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Crowdfunding In The Kitchen - Seattle Chefs Collaborative National Sustainable Food Summit 2012
 

Crowdfunding In The Kitchen - Seattle Chefs Collaborative National Sustainable Food Summit 2012

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Crowd-funding in the kitchen: non-traditional financing and funding for your food-related project ...

Crowd-funding in the kitchen: non-traditional financing and funding for your food-related project

Small business owners have found it difficult to access tradition financing from banks over the past few years. An increasing number of them, including chefs and value added producers, have turned toward crowd funding to put together the capital necessary to start or expand their businesses. From food trucks to fine dining, a variety of different models have been successfully employed. What’s worked? What’s flopped? We’ll discuss with our colleagues who have gotten help from the crowd to fund their projects. Whether by Kickstarter or pre-sale of discounted goods or gift cards, crowd funding builds on the familiar concept of Community Supported Agriculture (CSA) and takes it to the next level. Moderated by Gregory Heller, Seattle Chefs Collaborative. Presenters include Tim Crosby and Arno Hesse, both of Slow Money, chef Thierry Rautureau of Luc and Rover’s restaurants, and Jared Stoneberger of the Lark Cookbook Project.

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    Crowdfunding In The Kitchen - Seattle Chefs Collaborative National Sustainable Food Summit 2012 Crowdfunding In The Kitchen - Seattle Chefs Collaborative National Sustainable Food Summit 2012 Presentation Transcript

    • Crowd Funding In The Kitchen Gregory Heller, Seattle Chefs Collaborative Jared Stoneberg, Lark Cookbook Thierry Rautureau, Rovers & Luc Tim Crosby, SlowMoney NW Arno Hesse, SlowMoney NorCal HungrySeattle.com #NatlSum12 Twitter @HungrySeattleMonday, October 1, 12
    • Who’s In The Room? • Producer? • Restaurant? • Chef?Monday, October 1, 12
    • Who’s In The Room? • Have you ever backed a project on: • Kickstarter? • Indie GoGo? • Other Mechanism?Monday, October 1, 12
    • Funding Sites Borrowing SitesMonday, October 1, 12
    • Food InvestmentsChefs Collaborative National SummitOct 1, 2012Tim CrosbyDirector, Slow Money NWMonday, October 1, 12
    • Since 2009 170 enterprises, $20 Million 14 Local Chapters 7 businesses secured investments of just under $4 million Direct investments of loans, equity, lease-to- own equipment purchases Business development and technical assistance 34 WA and OR based enterprises received business development / technical assistance, connections Farmer Reserve FundMonday, October 1, 12
    • Who is an investor? • Accredited Investors – Angels, VCs; Banks, Credit Unions, Foundations – A bank, insurance company, registered investment company, business development company, or small business investment company; – An employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million; – A charitable organization, corporation, or partnership with assets exceeding $5 million; – A director, executive officer, or general partner of the company selling the securities; – A business in which all the equity owners are accredited investors; – A natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person; – A natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year; or – A trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes. Source: www.sec.gov/answers/accred.htmMonday, October 1, 12
    • Who is an investor? • Non Accredited Investors – Wall Street, Mutual Funds, Credit Unions, IRAs – Emerging Community Capital efforts • Crowdfunding • Investment Clubs – Regulated vehicle; pools funds • Local Investment Opportunity Networks – Non-regulated; networks ‘friends’ – Customers – Friends, Families (and Fools)Monday, October 1, 12
    • What is an Investment? Credit Friends, Gifts, Purchase, CSA Pre-Pay Cards Family Grants Trade Social Return (SROI) Bootstrap MarketMonday, October 1, 12
    • Capital Continuum Credit Friends, Gifts, Purchase, CSA Pre-Pay Cards Family Grants Trade Social Return (SROI) Bootstrap Market Sub Revenue/ Convertible Debt Equity Debt Royalty Debt Financial Return (ROI) Lower risk Higher risk Lower reward Higher rewardMonday, October 1, 12
    • Capital Continuum | Personal | | Customers | Credit Friends, Gifts, Purchase, CSA Pre-Pay Cards Family Grants Trade Social Return (SROI) Bootstrap Market | Accreds, Angels | | Investment Clubs, LIONs | | VCs | Sub Revenue/ Convertible Debt Equity Debt Royalty Debt Financial Return (ROI) Lower risk Higher risk Lower reward Higher rewardMonday, October 1, 12
    • Crowdfunding Credit Friends, Gifts, Purchase, CSA Pre-Pay Cards Family Grants Trade Crowdfunding spaceMonday, October 1, 12
    • Crowdfunding Regulation Jumpstart Our Business Startups Act (JOBS Act) 6 bills in one act, main parts due next year - Don’t hold your breath Of Interest: 1. Regulated crowdfunding 1. $10,000 or 10% of income per investor, whichever is less 2. Raise number of shareholders before forced to go public 3. Advertise to solicit investors - Due nowMonday, October 1, 12
    • Other Non-Bank Options Direct Public Offerings – Small Company Offering Registration (SCOR) • All except Alabama (under consideration), Delaware, District of Columbia (has no securities laws), Florida, Hawaii, and Nebraska.Monday, October 1, 12
    • Farmer Reserve Fund Credit UnionMonday, October 1, 12
    • Farmer Reserve Fund Tech Assistance Program Risk SROI Credit Union Reduced LeveragedDo nation Impact Investor Chef 20% default rate for first round $10K deposit creates $50K loan(s)Monday, October 1, 12
    • Direct Option Risk Credit Chef Union Restaurant ReducedMonday, October 1, 12
    • Thank you Tim Crosby timcrosby@comcast.net slowmoneynw.org 206.300.9860Monday, October 1, 12
    • Thierry Rautureau • Funded Luc through pre-sale to ~220 customers http://TheChefInTheHat.com Twitter: @thechefinthehatMonday, October 1, 12
    • Some Numbers 2361 Projects 177 Live 40% Success Rate $9.64 Million Raised Over 250 “Food” Projects (no specific stats available)Monday, October 1, 12
    • All Projects $9.64 Million Successfully Raised for Food Projects #8Monday, October 1, 12
    • Successful Projects >50% OfSuccessful Food Projects Raise between $1k and $10k #7Monday, October 1, 12
    • Unsuccessful Projects The Ones That Fail, Fail Big (<20% of funding goal) #9Monday, October 1, 12
    • Jared Stoneberg LarkCookbook.com @LarkCookbook LarkSeattle.comMonday, October 1, 12
    • Lark - Chef John SundstromMonday, October 1, 12
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    • larkcookbook.com @larkcookbook larkseattle.comMonday, October 1, 12
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    • I was told there would be a path to CROWDFUNDING somewhere around here 2Monday, October 1, 12
    • Confidential © Clearbon 2012 3Monday, October 1, 12
    • Confidential © Clearbon 2012 4Monday, October 1, 12
    • Confidential © Clearbon 2012 5Monday, October 1, 12
    • Confidential © Clearbon 2012 6Monday, October 1, 12
    • Confidential © Clearbon 2012 7Monday, October 1, 12
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    • Confidential © Clearbon 2012 11Monday, October 1, 12
    • Confidential © Clearbon 2012 12Monday, October 1, 12
    • Resources • KickStarter.com Blog • FinanceForFood.com forthcoming book: Raising Dough • SlowMoney.orgMonday, October 1, 12
    • http://HungrySeattle.com Twitter @HungrySeattleMonday, October 1, 12