Crowdfunding sites such as Kickstarter and Indiegogo have helped numerous food truck owners meet their financial needs to start up their own mobile food business. Due to this success smaller, niche sites have begun to see success as well.
Entrepreneur Alex Sheshunoff researched which verticals made the most sense for a new crowd funding site and determined the food and beverage sector was the route to go. At that point he launched FoodStart.
Foodstart is a community-funding platform designed just for food trucks and independent restaurants. Through their crowd funding platform your friends, family, customers – anyone – can use their Amazon.com account to back your mobile food business in small increments (i.e. $50 or $1,000).
In exchange for their capital, backers receive perks and rewards such as food discounts, their signature on your truck, cool swag, menu items named after them – whatever you choose!
Sheshunoff’s found that people were hungry to fund projects that they could have a real-world connection with, bridging their digital and physical lives. Taking a page from the popularity of things like Groupon that do just that, FoodStart seeks to help food trucks and other food service businesses to connect with their customers and secure capital at the same time.
FoodStart is currently offering a seed match of $1,000 – the basic requirement is to raise at least $5k from at least 20 different people, and they will add $1,000 to your project.
How it Works:
If you’re reading this page you probably got an email or Facebook post from a friend saying that a new restuarant or brewery was opening up nearby. Like every business, these guys need money to get started or expand. And they see lots of benefits for getting it from friends and friends of friends than the office of a mega-bank.
Here’s what to do next:
1) Review the business plan. Does it make sense? Do you think they have a shot at it? If so…
2) Look at the perks they’re offering and decide how much you want to put in. It might be $10 for a long-term discount on desserts or $250 to have a menu item named after you.
3) Submit your pledge (not an actual payment since the business only gets the cash if they’re funding goal is reached) using your Amazon username and password.
4) Tell your friends about the cool business your backing.
5) Assuming you’ve told enough people about it and they reach their funding goal, you’ll get an email in your inbox and a Ownership Card in the mail. Whenever you go to the business, just present your card and redeem whatever great perks you’ve earned for being an early backer in the business.
For business owners the process is really straightforward. But you’ll need a few things to get started, including a bank account, a working phone, and a business that’s in the food-and-beverage industry. Assuming you got those covered, you simply need to
1) Upload your pitch. You might need capital to buy equipment or even your truck. Whatever the purpose, the first step is to post the plan for your project.
2) Pick the Perks. People who are backing you need to get something in return. It might be a cash discount. It might be a free dessert or the backers name on the truck’s wrap. Whatever combination of perks you have available, they have market research to help guide you.
3) Tell folks to check it out. Build buzz by telling people about your new project – they have the tools to help with this too.
4) Execute. For Start up Food Trucks: Assuming your funding goal has been met, cash will be deposited directly to your business bank account (less a 2.9% credit card fee and 4% processing commission.)
For Expanding Mobile Food Businesses: Even if you’re goal hasn’t been met, when your campaign deadline is reached Foodstart will deposit the funds that have been raised into your account (less a 2.9% credit card fee and 4% processing commission.)
And now, unlike your competition, you have hundreds of local residents who have an incentive to see you succeed!