How do you go from a $100M family business to a $300M fund?

Episode 119 - Brian Rosen Transcript Jason Kirby (00:02.219) Everyone, welcome back to Hundred Million Dollar Exits. The show where you get to learn from experts and business founders and investors that have built and sold and scaled $100 million businesses. Today I'm excited to have Brian Rosen on the show. Brian, you built and scaled your family business from 30 million to 100 million in revenue, sold it to private equity. And you then also did it again. You built and sold another business for another 20 million, and now you run InvestBev, which manages over 300 million in AUM and are kind of the de facto expert in investing in alcohol beverage companies. Brian Rosen (00:20.056) That's correct. Jason Kirby (00:34.981) Brian, welcome to the show. Brian Rosen (00:37.506) Jason, thank you for having me. I'm excited to be here. Jason Kirby (00:40.215) You know, Brian, it's not often that we get to have people have come in and taken a family business, scaled it to a much higher level, sold it, and then kind of done some other things. What I'd like to understand is like you sold this business, your family business in your 30s. What felt harder in that moment? Was it letting go of the family business identity or was it knowing that you could do something bigger? Brian Rosen (01:02.476) Well, I didn't know I could do anything bigger. That's the challenge. It's everything's a leap of faith. You kind of jumping off a cliff every time you leave the home turf, which is the family business. you know, it's imp it's important to understand I had a a very stable existence, right? I was we we had a golden goose, we had retail liquor stores in and around the Midwest. we were the kings of Chicago and that never waited for a table at any restaurant, you know, we're often awarded and celebrated within our industry. but as I'm third generation and as you know, what I think five percent of family businesses fail in the third or are 95% of family businesses fail in the third generation. And so I happened to see that the end was coming and I happen to see it ahead of my family. So I engineered the exit of our family business based on external factors that that our family could really brush off kind of mentally, but not actually. And so sold the business and it was a leap of faith. I didn't know what I was gonna do next. I didn't know where I would land, but I thought that the unknown had a greater probability of success than what I knew. Jason Kirby (02:22.733) We can kind of catch us up on the timing of this. This was, you know, kind of before the big financial crisis, correct? Brian Rosen (02:26.254) Yeah, th this was. This was I began the I I I wrote a pitch book. I used my connections through YPO to to find to find people that would buy a kind of a an expensive chain of liquor stores. And this was in two thousand and two this process began. So the GFC was seven, eight. And the deal was consummated in four. But the it was it was before the GFC and thankfully so, because the GFC really took a hit on retail, on interest rates, on people having capital to spend on deals. so I consider ourselves timing experts in that regard. Jason Kirby (03:17.123) What happened after that sale? So you sell to to private equity. You know, was it a hundred percent sale? Did you guys roll over? Brian Rosen (03:23.968) I sold eighty percent of the business. I kept twenty percent. So I rolled twenty percent into the deal. I stayed on for about a year and a half, two years as CEO and then I left. I left and my equity the remaining equity never materialized into anything. Jason Kirby (03:45.079) 'Cause it didn't excel recently or shortly after the Benny's, a few years later. Brian Rosen (03:48.674) Well, they the the private equity without a a Roseman behind the wheel, it it was just a it it wasn't the same kind of business and Chicagoans and they understood this and they qu you know stopped frequenting the frequenting the business. It became a it became a loser. So what was sold to Benny's was the shell of a company, meeting the remaining stores they didn't close. it was really just a fire sale at that point and I was long gone. It was hard to see. I mean, this is the business that had been around since 1933, which is when Prohibition ended. But you know, my identity was never as a retail liquor guy. That was not my identity. So my family's identity, but it wasn't mine personally. And so yeah, it was it was hard to watch. The whole thing was it was my first ever exit. I didn't know how to do it. I didn't know who to advise to advise me. I didn't know what was a good decision and a bad decision. I had no idea. And I had no ability, none. to look to look around the corner, which I have sib subsequently acquired. Jason Kirby (04:52.514) Well yeah, so I think that would be an interesting chat is like knowing what you now know, you know, fifteen, eighteen years later, all the experience you've done, all the transactions you've done, what would you have changed about that transaction, knowing what you know now? Brian Rosen (05:06.894) To any of your listeners who are lucky enough to be able to sell a business, equity is key. Equity is the only game in town. Equity creates wealth. in both of my businesses that I've sold subsequently, that was the driver of wealth. It wasn't a paycheck. it wasn't it wasn't that. It was your equity. And and I probably sold too much equity in my first transaction. I left money on the table. I I'm guessing