crowdfunding in the kitchen - seattle chefs collaborative national sustainable food summit 2012
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Crowd Funding In The Kitchen
Gregory Heller, Seattle Chefs CollaborativeJared Stoneberg, Lark CookbookThierry Rautureau, Rovers & Luc
Tim Crosby, SlowMoney NWArno Hesse, SlowMoney NorCal
HungrySeattle.comTwitter @HungrySeattle#NatlSum12
Monday, October 1, 12
Who’s In The Room?
• Producer?
• Restaurant?
• Chef?
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• Have you ever backed a project on:
• Kickstarter?
• Indie GoGo?
• Other Mechanism?
Who’s In The Room?
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Funding Sites
Borrowing Sites
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Chefs Collaborative National SummitOct 1, 2012
Tim CrosbyDirector, Slow Money NW
Food Investments
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Since 2009170 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 Fund
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– 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.htm
Who is an investor?• Accredited Investors
–Angels, VCs; Banks, Credit Unions, Foundations
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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)
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What is an Investment?
Bootstrap Market
Credit Cards
Friends,Family CSA Pre-PayGifts,
GrantsPurchase,
Trade
Social Return (SROI)
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Capital Continuum
Bootstrap Market
Credit Cards
Friends,Family
Lower riskLower reward
Higher riskHigher reward
Debt SubDebt
Revenue/Royalty
ConvertibleDebt Equity
CSA Pre-PayGifts,Grants
Purchase,Trade
Social Return (SROI)
Financial Return (ROI)
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Capital Continuum
Bootstrap Market
Credit Cards
Friends,Family
Lower riskLower reward
Higher riskHigher reward
Debt SubDebt
Revenue/Royalty
ConvertibleDebt Equity
| Personal |
| Investment Clubs, LIONs |
CSA Pre-PayGifts,Grants
Purchase,Trade
| Customers |
| Accreds, Angels | | VCs |
Social Return (SROI)
Financial Return (ROI)
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Crowdfunding
Crowdfunding space
Credit Cards
Friends,Family CSA Pre-PayGifts,
GrantsPurchase,
Trade
Monday, 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 less2.Raise number of shareholders before forced to go
public3.Advertise to solicit investors
- Due now
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Other Non-Bank OptionsDirect Public Offerings
–Small Company Offering Registration (SCOR)• All except Alabama (under consideration), Delaware, District of Columbia (has no securities laws), Florida, Hawaii, and Nebraska.
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Farmer Reserve Fund
Credit Union
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Farmer Reserve Fund
Credit Union
Risk
Reduced LeveragedDonation
SROI
Tech Assistance Program
20% default rate for first round
$10K deposit creates $50K loan(s)
Impact InvestorChef
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Direct Option
Credit Union
ChefRestaurant
Risk
Reduced
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Tim Crosbytimcrosby@comcast.net
slowmoneynw.org206.300.9860
Thank you
Monday, October 1, 12
Thierry Rautureau
• Funded Luc through pre-sale to ~220 customers
http://TheChefInTheHat.com
Twitter: @thechefinthehat
Monday, October 1, 12
Some Numbers2361 Projects
177 Live40% Success Rate
$9.64 Million Raised
Over 250 “Food” Projects(no specific stats available)
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All Projects
#8
$9.64 Million Successfully Raised for
Food Projects
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Successful Projects
>50% Of Successful Food Projects Raise between $1k
and $10k
#7
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Unsuccessful Projects
#9
The Ones That Fail, Fail
Big (<20% of
funding goal)
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Jared Stoneberg
LarkCookbook.com@LarkCookbookLarkSeattle.com
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Lark - Chef John Sundstrom
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larkcookbook.com@larkcookbooklarkseattle.com
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2
I was told there would be a path to
CROWDFUNDINGsomewhere around here
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Confidential © Clearbon 2012 3
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Confidential © Clearbon 2012 4
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Confidential © Clearbon 2012 5
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Confidential © Clearbon 2012 6
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Confidential © Clearbon 2012 7
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Confidential © Clearbon 2012 11
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Confidential © Clearbon 2012 12
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Resources
• KickStarter.com Blog
• FinanceForFood.com forthcoming book: Raising Dough
• SlowMoney.org
Monday, October 1, 12
http://HungrySeattle.comTwitter @HungrySeattle
Monday, October 1, 12
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