So I’m doing a little crowd funding micro-loan for Chautauqua Soap and Candles, and I would like your support. You may be asking yourself, “Why the hell should I help you?” Good question. I have a few reasons for you to entertain. Maybe one or a few of them appeals to you.
Here is a link to my micro-loan campaign: https://zip.kiva.org/loans/13470/i/my1j and note that this is a loan. I will repay you.
1. You like me and want me to succeed. Every once in a while someone tells me I’m a nice guy. Maybe you concur.
2. You believe in what I am doing. I am making soap and candles from organic and natural ingredients and selling them in my community. This provides the opportunity for residents and tourists to enjoy a high-quality product while supporting the local economy and a process that has less of a negative environmental impact.
3. You dig local. That’s cool. I dig local too. I strongly believe that we need local in our economy.
4. You dig handmade stuff. I make all the products myself, and it is a labor intensive process. I think it makes a great product that is full of character.
5. You owe me. Remember that time I gave you a couple bucks and then you never really tried to pay me back? Come on and help me out before karma shows up and bitch slaps you.
6. You think manufacturing is important. Right now, I make everything on a small scale, but I have large aspirations. I would love to have a larger production facility that could crank out a bunch of awesome soap, candles, and other products. Helping me make this next step will push my production scale larger.
7. You hate me and want me to find a little success so that when I fall it hurts more. Well, I feel bad that you feel that way about me and get happiness out of other people’s failures, but I will still take your money.
8. You think local finance is an important part of our community’s resurgence. I totally agree with that and is a big reason why I am doing this.
I want to expand on this point a bit because I think it is incredibly important to Jamestown’s future. Personally, I see the area’s economy turning around, and it is great to see people taking risks to start businesses and business like projects. I love it, and I love being a part of it. One of the big hurdles that our local economy will face is access to capital. It’s a huge struggle for businesses anywhere and in almost any time in history.
With this funding project, I hope that I can help spur interest in local investing and develop a community of like-minded individuals. If you are like-minded, please consider contributing to my campaign. If you can’t financially contribute, please consider emailing this blog post to a few friends or sharing it on Facebook. Also, use the contact tab on this web site and send me a message letting me know that you support me and the local economy. It would mean a lot to me.
Again, here is a link to my campaign. If you have any questions about this or anything else I have discussed on my blog or in real life shoot me a message.
[If you want to read a denser post that I wrote about financing, law, and junk you can read below.]
Over the last few months I have found myself researching soap making and making a lot of soap. It has been great. What’s better is that as I make my soap, it sells. Most of it has been selling at the lovely BioDome Project in downtown Jamestown. It’s been wonderful and I appreciate everyone’s support thus far.
With growing demand for my soap I have found myself pouring more and more of my resources into soapmaking. I am excited to be doing this, but I have hit a bit of a wall and this wall comes from the curing time associated with making soap. It takes 6-8 weeks for a batch of soap to be ready for sale. When you pair this with trying to increase production and purchasing larger quantities of supplies to save money, funds run thin quite quickly. In the last couple of years, I have done a ton of research on different financing options in hopes of being in a situation some day where business was growing fast enough to warrant outside funding. That day came a little quicker than I anticipated. I knew I wanted to do something where I would get a little bit of money from many different people, crowd funding. I looked at Kickstarter and its competition, but thought that I would like to try something different. Then I stumbled upon Kiva Zip. I have been a fan and participant of Kiva, which crowd sources micro-loans to upstart entrepreneurs throughout the developing world. Kiva Zip is basically the American version of Kiva. KIva is a non-profit and does some incredible work. The loans that are made through Kiva Zip are 0% interest loans.
It would be easy to assume that Kiva Zip manages 0% loans because they are a non-profit and they want to help better by not charging interest and that the people who make the loans want to see good things happen, so they don’t want to charge interest either. That makes sense and could be part of their reasoning, but there is a much larger reason why Kiva Zip doesn’t manage loans that charge interest. IT’S ILLEGAL. That’s right. In the good ole’ capitalist society of America it is illegal for Kiva Zip to have an interest rate above 0%. The basic fact that you need to know is that it is illegal for me as a business owner to publicly solicit funds for investing in my business or giving me a loan. There is one exception on the investor side of this and that is if you are what is called an “accredited investor” which means that you make over $200,000 a year or have a $1,000,000 net worth. This is how companies like LendingClub and Prosper exist. The other exception is on the company side. The company would have to issue a public offering. The most well known public offering is the Initial Public Offering that companies make when they are added to the New York Stock Exchange. The other is a Direct Public Offering. They are becoming more popular in the local economy movement. They have been used to start a department store in Upstate New York, buy a ski resort in Vermont, and do real estate development in Minnesota. Oh, and it helped launched Ben & Jerry’s ice cream. The problem with DPOs is the fees. Its expensive because you need lawyers to fill out paperwork and the business owner will have to do some extra work. It really only makes since if you are looking to borrow over $500,000.
So why aren’t the laws changed? It would be easy to get into a rant about how the government is pro wall street and against the little guy and in this instance it definitely is that way. A little optimism came a few years ago when President Obama signed the JOBS Act, specifically Title III, AKA the Crowdfund Act. It is suppose to loosen regulations around crowdfunding, so everyday Americans can invest and profit from the small businesses of America while small businesses gain access to new investment opportunities. It’s the only part of the law to not be enacted and is stuck in Congress.
So anyway, I am hoping that this little experiment with Kiva Zip can help develop a network of people that are interested in the local economy and believe that we can pull ourselves up by our own bootstraps. As the economy changes (and hopefully laws) we can be in a position to take advantage and help our neighbors realize their entrepreneurial dreams.