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Black Rifle Coffee seeks to help veterans, but finance and law firms deemed it a ‘reputational risk.’
From Today's WSJ.No one from a top law school who would work for a firm that represented a company with the word "Rifle" in it's name? HA!HA!
"You might call Black Rifle Coffee Co. a socially conscious enterprise. “This is a veterans’ corporation,” founder and CEO Evan Hafer, a former Green Beret, says in a Zoom interview. More than half of Black Rifle’s employees have served in the military or are family of veterans. In 2021 the company put $5.3 million in shares toward starting the BRCC Fund, a charity dedicated to helping wounded or traumatized veterans and their families. That was on top of $1.2 million in charitable contributions and $3 million worth of coffee and related products to active-duty military and first responders.
But Mr. Hafer says Black Rifle struggled to find banks and law firms to help it arrange an initial public offering. Since he founded the company in 2014, companies have told him that it was “too irreverent” and poses “reputational risk.”
You can see why Black Rifle wouldn’t be everyone’s cup of tea. Its blends include AK-47 and Silencer Smooth, and its social media presence is colorful, to say the least. The company’s YouTube channel features a shooting contest that ends with Mr. Hafer trying to get a bull’s-eye after taking a direct shot of bear spray to the eyes and a video titled “Could You Be a Pregnant Man?” Mr. Hafer’s personal politics have also drawn outrage from the media—he voted for Donald Trump twice—as has the company’s popularity with some controversial figures on the right. Kyle Rittenhouse was photographed wearing a Black Rifle T-shirt. But none of this seems to have hurt the company’s revenue, which reached $233.1 million last year.
Mr. Hafer thinks the numbers should be evidence enough that Black Rifle’s reputation isn’t a material risk. But his company “started hitting a lot of resistance” from high-level finance companies and law firms, although they claimed they were interested in working with veteran-run corporations.
In 2019 and 2020, a Black Rifle spokeswoman says, company leaders were talking to Chase, Bank of America and Macquarie Group about raising capital. After initially showing interest, all three companies declined to work with Black Rifle, citing the company’s image. In 2018 Black Rifle had tried to open an account at a Chase branch in San Antonio and had been turned away over reputational concerns. The spokeswoman says that Macquarie was particularly fixated on the name of its in-house magazine, Coffee or Die, which covers military issues and won the Military Reporters & Editors Association’s 2022 journalism contest for overseas coverage.
Bank of America and Chase declined to comment. Macquarie said in an email: “We take into account a broad range of factors in making financing and investment decisions. We do not comment on confidential commercially sensitive discussions, including those that did not move beyond a very preliminary stage like this one.”
Black Rifle hit similar roadblocks in 2019 and 2020 with Skadden Arps, Latham & Watkins and Simpson Thacher & Bartlett. All three law firms passed on working with the coffee company because of its image. According to the Black Rifle spokeswoman, Latham & Watkins said that its reputational risk committee thought no one from top law schools would be willing to work at the firm if it took on Black Rifle as a client, especially because its name included the word “rifle.” The name “is an homage to the service rifle,” Mr. Hafer says. Like the guns he taught special-operations soldiers to shoot, he says, coffee is “lifesaving equipment.”
Simpson Thacher declined to comment. Skadden Arps and Latham & Watkins didn’t respond to requests for comment.
Despite these obstacles, Black Rifle is thriving. The company went public in February through a special-purpose acquisition merger with SilverBox Engaged Merger Corp and this summer rolled out marketing partnerships with the Dallas Cowboys and Amazon Prime Video.
Yet Mr. Hafer worries what the seemingly arbitrary treatment he experienced will mean for other veterans. “I think it’s going to be really important for those guys—men and women both—to understand, these are the types of doors that are going to be slammed in your face if you’re not conforming to a very specific narrative,” he says. “I don’t want them to go through some of the same issues that we’ve had to go through to get access to capital.”
Ms. Keller is an assistant editorial features editor at the Journal.
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