I left about ten million dollars on the table. I didn't structure the deal correctly to I didn't add earnouts, which is valuable. I didn't I didn't know who I got in bed with as a private equity firm. I was so happy to get a deal done, I didn't care who the counterparty was. And those are all mistakes I made. I mean, I was in my early thirties, had no deal experience, and I had a and I hired a law firm that wasn't necessarily great on my behalf. And and and didn't give me the gotchas. They just gave me the deal. So those are all mistakes I would I would correct now. And it's not easy because you think you you know, you think people want to buy your business, you think you're the smartest guy in the room. But what I've learned subsequently is that I never want to be in a room where I'm the smartest guy ever. I'm gonna be in a different room. Jason Kirby (06:26.166) There's often the feeling that the post exit founder conversation is if you didn't bring in the experts that have kind of been there, done that and these transactions, actually advise you. 'Cause there's definitely like representation for the company to get a bill done. But there's also like the Brian Rosen, you know, the founder, you know, representation. And often founders don't spend on that. They're just like, Well, the they're the company lawyer, they're representing me. It's like, no, those are two different things and those could maybe not be aligned always. Brian Rosen (06:39.394) Right. Yeah. Brian Rosen (06:47.596) No. Brian Rosen (06:51.745) You you're a hundred percent right. And one thing I would add to that is that a lot of founders when they sell their businesses cut back on the legal because it's so expensive. You can spend a half million dollars, a million dollars on legal fees, and you're thinking to yourself as you wind your way towards a transaction, you're thinking that's my money I'm spending. I'm spending real money in legal fees that it feels like I'm giving away my my big win. And that's the best money you're ever gonna spend. To be honest. Jason Kirby (07:23.074) And you only get to do it once. Like once it's done, it's like, that's it. Brian Rosen (07:25.975) Theoretically, yeah. Yeah. Yeah. And you can't go backward. And and and everyone, you know, there's the honeymoon phase and there's the marriage. purchasing the business, due diligence, your private equity partner or your capital partner, you guys are in love. There is a honeymoon. You're going out to dinner and you're going to Knicks games and you're doing all these great things. go Knicks. And you are and you and you think everything is is hunky dory and when the deal closes, that relationship very quickly goes from friends trying to get a deal done together to employ your employee. And it's very much worth noting that. Jason Kirby (08:04.778) And you stayed on for about a year and a half. What was that experience like? Were you like really trying to grow the business? Were you just trying to stay alive? Were you just kinda like, nah, I'm I'm done, got my money? Brian Rosen (08:16.243) No, I don't I don't think about money like that. Money doesn't play an incredibly important part in my day to day. I mean, you want to have enough money for retirement and all those things, but at the end of day, I you go to work every day 'cause you want to go to work, not because you're earning X, in my this is my opinion. The the the the post transaction honeymoon was very quick to die. And it was all of a sudden as an entrepreneur turned CEO and working for someone else for the first time in my life, I was hell I had to have quarterly reporting. I had to have monthly closes, financial PL closes, I had to report to a board. I was held accountable for things I had no control over. Like in Chicago, if we do forty percent of our revenue in the last three months of the year, which is very common in retail, and then it snows three of those days and I can't get my trucks delivered. then my revenue goes down X. And in the old days when it was a family business, it goes down X. You know, you know you have this theory that no matter what, the customer's still going to be there you know, in in in kind of professional capital experience, that they want to know why why it snowed and and what you did about it. And why you could get why you couldn't get why you couldn't get your deliveries out, et cetera. why was payroll so high? because you needed more labor to get the numbers. that you need to satisfy the board. All of these things were foreign to me and I delivered very quickly. The deal closed in May. And by June, July, by August, I knew I was, I knew I was toast. I knew I was toast as a person and just stayed on for another year and began looking kind of subversely for work. Jason Kirby (10:07.18) Well, and that ultimately led you to go to P W C which I always think is a pretty fascinating transition, but where I wanna kinda take the conversation is Bebstrat and how that you know, you take the lessons learned of selling the family business and going through that, that experience on kind of the the marriage, then divorce, then, you know, maybe a breakup, you know, period and then you know, on to to the next. tell us kind of what was Bevstrat and how you manufactured that business to to an outcome as well. Brian Rosen (10:39.169) Sure. I think just real quick, just a a little Pw C sliver because it's relevant, is that I was at PwC because they did not have an advisory services division for Adele Beverage. an EY and Accenture