It’s fun to have a secret identity.
By day, I write job descriptions, interview potential hires, deal with employee issues, manage benefit packages, and keep the office lights on. On nights and weekends, I take off my HR hat, put on an apron, light the fires, and make barbecue. This past summer, my friends and I formed a competition barbecue team called Old Virginia Smoke. We took our techniques and recipes on the road, competing against some of the giants in the barbecue world. We held our own, bringing home Top 10 and Top 5 finishes for our chicken, pork shoulder, pork ribs, and brisket. The good folks here at Callahan can attest to our dedication and talent, as they’ve enjoyed the fruits … er, meats … of our labor.
We have lofty goals for the 2014 competition season, and we need money to make them happen. We debated taking out a loan to raise capital (reviewing our credit union connections for opportunities), considered 401(k) and savings balances, tossed couch cushions, and wrapped pennies.
Ultimately, we created a Kickstarter campaign. The world’s largest crowd-funding platform, Kickstarter bills itself as a “new way to fund creative projects.” People enthusiastic about films, music, art, design, and FOOD can connect with similarly interested people. Here, like minds are able to launch products, services, and companies by trading investments for rewards.
For the OVS campaign, we’re asking for donations ranging from $25 to $1,000. In return, we’re offering all sorts of rewards — stickers, T-shirts, even an in-home catered event. But to make our dreams a reality, we have to hit our $5,000 project threshold. If our pledged donations hit or exceed $5,000 by February 14, 2014, we get the money and the backers get their rewards. If we don’t, then nobody gets anything.
Old Virginia Smoke chose Kickstarter over traditional funding efforts for several reasons. We are a social media savvy trio, and we believe we can leverage our personal networks to reach our goal. A loan would either require us to officially incorporate — which we’re not quite ready to do — or ask one of the team members to solely bear the fiduciary responsibility. We had already built in the costs of backer rewards as part of our 2014 merchandising and marketing plan, and although Kickstarter takes a percentage, there are no ongoing interest expenses. Finally, Kickstarter provides a relatively short transactional relationship — a two-month request campaign followed by one month to distribute investor rewards.
Banks and credit unions are posting healthy, prosperous growth in key metrics, but borrowers are increasingly using new technology to explore alternative funding options. So keep an eye on how small businesses in your community might be using platforms like Kickstarter instead of coming to you.
Do You Know Your Competition?
Learn more about crowd funding and alternative sources of funding that are making a mark in the lending market.
Now if you’ll excuse me, I’ve got to go sauce and flip the brisket.
PS. Come be part of the team! Help a sister out and throw some scratch our way.