If you’re going to buy the hype, at least read the fine print

For years, BrewDog invited fans to become "Equity Punks." Not just customers. Owners. Across seven crowdfunding rounds, roughly 220,000 investors poured in about £75 million (that's more than $100 million).

Now, as BrewDog explores a sale or break-up, many Punks may be staring at a zero return, and they are not happy about it.

"Well at least I got £2.34 off an order once. Not a bad return for £500," wrote one online. Another told the BBC, "I invested £12,000 in BrewDog - I think I've lost it all."

Not because the rules changed. But because the rules were always there.

In 2017, private equity firm TSG invested and reportedly secured preferred shares with a liquidation preference. Translation: TSG gets paid first. If a sale price doesn't exceed what TSG is owed, common shareholders, the Equity Punks, get nothing.

That's not villainy. That's just basic capital structure.

And believe me, given BrewDog's track record of harassment and other employee mistreatment, I'd love to lay the blame here at their feet. But this outcome flows from the documents, not from some last-minute sleight of hand.

The investment risks weren't hidden. Early prospectuses warned that Equity Punk investments were speculative, illiquid stock and that investors could lose everything. They also disclosed the company could later issue shares with rights senior to existing holders. By 2017, the documents were clearer still: preferred shares already sat ahead of common stock and could reduce B shareholders' returns (the Equity Punks) in a sale to zero.

Yes, TSG came later than many early investors. But timing doesn't control priority, the investment documents do. Early common shareholders typically agree the company can issue later preferred shares with superior rights. If that authority existed (and there's no indication here that it didn't) then nothing was retroactively taken. The risk was embedded from the start.

Preferred equity sits at the top of the stack. Common sits at the bottom. It enjoys the upside if things soar. It absorbs the loss if they don't.

Add several years of losses and declining sales to the mix, and the math becomes unforgiving.

Separate from the capital structure is the company's broader arc: a brand that began white-hot and later struggled amid criticism about leadership, culture, workplace practices, and a toxic culture. Whether that drove the decline is debatable. The preference stack is not.

The fine print tells you who gets paid first. If you don't read it, that's on you, not the company.