was really giving them the business, meaning they had all these companies, DiAgio Constellation, Preneur Ricard, Anheuser Busch, Molson Quarse, they had all those companies as consulting clients and PWC didn't have anything. So they brought me on board to build the practice. I built the practice and I brought to my leaders at PwC in about two years in this idea of Babstrat and this idea of invest bad capital. And my D took me aside and he said, We don't create businesses here, Brian. We just bill for hours. And that was a Friday. when I brought the idea to him and that was a Friday when he told me we don't do that here and then on Monday I resigned. And I packed up my s my stuff in New York, left my apartment and drove to Chicago and started Bevstrat the next Monday. And that's kind of the you know the origin of of Bevstrat is that I brought this idea to PwC first. It wasn't in their comfort level. And I created Bevstrat the following Monday and that became a a you know a twenty million dollar plus exit for me. and I owned a hundred percent of the business and I did it in four years. So it was a beverage related business that focused on advisory services and sales and marketing, exactly what I brought to price. I just did it myself and and it became a home run number two for me. Jason Kirby (12:22.602) And so how did you scale that business so fast? Was it essentially consulting and advisory as like the primary function of the business, or wha what kind of gave it its its positioning and its growth? Brian Rosen (12:35.638) Well the the the I played on this I played on this notion that that alcohol beverage in the US is a very challenging business and ninety-five percent of brands fail. And one of the reasons brands fail is because it's a limited distribution network and it's controlled by three companies basically. But there's tens of thousands of brands. The three companies combined carry six thousand items. So You've got three companies distributing 6,000 items. You've got 40,000 items that are available for sale. That means there's 34,000 brands that could hire us to help them. And so I used that, I kind of reverse engineered that. And so I pitched the 30, 34,000 brands and I said, I can be sales marketing advisory back office support for you. And that's how I positioned it. And I'm an expert because of my days at Sam's and my time at Price Waterhouse. and I was I never had a money, I never had a month where I lost money, ever. It was it was positive from day one. That business. It was a great business. Very hard, as all business is, but this one was hard and profitable. Jason Kirby (13:47.191) Hard profitable, at least you got made it worth it. and talk about manufacturing the sale. Like were you being chased? Did you realize that it was now time to sell like the previous business? How did you kinda architect that? Brian Rosen (13:59.797) No, I wasn't looking to sell. I was approached at a at a conference by a distributor, the people that I that I ra that I kinda rallied against in all my in all my marketing. I was approached by a distributor that wanted to buy Bev Stret as a point of differentiation, a distributor that had its own consulting practice, a distributor that had its own sales teams, a distributor that worked on behalf of the brands in instead of against them. And they bought us as a way to differentiate themselves. in a market. And note to listener, a strategic buyer will always pay more than a financial buyer. And that is a hundred percent true. Jason Kirby (14:37.43) No, there's they have upside. They have the ability to kinda manufacture at scale and Brian Rosen (14:40.16) Yeah. Yeah, they c they cut up they cut operations and they increase revenue and it's incremental incremental revenue with not incremental associated op ex, a hundred percent. Jason Kirby (14:52.682) And so you got twenty million in your pocket, you are north of twenty million, you then go into a leadership role at the acquire. what kinda happens there? What starts going through your mind? Are you happy at that? You know, is it the same kind of marriage problem you had before? Or is it Brian Rosen (15:07.796) No, because if I say if I say it's a marriage problem that I had before, that becomes my problem. It becomes me as the problem, as opposed to the system. what happened was COVID. we were a sales company that needed to be in liquor stores and bars. And the they acquired my business in 2019 and COVID came March of 2020. dumb luck on timing, but my business Jason Kirby (15:12.545) Okay. Brian Rosen (15:34.923) I mean if if if it's relying on physical people going into physical stores and liquor stores and bars and restaurants are closed during COVID, I don't have a business. So after two years of trying to figure that out on the acquire of me, this company was then acquired by another company. So I took a second bite there and and then I left and and kinda and really devoted full energy to invest buff capital. Jason Kirby (16:06.65) And walk us through InvestBev Cap Capital, because that's been that was going on kind of back at your Bevstrap days, at a high level. So kind of walk us explain to the audience what InvestBev is, why you started it, kind of where it is today. Brian Rosen (16:13.291) Yeah. Brian Rosen (16:22.54) Sure. I I always had this this desire to be on the other side of the counter. In retail we look at one side of the counter as the merchant and the other side as the customer. And I always wanted to be the customer. and I knew that