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Very few entrepreneurs start a small business without dreams of growing larger. Even fewer take the financial risk of starting a business without hopes of future outside investment.
That was the case for Loudoun County’s Catoctin Creek Distillery, privately owned by Scott and Becky Harris, which accepted a minority stake investment from Constellation Brands in January of 2017. The couple used the capital to grow production at their Purcellville facility, increase marketing and create new jobs.
Prior to making that decision, they spent more than a year looking for the right investment partner, negotiating with more than a dozen potential investors.
“Gaining investment has been our plan from the beginning…[but] a strategic venture investor is more than just money,” Scott Harris told the American Distilling Institute. “The company is our baby, and we did not intend to give our baby away or lose control.
“Constellation is a big player in the liquor business, so they have been critically important in helping us find and choose the right distributors, manage our decision-making process and as a check and balance on our books to make sure everything is correctly managed. We welcome the help and oversight.”
The investment has already allowed Catoctin Creek to build a new warehouse and expand distribution from 10 to 25 states. Harris acknowledged the challenge of working through expectations and reporting financial figures to an outside entity. However, he added that the process has been better than he expected.
It’s a remarkable journey for the Loudoun entrepreneurs, who started during the heart of the recession in 2009, with funding from personal finances, an SBA loan, and help from neighbors and friends in the community.
“When Becky and I first started the company, we bootstrapped with our own life savings and used our personal finances as equity,” he said. “That creates a very stressful situation because if you fail, you lose everything.”
The Harrises have done just the opposite. Now sold in 26 U.S. states and in Europe and Asia, Catoctin Creek has won the most awards of any whiskey made in Virginia. After the addition of an investment partner, Catoctin Creek Distillery is poised for even greater success well into the future.