How Athletic Brewing Raised $223 Million to Craft a Nonalcoholic Beer Worth Drinking

No one walked away from Point72 Asset Management, Steve Cohen’s famed hedge fund—at least not voluntarily. Bill Shufelt became the exception.

“I had a career I never anticipated leaving,” says Shufelt. “I didn’t even think about having a LinkedIn.” But the trader, whose job required multiple client dinners a week and who’d been feeling the sluggish toll of social drinking before giving up alcohol altogether, became fixated on an idea he couldn’t shake: creating a better nonalcoholic beer that people would actually want to drink.

He spent two years crafting a business plan for a company powered by a vertically integrated supply chain and marketing blitzes that aimed to change skeptical consumer attitudes about booze-free beer. His decision to quit his cushy hedge fund job in 2017 required some serious discussions with his wife, Jackie. The couple poured their savings into what became Athletic Brewing, but Shufelt and his co-founder, John Walker, quickly learned their manufacturing budgets vastly underestimated their actual costs. The CapEx-heavy startup needed more cash to get off the ground.

Athletic began as a bootstrapped vision: Use the Shufelts’ savings to float the co-founders and build the first brewery. Once the facility was operational and the co-founders had a more concrete plan, Shufelt and Walker would seek outside capital. That did not quite happen.

“I thought I had a really nice clean budget and operating model and everything,” recalls Shufelt. “The old adage everything takes twice as much money and twice as long is probably an understatement.”

Before the nonalcoholic craft beer maker had a functional brewery, let alone a product to taste, it needed to raise cash. Shufelt and Walker started pitching their nonalcoholic concept but faced rejection after rejection. The entrepreneurs took 120 meetings before convincing 66 investors to join their angel round, which was led by Shufelt and Jackie. From the start, Shufelt says, they were careful to make sure the group aligned with their goals and long-term timetable. That meant being brutally honest about their actual chances of gaining traction with consumers. 

They “really believed in what we were doing and wanted to see it happen,” says Shufelt, but it was still “a really very high probability of failure investment.”

With an initial injection of outside capital, Athletic finished constructing its brewery, and its four-person team got to work. Shufelt handled sales, marketing, and finance, while Walker and his assistant brewer focused on operations. The startup onboarded one other person to help with packaging. By mid-2018, the beer launched commercially, and by the end of that summer, the brand started seeing real sales momentum. 

“Six months into business, all the charts started going vertical,” recalls Shufelt, who hired two more employees to handle the uptick. “Our marketing and grassroots efforts started to hit.”

To keep pace with growing consumer demand, Athletic needed to ramp up inventory and purchase additional food safety equipment, so Shufelt and Walker tapped their investor pool for a bridge round. 

Less than a year later, Athletic expanded its cap table and raised a Series A round led by TRB Advisors, Tastemaker Capital, Toms founder Blake Mycoskie, and its angel investors. Shufelt says, “We were very lucky to face so much rejection early on,” because all of that practice helped refine their pitch. 

The startup used the $3 million to ramp up its sales efforts and expand its Connecticut brewery that Shufelt says “everyone told us we were wasting our money on. We would never fill.” By the summer of 2019, Athletic doubled its size. Within three months, the beer brand outgrew its space again. Demand kept outstripping Athletic’s production capacity, but the co-founders made a point not to contract its beer-making out to other breweries. Everything stayed in-house and onshore. Shufelt and Walker saw that strategy as a durable competitive advantage, but it was a costly one.

“Everything was way more expensive than we could have predicted,” says Shufelt, who ended 2019 with about 26 employees, including the startup’s first sales reps. “Most companies start outsourcing all that stuff from day one, and John and I made a really intentional decision to outsource almost nothing.”