through my time at PwC and through my MBA experience and and just basic life experience that there's a lot of money to be made in alcohol and a lot of money to be made in the dislocation. It's a fragmented space. There's Distributor consolidation, retailer consolidation, yet capital is drawn to alcohol because it's totally non-correlated. and and you know, a good investor wants non-correlated or alternatives in their in their portfolio. So I formed this company. My first fund was really kind of diminutive at five million dollars in twenty fifteen. that turned into nineteen million dollars a few years later, eighteen months later. that was fund one. Fund then I'm like, well, I'm on to something here. my God, I may actually know what I'm doing. And then fund two came and three and four and five closes. Fund five closes on June 30th of this year, 2026. And then from there we sprung out an insurance platform, we sprung out a s private credit or structured finance platform, real estate and advisory services. So five units and all of them. have created like a a platform within beverage finance that is and that's how we operate today. Jason Kirby (17:59.113) And I wanna understand, so we talked about your perspective in doing deals on the kind of founder builder side, operator side. And now you're on the other side, deploying capital and making investment decisions. What do you see as different from those two two different perspectives and kind of what prepared you to be on the other side of the table? Brian Rosen (18:25.001) You know, I'm a I bet founders, I bet founders and I bet category. a good founder can can create his own his own success. A good brand cannot. There are plenty of good brands that are in the graveyard. and this is something that I've just learned through my career. But you bet on a founder with an average idea, that's better than betting on a bad founder with a good idea. And And the one thing I would also say, and I tell this to my founders all the time, and I tell tell it to my team all the time, is you're either a fo you're either a founder or a CEO, and you're rarely the same person. Founders are in the weeds, in the mud, creating business. CEOs are operating businesses to profitability. And oftentimes the founders are not the fine don't have the financial acumen to run a great company. They they have the acumen to build the company. So As an investor, I I bet founder. I bet founder all the time. And I've made mistakes. I've also found winners in that strategy. but you gotta bet founder because a founder can pivot. you know, if you if someone's I'm only doing vodka and that's what I'm doing and I'm really good at vodka, I'm out. I I as a firm, InvestB of Capital, we are out of that transaction because that's a founder right there in that sentence who is arrogant. Who thinks they have all the answers, who doesn't understand there's a broader world out there, and also fails to realize that you can make vodka in one week in your bathtub. And so there's no skill to it. it's just marketing. And so we bet founder first, and we're a founder first firm. In fact, so much so that Inc. magazine gave us the founder friendly award in 2025 for being the most founder friendly private equity firm in the country. So we don't I don't I not only say it on podcasts, I s I I preach it and the team believes it. Jason Kirby (20:24.588) So tell us a little bit about the deals that you do. Are you backing like the actual producers, you're backing the brands, you're you know, obviously backing founders? but what what's some examples of the deals you typically would do or have done? Brian Rosen (20:39.445) We write checks between really one and five million dollars. we take min minority control but majority rights. we're viewed as strategic capital. So I ask for board seats, I ask for decision PL decisions on labor, which is the number one expense, the number one anchor on any brand. we do deals where we can create we can from a portfolio perspective, or I can look at the portfolio and I can say, We may win here, we may lose here, but overall we're going be okay. you have a couple flyers in there, but you have a couple staples in there. so how we look at deals is what's the category doing today? What's the category doing tomorrow? What is the founder doing today? What's the founder doing tomorrow? Do they understand their business? Are they capitalized because cash is king? are we entering into a a series A round, a seed round? And then what is the exit opportunity and who is the exit? partner. And so we do all of that before we enter, before we that's part of our diligence. I'm not gonna get in any trade without having an exit partner in mind. Jason Kirby (21:50.475) And you've been doing it for about eleven years or so, ten, you know, decade. What have been some of the outcomes that your firm has delivered or like some of the deals that you're most proud of? Brian Rosen (22:03.061) Well, quite a few. we've sold many companies out of the out of the funds. we had some good success in beverage e commerce. that that is like the last bastige of of of beverage brands to be able to sell on the internet, which is not easy to do because we have a weight and a shipping constraint. we've had some success there. We've had some success and we're gonna have quite a bit of success this year in cannabis beverage. Cannabis is having a a moment here in the States where hemp derived or Delta IX or THC at small po small doses are really lifting the alcohol beverage category