a semi-frequent customer at 4 by 4’s Nixa brewery. Estimating he’s been to that location around a dozen times, the Kansas City resident said he stops by sometimes when he visits his lake house in Kimberling City.

“I’m just an avid drinker of beer. I love breweries,” he said while visiting 4 by 4 on July 14, noting he’s visited about 40 breweries in Missouri, Arkansas, Kansas and Oklahoma. “If we come to the Springfield area, this is where we go to.”

Sevart said he’s intrigued by the investor concept, but as a business owner himself, he doesn’t envision taking that path to raise capital.

“I’m not saying it’s a bad idea,” Sevart said, adding he would consider investing in 4 by 4, which he said is one of the best breweries he’s visited.

Shimeall said he didn’t know what to expect when the promotional period for potential investors started earlier this month. But the early response has him feeling a bit more confident the crowdsourcing campaign will launch soon.

“The fact that we hit 50% of it – basically $70,000 in one week – yeah, I feel a lot better,” he said.