Crowdfunding is “the new black” when it comes to food startup fundraising. Everyone from jam makers and picklers to wanna-be food truck operators and bakery owners are jumping on the crowdfunding band wagon. Not only are crowdfunding giants like Indiegogo and Kickstarter helping food startups launch and grow, but crowdfunding platforms (both equity and non-equity) are popping up, too, all aimed at helping food entrepreneurs grow their businesses faster and smarter.
When Cheryl Clements mulled around the idea of starting a food product startup in 2013, she naturally turned to crowdfunding to help bootstrap her business. But what she found was a lack in the market for a food-specific crowdfunding site. She was flabbergasted that the growing foodie community didn’t have its own dedicated platform, she tells me. So instead, she decided to become the conduit for other startups to turn their big food ideas into real businesses and set to work building fundafeast.
Launched in Feburay 2014, the NYC-based food-focused crowdfunding site now has three active campaigns and is looking to scale quickly. Its business model is similar to Kickstarter and Indiegogo’s rewards-based crowdfunding models, except the site has a “Keep It All” policy, which means that startups can keep anything they raise, minus the site’s 4 percent fee.
fundafeast also offers mentorship to each startup on the platform, including planning meetings with fundafeast staff, as well as services from partners for things like website development, legal help and product design guidance, at little to no cost. Differentiating itself from Kickstarter and Indiegogo, fundafeast’s community is made up entirely of food-loving folks who are excited about innovative food projects and are looking to support socially responsible food startups, Clements tells me.
I caught up with Clements by email to chat more about fundafeast’s differentiating factors, the challenges her team has faced since launching and her plans for growth. Our interview has been edited for brevity.
Cheryl Clements: The building of the fundafeast community, coupled with our mentorship, is the main differentiator from other food-focused sites. We actively participate in conferences, events, trade shows, LinkedIn groups, and even Twitter chats, to ensure that our audience reach is continuing to grow. In just 2-1/2 short months, we already have more than 2,000 Twitter followers, with over 500 in just the past 15 days! Our direct competitors have only about 600 Twitter followers combined. Our followers and network know that we are 100 percent there for them, and that we are passionate and care about them and what they are doing.
We also are actively forming partnerships with various individuals and companies in the food, drink and crowdfunding industries to provide a support system for our users. We want to ensure that campaigners with modest ambitions are provided the greatest opportunities for success.
FTC: What challenges have you faced with gaining food startups and funders, and how do you plan to overcome them?
CC: By making the decision to grow the business organically, one of our challenges has been letting potential campaigners know that we are here and ready to support their campaigns. By being active in the same networks mentioned above (food + drink conferences, trade shows, Twitter chats, etc.), we have already seen a dramatic increase in interested campaigns in just the past few weeks compared with when we launched on February 1, 2014. Our network is passing us around like a favorite recipe, and we are loving it.
Another challenge we face is the lack of understanding about crowdfunding as a whole, and the work involved to create a successful campaign. This is very important to us, because we want our network to be able to trust that we are providing them wonderful campaigns with individuals that are willing to do the work. We are focusing on the three areas below to overcome these challenges:
FTC: How do you plan to scale?
CC: fundafeast keeps a very critical eye on itself to quickly identify growing needs and expand our team and community where needed. We have been incredibly fortunate with the number of individuals that have and are currently volunteering their services because they believe 100% in what we are doing. Utilizing those talents and skills for web development, social media and brand management, just to name a few, allows us to focus on other areas and helps ensure that we provide the best platform possible for our startups and funders.