Matt Breese
Most capital that enters the whiskey industry chases the obvious thing: barrel appreciation. Buy low, hold, sell into a rising market. That model worked well for a decade. It is working considerably less well now.
Venture First took a different approach from the beginning. Based in Louisville, the firm built its whiskey practice around lending rather than speculation, around working capital solutions for producers rather than barrel funds chasing price curves. The result is a model that has held up through the current correction precisely because it was never dependent on the boom continuing.
We spoke with Jack Hellige, VP of Funds and Transactions, about how Venture First entered the category, what they built, and why the industry needs more of it.
The gap that started everything
Venture First's path into whiskey began not with an investment thesis but with a practical observation. The firm had been providing fractional CFO, FP&A, and valuation services to growth-stage companies when regional exposure to distilling clients put them at the table during financing conversations. What they found was consistent and striking.
Brands needed working capital. Barrels were real, appreciating assets with established markets. And yet traditional lenders would not touch them.
"Traditional banks didn't understand the whiskey barrel market. It was underbanked and niche."
That disconnect, observed repeatedly while supporting names like JW Rutledge and Southern Distilling through capital raise efforts around 2017 and 2018, became the foundation for Whiskey Capital, the firm's private credit fund focused on direct lending to producers.
What Whiskey Capital actually does
The fund's structure reflects the same conservatism that identified the opportunity in the first place. Roughly 80 to 85 percent of activity is direct lending, primarily on younger or new fill barrels. A smaller portion involves selective barrel exposure purchased on balance sheet at investor request for future client use. Speculative plays on barrel pricing are not part of the model.
"We've always been lenders first. About 80 to 85 percent of what we do is credit. A small portion is reserved for barrels, only because that's what some investors asked for."
The fund works directly with brands and distillers, not intermediaries. That direct relationship gives the firm flexibility that more intermediated lenders cannot offer, including the ability to structure deals creatively when a situation requires it.
Their first loans were originated in 2018, well before the market ran. That timing matters.
"We didn't jump in when things were hot. Our first loans were in early 2018. This is a cyclical industry, and we plan to be here through all of it."
Building something institutions would trust
Whiskey lending is a credible investment thesis. Communicating that to institutional capital is a different challenge entirely. Venture First addressed it directly, partnering with Steve Campbell, a former Lazard managing director, to build a fully regulated GP/LP structure with a comprehensive PPM and risk frameworks designed to withstand institutional scrutiny.
"You can't walk in looking like you're shooting from the hip. You've got to be buttoned up, regulated, and speak their language."
The resulting structure targets double-digit cash yields with downside protection, offering institutional investors exposure to an asset class they had largely been unable to access in a properly structured form.
A full financial stack, not just a fund
Whiskey Capital is one dimension of Venture First's presence in the category. The firm also provides full-service financial support to brands at various stages, including fractional CFO engagements, financial planning and analysis, and barrel valuations that hold up to FDIC and Big Four audit review.
For early-stage brands, that means access to a complete finance team at the cost of a single hire. For institutions and lenders evaluating the category, it means independent third-party data with no conflicts of interest baked in.
The data advantage
One of the more underappreciated aspects of Venture First's position is the data set they have built over seven-plus years of active lending and valuation work in the category. Grounded in proprietary barrel transaction records and supplemented by industry sources including IWSR, KDA, and DISCUS, it represents a view of the market that is difficult to replicate from the outside.
"We place the most weight on what's actually occurred. This isn't modeled market fluff. We track real transactions, inventory, and capacity."
Because the firm's business model does not depend on elevated barrel valuations, that data carries a different quality of signal than analysis produced by parties with a stake in the numbers.
For a deeper look at how this approach shapes their lending and investment philosophy, their piece What Is My Barrel Worth? is worth reading.
Growing the ecosystem, not just the book
Venture First's longer-term ambition extends beyond their own fund. The goal, as Hellige describes it, is to help build liquidity and transparency across the whiskey finance ecosystem, through bank relationships, support for other funds, and cleaner pricing signals for the broader market.
Their invitation-only February summit, which brought together more than 30 brands for a closed-door state-of-the-market conversation, reflects that orientation. This is a firm that understands the category grows faster when the financial infrastructure around it improves.
The takeaway
Patient capital is rare in any asset class. In whiskey, where production timelines are measured in years and market cycles can turn faster than barrels mature, it is especially valuable. Venture First has spent seven years building the kind of financial partner the industry needs but rarely finds: one with genuine sector fluency, institutional discipline, and a business model that does not require the market to keep going up.
Learn more at Venture First and Whiskey Capital.