About 15 years ago, my grandfather passed away and left me some stock in Disney, a cuckoo clock, a stethoscope and an insatiable appetite for sweets — particularly peanut brittle.
He was a child of the Great Depression, and when he died my grandmother distributed the Disney stock to his grandchildren and the safety deposit box full of cash to his children. His insistence on keeping cash hearkened back to a time of high unemployment, food rations and two world wars.
After he retired from his medical practice, he and I would spend summer afternoons together mostly driving around Amish country stopping at Heinis Cheese Chalet and the world’s largest cuckoo clock at Alpine Alpa. He encouraged me to become a doctor because he liked working for himself and must have thought I would too. I loved my grandpa, but there was really no chance of me ever becoming a doctor — I had clearly not inherited his academic prowess. I kept the stock, partly for sentimental reasons and partly because it took me about ten years to figure out how to open an online brokerage account.
His gift was the impetus to launch my own business. It was just enough money to make me think I could start a business, but a far, far cry from paying for all the equipment, rent, utilities, permits, packaging and whatnot. There are five other people in my house and they like to eat, have heat in the winter, wear shoes and such, so I knew I had to get creative in coming up with the capital forPopped!
I discovered a website called Kickstarter through my husband, although it’s been written about frequently in the New York Times, Wired Magazine and elsewhere.
Kickstarter is part social proofing and part fundraising platform to help people generate the money to launch an idea. The site isn’t for the secretive, as it requires a detailed description, pictures, video, and web links for site visitors to peruse. Kickstarter isn’t specifically aimed at business startups looking for cash, although there are plenty of them. It’s really meant to foster creativity and sharing of ideas. Projects can range from artwork, music production, films, food, books or anything people feel passionate about. After submitting a brief project summary, the site walks you though setting up your project page where you manage your request for funding and provide updates and feedback. You can see the project I created here.
Anyone can choose to support your idea in exchange for “backer rewards.” I offered an assortment of popcorn, gift certificates, stickers and (my personal favorite) an invite to a popcorn party at the Water Street Tavern. The rewards should have some value to backers, but at the same time leave enough money left over to get your idea off the ground. I decided I wanted to raise $2,500. That sounded like a lot money. Ask for too much and you look a little greedy, ask for too little and you can’t really do much with it. The trick with Kickstarter is that it’s all or nothing. You get backed for the whole amount, or you walk away with nothing — no loss, no gain. So you have to really consider the amount and choose something appropriate. I should also mention that Kickstarter takes 5 percent, and Amazon takes another 5 percent from the total amount you raise for providing the software platform and managing your account.
My sister made a video for my project page on her computermaphone one rainy afternoon, and we posted it for the world to see. While I know that video is tremendously valuable in terms of sending a message, I still found that making it was the hardest part of the entire process. Kickstarter even gives you this big pep talk about making a video — seems I’m not the only person who considers starring in an online video ulcer-inducing. Some videos are pretty long drawn-out and glossy affairs. Mine was more of a do-it-yourself job taped in my kitchen. I have since learned to refer to anything that strikes me as homemade-looking as “authentic.” That sounds intentional and not at all related to budgetary constraints.
When my Kickstarter project page launched, it was up to me to promote it. Whatever your business goals, at some point you’re going to have to ask someone for money or publicity. I “liked” it on Facebook, I wrote a press release and sent it off to Kent Patch, I talked endlessly about popcorn and updated my Kickstarter page.
My parents backed me, some cousins and friends did too, and I exceeded my financial goal in the thirty days I had allotted. Between my grandfather’s gift, Kickstarter funds, a significant amount of family savings, and some personal credit card debt, I was able to buy most of what I needed to get started. I expect to open Popped! and fulfill all my backer rewards in the coming weeks.
Every business owner I’ve spoken with has a different story of how they paid for their businesses. Some, like Mike Mistur and Ryan Brannon, the owners of Bent Tree Coffee, opted to secure a small business loan through KRBA and the SBA. Others leveraged personal assets like their houses, and still others are running with the big dogs looking to score venture capital money through Jumpstart in Cleveland.
My story by comparison is really very traditional: I spent my savings, I inherited some money, my family and friends helped me, and someone very special believed I could do it.