Hey Stranger, Help Me Start a Business
Funding the next wave of food start-ups
While stuck inside their New York City apartment last winter, Caroline Mak and her boyfriend, Antonio Ramos, were craving a ginger beer and decided to try making one at home. Soon they were fooling around with experimental soda flavors like grapefruit-jalapeño-honey and cucumber-lime–sea salt and testing them out on friends. After realizing the sodas were legitimately good, they decided to see if they could take their business pro.
The Brooklyn Flea (the go-to place in New York for vendors in the new cottage food economy) gave them a spot. And so they found themselves with a business opportunity and no capital or commercial equipment. They hustled to find a way to raise money, says Mak. Which is where Kickstarter came in.
Similar to the microfinancing idea behind websites such as Kiva.org, “crowdfunding” sites like Kickstarter and IndieGoGo allow people to pledge any amount of money, small or large, to help fund someone’s soda business, art project, film, or other creative endeavor. Over time, tens or hundreds of small pledges become enough to fund the business. It’s an alternative way of raising start-up capital that is becoming popular with young entrepreneurs, who have well-established online social networks. “The economy definitely affected our decision [to try Kickstarter], because I lost my primary job last year,” says Mak. “We were both under 30; we weren’t the best of candidates for a business loan. But I also liked the DIY aspect of it.”
Mak and Ramos emailed their proposal for Brooklyn Soda Works to Kickstarter, and within a day their project was approved. They posted a mission statement that outlined how the funds they raised on Kickstarter would be spent (“an industrial juicer, kegs, CO2 tanks, regulators and a freezer”), and defined the “rewards” for funders: People who pledged $10 or more would receive a coupon for two free sodas; $25 or more would get four sodas or a tote bag and a soda-flavor-themed mix CD (root beer is bluesy, ginger lemon is summery tunes, etc.); $50 or more, a tote bag, the mix CD, four sodas, and a hand-printed recipe card. They had a target of $1,500 and 40 days to meet the goal—Kickstarter runs on an all-or-nothing model. Meet (or exceed) your goal and you get the money. Don’t meet it, get nothing, move on. Sponsors are only charged when and if the goal is met.
THE MASSES LOVE FOOD
Kickstarter launched over a year ago. While it is intended to fund any sort of business, food projects do especially well, says Yancey Strickler, one of the site’s cofounders, succeeding 66 percent of the time, when the site average is about 50 percent. “It is the category we are most excited about,” he says. “It’s something we can all experience and understand.”