in totality. So we have two of those brands in our portfolio. We're excited about that. and we have hundreds of millions of dollars of raw distillate of bourbon barrels that are laying down in and around Kentucky. And we're and and we're excited about that because once the the tariffs we expect the tariffs to go away and once they go away, Canada and Europe and Southern Hemisphere will open up to our inventory, which we have roughly ten percent of the bourbon inventory in the country. So we can sell that. Jason Kirby (23:20.842) How does one precu how does one procure ten percent of the bourbon inventory and kinda why was that a bet that you made? Brian Rosen (23:28.267) So you procure it by having a hundred years in this business and knowing who to call, Jim Beam and and Bardstown Distilling and Green River Distilling and Molson Cores and and others who have these barrels of bourbon, which eventually become the brands. that and why do you do it is because there's two factors at play here. If you buy a barrel of bourbon, it becomes it comes out of inventory. So it becomes more scarce the minute you buy it. you can't make the same barrel twice, different age, different mash bill. So once you buy it, it's yours. And then that same barrel goes on to be four thousand brands that don't have a distillery need juice to make the product. There's 121 distilleries in the country. There's 4,000 brands, brown spirit brands. So that means 3,000 in change need to buy their inventory somewhere. So they buy it from someone like us. The other thing that's unique about this asset class, Jason, is that it appreciates over time. Every every year it gets older. And every year it gets older, it gets more valuable. You do not need to be Creskin the Great, which I'm dating myself now, but you don't need to be Creskin the Great, this great mentalist to know that a McAllen 12 year old is cheaper than a McAllen 15 year old. And the only difference in that is three years. Same exact juice. So if I buy something at eight hundred dollars at year zero, through our regression analysis, we know that same barrel will be worth four thousand dollars in ten years. It'll be worth three thousand dollars in six years. So you buy it at zero, you sell it at X. Once you own it, you take it out of inventory, and it becomes more valuable. So that was the thesis behind adding this barrel component to our overall portfolio construction. Jason Kirby (25:22.211) I find that fascinating. I see those deals kind of pop up every now and then in the post exit of the founder community I'm in and it's you know, it looks fascinating. It's just like, you know, it's definitely a long term kind of hold or as you kinda say like an alt investment that's non correlated. Yeah. Brian Rosen (25:36.904) Yeah, passive hold. It's a passive hold. I mean you don't I don't have to do anything. I pay storage, I pay insurance, and then I spend years looking for the exit partner. Jason Kirby (25:46.433) And just educate me on the industry a little bit, like can I just buy if I'm a brand, do I just buy any barrel? Or like do I have to have like very specific requirements that kinda match my Brian Rosen (25:57.739) So you yeah, so there's something called a mash bill, which is essentially a flavor profile. But what's important to note in bourbon, this is why the trade is interesting, is that from zero to three years it's not really called bourbon. It's just raw distillate. When it gets to be three years old in Kentucky, it's called bourbon. And then a brand, any brand, can buy it from us or others and turn it into their brand. They can shower the barrel, they can put in high humidity in a Rick House, low humidity in a Rick House, whatever they want to do to make it unique. But a brand settles on their flavor profile and then they want to go ahead and get the juice. They can either they can buy it at year zero and hold it for three years with no return of capital. None. So they've put money out, they've got an asset that's appreciating but unusable. So their negative cash position, the brand, and they've got they've put money out for something they can't use. Or they can pay a premium They can buy it from from us, but they can be in business in a week. So that's the whole that's the deal. When you have this time component, it works to the favor of the capital. And so that's that was our thesis. Jason Kirby (27:04.694) Got it. And the distillers, the ones producing that juice, effectively need cash now. So hey, we just spent all this money producing this asset. Brian Rosen (27:11.73) Hundred percent. That y you're you're you're you're bright to get that. They everyone we we're a solve for both pieces. We're a solve for the distribut for the distiller who's a cash flowing business. It's not in the storage business. They're not in the storage business, they're not in the buy and hold business. They want to make it, sell it, make it, sell it, and keep that flywheel going. The brand, on the other hand, is not in they they don't have capital to put aside for three years with no ROI. Right? So we c we hold it for this period of time. And then we sell it to the end user and they've got a brand, we've got a sale, the d distillery's got a sale, and the the flywheel keeps moving. Jason Kirby (27:50.275) And so in the market that we're in right now, on the deals that you have made, like what what's something that you've seen some founders doing and or decisions that you're making that you know have you come and intervene and or