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Investing FAQs

Who can invest in RedHen?  Do I have to be an accredited investor?

Both accredited and non-accredited can participate.  In “layhen” terms: there are no minimum income or asset requirements for becoming a RedHen investor.  Anyone can do this, from first time investors to professionals.  We are deeply committed to empowering everyday people around finance and investing.

can I invest using my tax-deferred retirement funds, such as those in my 401K or IRA?

Yes, you can use funds from tax advantaged accounts including IRAs, 401Ks, and their Roth counterparts to invest in RedHen. To do this, you need to roll the funds you want to invest into a self-directed IRA.  Self directed IRAs are managed by a custodian, allowing you to invest your tax-deferred retirement funds into investments of your own choosing.  To learn more about this process, reference this excellent article here.

One custodian that allows you to choose where your retirement funds are invested is New Direction Trust Company. Please note that things change, so investors should do their own due diligence.

What if I want to invest more in RedHen down the road?  Will you have a future offering?

We have activated investors at every level from $500 to $50,000, and many who came on as firestarter investors in our initial private chose to increase their investments as RedHen’s momentum and impact gained traction.  RedHen’s long-term capital strategy includes regular investment campaigns so that our regenerative credit pool grows at pace with the business and our investors can incrementally add to their nest eggs.

How far along is RedHen in its development?  What pieces are already in place?

2016

  • Winemaker sourcing

  • CA market research

  • Co-op structure developed

  • Investment model R&D

 

2017

  • Financials mapped

  • Investment model created

  • Logistics partner established

  • Market research

  • Marketing & brand strategy

 

2018

  • Investor program developed

  • RedHen brand launch

  • Producer content developed

  • Market partners established

  • $250K Private investments raised

  • $1M Direct Public Offering launch

Where can I make an investment?

Through late November, you can participate in our direct public offering and make a secure transaction through the RedHen page on Crowdfund Mainstreet. Additional details about investing in RedHen, including our excellent rate of return and investor benefits are available there.

Do you have a pitch deck?

Yes, our pitch deck can be viewed HERE. It is also available on the Crowdfund Mainstreet investing page.

What is the repayment timeline for this investment?

Unlike with equity offerings, investors don't have to wait for RedHen’s balance sheet to show a profit before they start seeing returns.  RedHen’s revenue-share percentage is calculated to strike a balance between paying off debt as quickly as possible while allowing for adequate operating capital to invest in our team, our infrastructure and our wine portfolio development.  RedHen’s target repayment timeline for the first $1M of Plowshares (revenue-share) investments is seven years, but the elasticity of this timeline is what will allow us to continue moving forward regardless of unforeseen economic decline or boom.

What are the advantages of a cooperative ownership structure?

Our employee-equity model is one of RedHen’s most exciting innovations for the wine industry.  A cooperative corporation structures its governance and leadership around employees who have skin in the game.  Worker-owners have a real stake in creating innovative solutions for inefficiencies and identifying market opportunities.

An age-old problem for wine importers is the loss of valuable producer and client relationships when employees break-off to start their own competitor companies.  By building clear pathways to equity, leadership and retirement, RedHen becomes the destination rather than the stepping stone for our industry’s greatest talent.  Our team can dedicate themselves to building the portfolio and company they believe in, confident that they’ll keep whatever they create.

Cooperatives have a stronger success rate than traditional businesses: after 5 years in business 90% of cooperatives are still operating versus 3-5% of traditional businesses.) (World Council of Credit Unions study in Williams 2007).  Evidence also shows that cooperatives both successfully address the effects of crises and survive crises better (Borzaga and Calera 2012).

How is employee-equity structured?

Essentially we offer employees a partner buy-in opportunity after they have worked with RedHen for five years.  If everyone is happy after this candidacy period, the employee applies to the Board of Directors for membership.  Their member-share is purchased with a $10,000 equity investment (RedHen can finance this via payroll deductions if necessary) which goes into the employee-owner’s equity account.  The equity accounts grow with annual profit-sharing and can be redeemed (paid-out) periodically and/or upon the employee-owner’s retirement.

What if I want to drink some of my dividends?  Is there a wine club for investors?

We can’t wait to release special RedHen wines exclusively to our investors.  It will be a mouthwatering opportunity to share limited-release bottlings, library wines and new discoveries along with deep content, recipes and insider-scoops on what is happening at the cutting edge of wine and viticulture around the world.  We’ve already begun the licensing process that will allow RedHen investors to participate in this specially curated club.   State alcohol shipping laws will apply, so be sure to inquire about the regulations in your home state if you plan to become a Wineshare member.

What is a revenue-share investment?

Revenue-share is an innovative investment model that prioritizes stability for new businesses and security for investors. Structured like a loan, investors recoup their investment and interest through regular dividend payments to them, based on a set percentage of RedHen’s revenue. The ultimate repayment amount is fixed while the payout timeline is variable.  Check out the specifics of our interest and payout terms here.

Revenue-share helps to avoid some pitfalls of traditional equity offerings that rely on a business going public or being sold in order to pay back investors. It protects the founders’ creative control and cash flow while creating access to capital for the business. This article contains a great overview of revenue-share investing.