I am advising most of my food entrepreneur clients to consider crowdfunding to fund their small food businesses. Why? Well as an angel investor friend of mine told me "I need to make 10 times my investment in 3 years… so there are many great businesses that are not fundable because of this".
Crowdfunding's sweet spot is for businesses from pre-revenue up to about $1 Million, the kind of business that are consistently overlooked by traditional investors.
So as part of the ProHatch Experts group I am pleased to showcase their first food business on the ProHatch Crowdfunding Platform.
I interviewed Leilani & Kalani's founder Shay Stewart on their new crowdfunding campaign.
Why did you select Hawaii for your first Location?
The Leilani & Kalani location strategy is being based in a warm tropical climate which reduces the impact of seasonality on consumption and Honolulu fits within our strategy.
A small cup of gelato often costs $4 dollars or more, and that's without the toppings of organic whipped cream, sustainable strawberries and bittersweet chocolate chunks. So, with about 800 gelaterias operating in the United States and none operating in the legendary tourist zone of Waikiki we saw this as an opportunity [… additionally gelato has the highest proﬁtability per square foot in the food retail trade.]
Why did you select crowdfunding to launch your business?
With the business environment changing rapidly and the impact social media has with how we "connect" and we chose the platform to reach our audience accordingly. The amazing thing about crowdfunding is that it is a collective effort of individuals who network and pool their money via the Internet.
The crowdfunding concept is all about the collection of funds through small contributions from many parties, to finance a particular project or venture. Being based in New York or Los Angeles is no longer a requirement in searching for capital. The ways one can create ideas and get support for those ideas are changing right before our eyes. This is an amazing time to be an entrepreneur.
And why ProHatch over the other platforms?
After 3 months of researching hundreds of crowdfunding platforms, we chose ProHAtch, a platform certified by the Crowdfunding Accreditation for Platform Standards (CAPS). This program is an initiative by Crowdsourcing.org to promote the adoption of best practices for the operation of crowdfunding platforms globally. Out of the 2,329 platforms, ProHAtch is one of 36 accredited by Crowdsoucing.org.
I know you have a business plan and many entrepreneurs do…however a crowdfunding campaign is different. Can you tell us some of the components that differ greatly?
Firstly is the transparency created through ProHatches Phase to Raise process through their defined steps of 30 day funding cycles Build, Broadcast, Fund and Deliver Approach (You can see the details in this ProHatch Phase to Raise Video)
The other difference is the full time commitment to creating social word of mouth, community support and the "why" the public should support your concept.
It's a laser focus on networking, conveying your message to the "crowd" and pushing the envelope creating awareness about your idea and concept. Effective branding does not happen on it's own.
What were your challenges creating a crowdfunding campaign?
At Leilani & Kalani we have challenges on many fronts: gelato is relatively new to some Americans so creating a crowdfuninding campaign requires:
· Understanding the impact of social media
· Updating posts regulary
· Developing a sharp design & layout for your overall presentation
· Listen to what the crowd is telling to you
· Constantly stay active before, during and after your funding cycles
Can we go through the steps in your campaign briefly so readers can see what is necessary to create campaign?
· Create effective business plan… this is in operating a successful business regardless of the industry or product.
· Create a website. This is your calling card and how else can they locate your contact information?
· Locate a crowdfunding platform that suits your needs. Leilani & Kalani reviewed over 500+ crowding funding platforms before we came to the decision of selecting our friends at ProHatch.
Since this is not Equity Crowdfunding rewards are… well… the reward for donating. So how did you develop your crowdfunding rewards?
The rewards we selected are unique to Hawaii. Leilani & Kalani simply cannot ship gelato to project backers (due to the sheer cost of keeping out product at a specific low temperture). We decided to choose items that are representative of our core values (having a near-zero environmental impact) and to bring the best of Hawaii to project backers like gourmet honey roasted macadamia nuts, old fashioned pineapple hard candy and fun products for the sun, surf and sand.