Taylor St Baristas Talk About Their Recent Bond Issue and 2015 Plans

Following on from the successful completion of their recent crowd funding bond, we sat down with Taylor St Baristas CEO Richard Shaer to find out more about how the bond was received, how they made sure it was a success and what it means for their 2015 plans.

QSR: How did your bond issue go? Were you surprised by any aspects of the process?

The bond issue went well. What I think we were most surprised about was how strong the initial response was. There were early adopters, and others keen to get involved upfront, though it then took a while for other investors to go through all the documentation, do more research, and see how the process was going before deciding to invest.

QSR: How did you go about building momentum for the fund raising?

In a very basic sense communication was a key element. From our perspective, we worked at building strong momentum by maintaining communication with our potential investors, letting people know what we were doing, how we were progressing and I think that gave people a lot of confidence. We were able to do it through the crowdcube platform which was very useful. So when we had a new coffee in store or an advance in our smartphone app, people would be interested in knowing what was going on with the business and that helped to.

We also held investor evenings because it was important for some people to ask follow up questions and get a bit more of a personal touch. When you are investing money you want to get to know the people who you are investing in, not just the business. So the Founder and I would hold investor evenings to meet investors, enabling them to ask us about the pitch and get more colour on the business.

QSR: How did you involve your community in the bond issue?

In terms of using our community, one key learning is that your customers will understand your business better than a financial institution. If you go to a bank they’ll look at your business like any other business whereas your customers see things from a different perspective. They can see the queues out the door, they see the quality of what you’re producing. They believe in the future of your business. So that was a really great way to get our community involved.

QSR: How did you market the bond?

We did a bunch of things- posters in stores, stickers on cups, sent out newsletters to customers, had flyers, did PR, and one of the things we did that had a really good response was in-store promotion. When we hit 1.2 mill we gave away coffees and Taylor St between 1-2. That got people excited in terms of updating them on progress and feeling they were a part of its success.

QSR: Have you seen an increase in the number of customers since you launched the bond?

We’ve had strong business performance and a strong start to the year, and while it is difficult to say whether that is from the bond issue, we definitely feel that it has raised the profile of our brand.

QSR: How many investors were there in the bond?

Around 500

QSR: How much over your target did you raise?

We closed the bond at £1.85 mill and our target was £1.5 mill. That’s a really interesting aspect of crowd funding and shows a belief in our management team. We had a target amount but the management capacity to spend more than that. In a sense the target is the plan but we had the management capability to deploy up to £3 mill.

QSR: So you liked the flexibility that crowdfunding gave you?

Yes. What is interesting from our perspective is that because we have developed a successful model around cafe openings, our business is highly scalable meaning we have flexibility. This is very distinct from bank funding where you need to go back every time you want to open a new cafe. So with crowdfunding if you exceed your funding you can accelerate your growth.

QSR: What are you going to do with the money you raised?

We’re going to stick to the plan we set out in our offering document and expand our coffee wholesale abilities. Basically just continue the model that’s been successful.

QSR: How many cafes are you seeking to open over the next year?

We would look to open 3-4 new cafes this year.