From opening a store to upgrading equipment, area businesses are turning to online crowdfunding platforms as an alternative revenue source for large projects.
As opposed to large loans or investments, crowdfunding involves smaller contributions from many donors who often get a reward in return. The Internet has ramped up this fundraising method with online platforms such as GoFundMe, Kickstarter and IndieGogo.
Businesses often use crowdfunding for infrastructure purchases. Machina Arts, a Keene-based arts and events company, launched an IndieGogo in 2017 that raised more than $10,000 to buy audio equipment, lighting and a stage to host events at The Hive, a co-working space at the Hannah Grimes Center for Entrepreneurship in Keene.
Country Life Restaurant on nearby Roxbury Street, which specializes in vegetarian and vegan cuisine, started a GoFundMe campaign in August for $10,600 to cover two major upgrades: the kitchen’s fire-suppression system and the air conditioning system. As of Thursday, the campaign had raised $4,115.
Orchard Hill Breadworks in Alstead has held multiple crowdfunding campaigns, including one for a stone mill that wrapped up earlier this month and collected more than $14,000, outpacing its goal by nearly $2,000.
That campaign was through The Local Crowd Monadnock, a platform hosted by the Monadnock Food Co-op. Unlike GoFundMe and others that are run by the public, people interested in using TLC Monadnock have to apply and get approval for a campaign.
Jen Risley, the TLC Monadnock program manager, said crowdfunding is an underutilized tool. It’s especially helpful for businesses considering a new product or project, she said, since the platform is also a way to gauge customer interest and support.
TLC Monadnock’s platform also provides companies with a critical piece of information, Risley said: email addresses.
“I know a lot of our smaller businesses don’t have a way to communicate with their fans. They’re using Facebook only and don’t have their emails,” she said, noting that social media isn’t guaranteed to last forever.
Risley said she encourages entrepreneurs to have a goal for the number of donors, in addition to the amount of money they want to raise. First-timer contributors can easily become new customers.
It’s important for businesses to fully understand their project or goal, she added, because “if you’re not sure what you want to do, it’s going to be hard to ask the community.”
Some startups raise money online to get their doors open. Last spring, 148 people donated $18,640 to Post & Beam Brewing to help it open in Peterborough a couple of months later.
And an Easthampton, Mass., man recently launched campaigns on Kickstarter and GoFundMe this week to open an artists’ space in downtown Brattleboro.
Daniel Chiaccio said he was inspired after watching a friend successfully raise money through Kickstarter for a similar printmaking venture. With an established network of friends and supporters, Chiaccio launched his campaign a month ago for First Proof Press, a community printmaking studio that he hopes to open in January.
His fundraising goal of $12,000 will buy equipment — such as a spray booth, tempered glass and lighting — renovate the space and cover expenses for hauling the equipment to its new home. Since his business will use a membership-based model, Chiaccio also hopes some of his donors will join the studio.
Without online crowdfunding, Chiaccio said he’s not sure how he’d get the capital to open his studio, adding that he likely couldn’t “just go around asking all my friends.” In that case, he said, he might have to turn larger social events or art openings into fundraisers, which doesn’t feel authentic.
He’s using traditional methods, too, with a small-business loan from a bank, but it’s not enough to cover the equipment he needs.
“I’m doing my best to have backups, but I’m definitely relying on that Kickstarter coming in,” Chiaccio said.