SHINING A LIGHT ON CREATIVE FINANCING

Transcription

1 SHINING A LIGHT ON CREATIVE FINANCING

2 MISSION CHEESE - SAN FRANCISCO, CA $244,000 Family/Friends Founder $ Microloan Crowdfunding

3 BLEATING HEART CHEESE - TOMALES, CA $248,000 Whole Foods Loan Kiva Zip ROBS

4 MAKER S COMMON - BERKELEY, CA $885,000 Direct Public Offering Credibles? Founder $ SBA? Equity?

5 OLYMPIA PROVISIONS - PORTLAND, OR $3,325,000 Family/Friends SBA Loan #1 Equity SBA Loan #2

6 DONATION CROWDFUNDING Crowdsourced donations in exchange for perks (e.g. Kickstarter, Indiegogo) Average successful food campaign: $16, % success rate for food projects Pro: Free money! Pro: Create/stimulate your customer base Con: Fulfillment is incredibly time consuming SARAH DVORAK, MISSION CHEESE

7 WHOLE FOODS LOCAL PRODUCER LOAN PROGRAM Loan program available to producers that Whole Foods wants on their shelves Up to $100,000 (max for startups is $25,000) 5% loan with 5-year payback Pro: Faster alternative to an SBA Loan Pro: Comes with built-in marketing support Pro: Gets your products on Whole Foods shelves Con: Have to provide some matching funds SEANA DOUGHTY, BLEATING HEART

8 WHOLE FOODS LOCAL PRODUCER LOAN PROGRAM SEANA DOUGHTY, BLEATING HEART

9 R.O.B.S. (ROLLOVER FOR BUSINESS STARTUPS) Owners can use retirement $ to pay for startup costs Pro: Tax-free early withdrawal of retirement $ Pro: No debt or interest burden Con: Company to be funded must be a C-corp Con: Requires attorneys to handle complexities Con: Using your retirement as working capital! SEANA DOUGHTY, BLEATING HEART

10 DIRECT PUBLIC OFFERING State-approved offering that can be advertised publicly Can raise $1,000,000+ from anyone (not just wealthy) Pro: Offering is very flexible (debt, equity, rev share) Pro: Build army of evangelists that care about success Con: Difficult to do w/o an existing network of fans Con: Have to manage many investors Con: $15,000-25,000 in legal fees OLIVER DAMERON, MAKER S COMMON

11 DIRECT PUBLIC OFFERING OLIVER DAMERON, MAKER S COMMON

12 CREDIBLES (PRE-PURCHASED CREDIT) Customers prepay for food/beverage to provide working capital Customers receive credit for more than they paid (ie. $110 redeemable for $100 purchased) Pro: Fulfillment is easy (app-based) Pro: Can be ongoing; some are unredeemed Con: Not as popular as Kickstarter or Indiegogo, so less traffic to their platform OLIVER DAMERON, MAKER S COMMON

13 PARTNER & PRIVATE EQUITY Finding owner-partners to share startup costs Aligned interests & clear vision are key Pro: Business only pays out if profitable Pro: Surround yourself w/ complimentary talents Con: Relationships can suffer and/or fail Con: Your decision-making power is diluted ELI CAIRO, OLYMPIA PROVISIONS

14 SBA LOAN Government backed commercial loan Can get up to $5,000,000 Pro: Typically lower rates than regular bank loan Pro: ~80% of loan guaranteed by federal gov Pro: Don t give up ownership Con: Owner contribution must be 10-20% of total Con: Lengthy, arduous diligence process Con: Approval rate is low for new businesses, especially those in the food industry ELI CAIRO, OLYMPIA PROVISIONS

15 HOW THE HECK DO YOU DECIDE WHAT S RIGHT FOR YOU?

16 START WITH PRIMARY FACTORS How much do you need? How fast do you need it? What types of capital can you afford?

17 THEN CONSIDER SECONDARY FACTORS Is your business a startup or already established? Are you willing to give up some control? Are you looking to grow/diversify your community? Do you want someone to help you stay on track? What is your risk tolerance?

18 QUESTIONS! Sarah Dvorak - sarah@missioncheese.net Oliver Dameron - oliver@makerscommon.net Seana Doughty - seana@bleatingheart.com Eli Cairo - elias@olympicprovisions.com