step in? Brian Rosen (28:08.062) The one overarching comment I would say here is that founders are a unique bunch. And I'm a founder, but at least I I fancy myself a humble founder. And I fancy myself some would may say otherwise, but I I fancy myself a humble founder and I fan fancy myself someone who is open to feedback. A lot of founders, a good majority of founders, operate under I'm gonna make a brand that I want, meaning the founder, that I love, that my wife and I needed or created or my buddies and I wanted to create. And the reality is when you do that, your audience is just you. So to tell a founder, you gotta make a general product. You can't make something so specific to your own desires that you're going to limit your audience opportunity. And so that is a huge mistake founders make. They make, I, you know, I I I could I'm paraphrasing of course, but Founders that are like, well, my wife and I were climbing Machu Picchu and we found this Pisco and and it was great and we think the whole world should love it. Without without not discounting the fact that no one the pisco is a subset of a subset of a subset of tequila. And the audience is in the tens of thousands instead of the millions. So that kind of lack of awareness could cause someone to really lose their shirt in this business. And we look for founders that have a real good sense of I may have the idea, but I don't have the answers. And that's a founder I want to partner with. Brian Rosen (29:41.524) I can't hear you. Jason Kirby (29:43.542) What drives success in this industry? Looking at your portfolio, you have several different brands that you've backed. Like, what's ultimately the driving factor for a brand to be successful? Brian Rosen (29:53.16) Marketing. Hard work. All the shit's basically the same, to be honest. You know, the vodka, the bourbon, the tequila. Th there's not a consumer in America or anywhere that says, the agave you you used in your tequila is one month older than the agave I like. Like it it just doesn't exist like that. These companies are marketing companies. There's no inherently difference between Casa Migos and Casa Dragonase and Casa Azul and the other 5,000 celebrity tequilas that are out there. The difference is George Clooney and Randy Gerber. And so but the the juice itself is just a basic juice. In fact, like bourbon, in tequila, there's three or four distilleries that make tequila. So it's very likely that your casa amigos that you bought for $100 a bottle is made in the same factory as s as Kevin Hart's tequila or Michael Jordan's tequila or The Rock's tequila. It's all the same juice with different marketing. The success factor between win and lose in alcohol beverage is how well do you market? How well do you know your audience? And do you speak to them in a way that they're going to buy your purchase once, twice, and forever more? And that is the that's the key. Jason Kirby (31:13.538) So guess what I heard was the underlying theme there was have a celebrity. Is there is there an alcohol brand that wins today without a celebrity? Brian Rosen (31:22.097) No, no, what you heard was don't have a celebrity. Yeah. No. It's celebrity brands. so I'll ask you, Jason, you're in England, you're in London. Casa Migos, everyone knows. Ryan Reynolds Gin, aviation gin, everyone knows. I would ask you, c can you name ten other celebrity tequilas? I'm guessing no. Jason Kirby (31:24.565) don't have sorry sorry, mess sorry like Jason Kirby (31:50.498) Tesla? Brian Rosen (31:52.028) Yeah, yeah. Tesla. Well Tesla, we we owned we owned the mark on Tesla through our company Speakeasy that we sold. But yes, Tesla. But Tesla's a dog too because it's subject to Elon Musk's personal behavior. And so the reason we don't like celebrity tequila is because you're hinging your whole business on the moral and ethical and behavior of your celebrity. Sirac vodka, Puff Daddy, was a great vodka. until he went a little bit left of center puff puffy, if you will. You know, so he Yeah, well, you know, I who knows the audience, right? But but I y you don't want to be you want your brand to stand on its merit and its hard work. If you tie it to a celebrity and that celebrity is of ill intent, right? Your brand is tanked. We don't like celebrity tick stuff. It doesn't it's it's not what it once was. And now with social media and AI and influencers, you can get your audience without having Kevin Hart tied to it. Or, you know, or or any of these other celebrities that that that do the things they do. Jason Kirby (33:05.95) But how how does one get the word out now? Like, you know, paying for, you know, traditional advertising in this market is expensive. It's not necessarily easy and you gotta get the shelf space, you gotta be at the bars. Like how does how does one really actually step out and differentiate Brian Rosen (33:22.855) You gotta do the work. You you gotta create pull for your brand before you create push. You've gotta create an audience. I mean, Alex Earl is a great Alex Earl, Alex Cooper, both of the Alexes are great examples of this. Alex Earl teased her cosmetic line long before it was ever created. She created the pull before the push. And that's what social influence can can allow you to do. She made the consumer ask for the product before it was ready to go to market. So the time it was going to market, there was a fervor around it. There was an excitement around it. And that's what social media can allow you to do. you don't need Wiz Khalifa anymore to push