A tiny Canadian ski resort forged by Scandinavian miners chasing an 1890s gold rush has become the unlikely recipient of a record equity crowdfunding raise, tapping into powder hounds’ quest to fend off a wave of consolidation led by Vail Resorts Inc.
Investors are lining up to buy a piece of Red Mountain Resort in Rossland, British Columbia, drawn by its rebellious pitch of “Fight the Man, Own the Mountain.” The web-based campaign, the first by a ski resort, appears to have struck a chord with skiers anxious about a flurry of acquisitions that has put 39 resorts in the hands of just three corporations.
“Consolidation sometimes has the potential of stripping the soul and heritage out of these old-school resorts,” says Howard Katkov, chief executive officer of Red Mountain Ventures, who’s publicly taken jibes at the purpose-built villages and ubiquitous clock towers found at resorts like Vail and Whistler Blackcomb. “It’s about preserving what we consider an endangered species.”
Kelly Ladyga, a Vail spokeswoman, said the company welcomes innovations, including Red’s, which provide more choice to skiers and foster vitality in the industry.
On the first day of its Canadian fundraising in August, Red drew pledges for C$508,500 ($394,000), the largest single-day amount for an equity crowdfunding campaign in the nation, according to Sean Burke, chief operating officer of FrontFundr, the online investment platform in Canada. As of Tuesday, it had raised C$455,050 with an additional C$530,800 in process.
Heavy Powder
Ahead of its U.S. launch, it had received more than 3,500 reservations for as much as $13.3 million -- 12 times the annual maximum permitted under U.S. regulations. The campaign is set to close on Dec. 1 and has set a minimum target of C$1.5 million for the offering to close.
Red has more to offer than hype.
Western Canada’s oldest ski resort is legendary among powder hounds for steep, long runs that have groomed national team racers and Olympic champions, including Nancy Greene and Kerrin Lee-Gartner. Located in eastern British Columbia’s Kootenay Rockies, just miles from the Washington and Montana borders, it boasts 300 inches of snow a year that’s dry and light.
Red’s fabled roots stretch back to Norwegian miner Olaus Jeldness, who arrived in the area in 1896 following the discovery of a massive vein of ore on Red mountain named Le Roi. Jeldness, who’d set a world record by ski jumping 92 feet at the age of 15 in his homeland, enthralled local townspeople hurtling down the hill on 10-foot long wooden skis with only a single leather strap to hold them in place. Within a year, he organized Canada’s first ski race -- a 2.5-kilometer free-for-all from the summit, beating his lone rival by five minutes.