your brand. You just don't need it. And and so that's how you get to market. You create your audience before you create your brand. Jason Kirby (34:13.964) So still very much a part of maybe like in traditional influencers, maybe not celebrity influencers, but influencers and traditional media buying or a social advertising. Brian Rosen (34:23.505) It just it just puts gasoline on the process. I mean, you could get there other ways. We've got plenty we've we've got a brewery in Milwaukee, Wisconsin that that creates beer for John Mullaney, the comedian. It's a non alcoholic beer because he's a recovering alcoholic. he you know, he certainly expedites the sale of it, the same way Bero does for Tom Holland, another non alcoholic beer. And London native. but the reality is if you find an audience that is attracted to your cause or your category, you'll be able to do that. You can just be online attack attract attacking and attracting your audience. It's much easier now than it's ever been historically. I'll give you a historical reference. I'll give you one that non-celebrity. Jaegermeister. It was a Sydney Frank product. And the way he got awareness was he p put scantily clad women in liquor stores and bars all throughout the late eighties, early nineties. There's no person in the world, not one, that likes Jaegermeister. It is a it it is a shot that you do when you lose a bet. Jason Kirby (35:16.514) And for what? Jason Kirby (35:38.693) Yeah. Brian Rosen (35:43.367) Right? That's what Jaegermeister is. It is one of those last call shots. It is, my God, I'm really gonna do this shot. And how do you turn something that is not flavorful by nature into a brand that's worth many billions of dollars? Well, all he did was he brought out Jaegermeister girls in college campuses around the country. And then he brought them to liquor stores around the country. Same thing with St. Pauli girls in their leaderhosen type outfits. These are not celebrities. Jägermeister is is is a horrible tasting brand that's got a great following because of how it got started. So there's other ways to get to market without being Alex Earl or or having influence. You can just be creative and you can be smart. Garage Beer is another one. You know, there's a lot of brands out there that just capitalize on what and what the market is asking for and then go attack it directly. Jason Kirby (36:43.115) And what would be your advice to yeah, it's probably the advice you give to your port goes. Like what's the advice you would give to founders that are looking to enter this industry? Brian Rosen (36:54.483) Capital. You need to have capital. you know it's a very, very, very expensive industry. And if you're undercapitalized, you're gonna go out of business very quickly because it's it's marketing first, brand second, and marketing costs a lot of money. So if you're undercapitalized, you're you're not gonna make it, period and stop. And if you're and you have to be able to be capitalized through seed round. through through series A. You k people that are investing in seed rounds on Elkbev are very likely to lose their shirt. Jason Kirby (37:32.148) And switching gears for the investors that are listening here, like why is alcohol a category that they should pay attention to? Typically it's kind of the sin category that, you know, the vice category that they're not allowed to invest in. how do you kind of stand out and kind of defend the category? Brian Rosen (37:53.097) Well I don't think just a for a point of clarification, there's not a lot of the the notion notion of sin categories are that's a notion from the seventies, sixties, early eighties, because all those categories do quite well now. Cannabis, alcohol, gambling, those are all great stocks to buy. there was a time when America in general was a little more wholesome and you stayed away from those things. The only people that we are familiar with that are forbidden from kind of alcohol is when we go to UAE or we go to Dubai and have family office meetings there, and there's something called Sharia law, which doesn't allow them to consume. Although and the irony of ironies, they all own casinos and own hotels with restaurants with liquor licenses. So we're still working through that kind of weird dynamic. But alcohol is a g a very good investment because it's not tied To any of the normal indices. When you look today in the US, when the markets open shortly here, and there'll be a bump up because the administration declared an end to the Iranian war, the market's gonna go up. If the market goes down, for whatever reason, in both of those scenarios, alcohol is not impacted. Alcohol stocks are not impacted. value of alcohol is not impacted, it's totally non-correlated. When the unemployment rate, when the unemployment rates come out the last Friday of the month, we're not we're not correlated. When people are sad, they drink. When they're happy, they drink. When someone dies, they drink. When someone's born, they drink. It is a forever social lubricant for the earth. And so we like that from a use case perspective of assets to invest in. I've got plenty of investments in my personal portfolio that are predicated on all the things we just talked about. The only the only investment I have that's totally an alternative is my investments in my own company. Jason Kirby (39:55.074) And so some quick questions I want to ask you for for the audience is what's the biggest mistake that a founder makes when raising capital for a beverage company? Brian Rosen (40:09.98) I think that I think that being really aggressive with your own equity, I think there is something to this I I think there is something to this notion of less equity of a bigger pie is worth more money. And founders that hold on to equity like it's their birth baby, investors don't wanna see that. We wanna see investors are we wanna see that the people that are asking for capital understand that the greater good is worth more than the equity today. Jason Kirby (40:46.533) One second here. So that was that was good. But I lost my mic here and it's not letting me recover it. one second. Jason Kirby (41:04.945) Right, so it's not letting me switch back. Can you hear me okay? Alright. how's the audio sound now? Is it pretty bad? Is it quite noticeably different? But you haven't noticed it switch? It did switch to a different audio. Okay. Alright, I'll run with it and we'll see what happens. all right, so next question. You sold Brian Rosen (41:14.736) No, it's f it's been fine all along. Jason Kirby (41:31.539) So you sold the family business early in your career. What did that teach you about the timing of an exit? Brian Rosen (41:39.527) think you can time an exit at all. I think you got, I think there's the only thing you can time is you as a founder, you know if your business is going to fail or succeed long term. So from a timing perspective, if you say, hey, I'm going to sell this thing before it fails, that's one way of looking at it. Or is a timing perspective, I'm going to say a little before I'm going to sell this thing before the market fails me. So from our perspective, when I sold Sam's, I saw a little bit of the walls closing in. So I wanted to sell the business. I did not see the GFC having the impact that it did. Jason Kirby (42:14.845) And then why do so many beverage brands underestimate how difficult distribution is? Brian Rosen (42:24.11) Lack of knowledge and founders optimism. The reality is when you make a new brand, Jason, you don't make a new drinker. You just make a new brand. So you get the same number of drinkers, but you're adding brands to the to the kind of the human consciousness. And so founders underestimate that. Every time you get on a shelf, something's gotta come off the shelf to make room. And what is it going to be? There's only Just by way of example, there's only 44 linear feet on a shelf that holds 20 brands. If you're not one of the 20 brands, you're not on the shelf. So who are you going to take off? Who are you going to replace? Why should the retailer buy you over another brand? Why should the distributor buy you over another brand? Those are all things to think about before you you buy your first cork. And if you don't do that, then you really are not seeing around the corner and not understanding the business you're getting into. Jason Kirby (43:22.313) Kind of a fun question here. What's it like having three hundred million assets under management? Brian Rosen (43:29.926) It's a responsibility. That's not a fun question. That's a that's a question that I talk about with my therapist. It it's it it is it's a responsibility. We've got, you know, four hundred LPs across equity alone. And so I've got four hundred bosses, if you will, and people I'm responsible for in their capital. I take that responsibility very seriously. and so I don't look at it as fun or not fun. I look at it as I'm in the business to get to to Jason Kirby (43:32.391) Yeah. Brian Rosen (43:59.836) hopefully help LPs create wealth. And that's a responsibility. And so if you don't want that kind of sleepless night type of responsibility, then this is the wrong business for you to think about. Jason Kirby (44:14.493) What's it like having four hundred LPs? Like how do you get four hundred LPs? Brian Rosen (44:17.943) And it's but but well, you you gotta you gotta you gotta spend a lot of time in airplanes. it is it's hard. Look, it it's you know, as we've gotten bigger and more institutional, the checks have gotten bigger. So a lot of this is from early days where funds two and three mostly where we had guys writing quarter million dollar checks, and you need a lot of checks to get to $75 million fund. So That's where the LPs come in. As we've gotten bigger and more institutionalized and and and professionalized the firm based in Chicago, we've had less LPs writing bigger checks. Now the checks are five million, ten million, fifteen million. they're not fifty thousand dollar friends of friends of cousins kind of thing. That's how we started, but you can't get to three hundred million, twenty-five thousand dollars at a time. Jason Kirby (45:11.463) No, I would agree. that's why I was kinda curious, how do you ha how do you have Or under? well, Brian, it's been awesome having you on the show, sharing your insights. What would be the best way for people to learn more about you and invest better? Brian Rosen (45:24.145) Sure. I am on LinkedIn at Brian Rosen. I would say twenty thousand followers. I'm very proud of that. My daughter asks me, how do you do that? And I would say I have no idea because I'm the oldest guy on LinkedIn. but people seem to resonate with my tell it like it is attitude. LinkedIn you can find me, Investbev.com from a web perspective. And my email is Brian at InvestBev.com. So those are three easy ways to get a hold of Jason Kirby (45:56.809) Thank you, Brian. Thanks for coming on. Look forward to getting this out to our audience. Brian Rosen (46:00.337) Thanks, Jason. Appreciate it.