The food truck phenomenon that started in Los Angeles wasn’t just a flash in the pan. The food and restaurant industry is always evolving, and food trucks are an affordable point of entry into the industry. Independent operators can jumpstart their F&B venture and connect directly with their customers. What’s been amazing is the ability of top food trucks to rally and mobilize a fan base to follow the truck around the city instead of the truck chasing the crowd.
But there comes a time when one food truck isn’t enough. If you’re turning down catering opportunities because you can’t be in multiple places at once, or your line is insane and you need a bigger kitchen to meet demand, maybe it’s time to expand your fleet or open a physical restaurant. But traditional financing options are limited – banks usually require more collateral than what food trucks can offer. These days, savvy F&B operators build on their homegrown success and harness their popularity to take their business up a notch by crowdfunding. They’re able to welcome their fan base as investors, crowdfunding the chunk of cash they need to grow (all the while drawing in new potential customers!).
When Cinco TacoBar decided to open a new, larger location in the San Francisco East Bay, the owners felt confident. Their 800-sq. ft. location was on track to hit $1 million of revenues within the first year, and they had strategic partnerships to help them with the new location. Rather than seek private investors and sell ownership shares of their business, the founders took a different approach. They believed that community is what makes the food and beverage experience great. So, they decided to try something that got them additional funds for their build-out while also generating buzz and creating new supporters.
Cinco TacoBar raised a $200,000 business loan through investment crowdfunding in just 6 days. Nearly 150 individuals invested in a business they were excited about, with their funds going to the renovation and build-out of Cinco’s second location.
They did this on NextSeed, a new crowdfunding platform that makes it easy for food and beverage businesses to raise funds and reach out to new customers in their area. Cinco got in front of thousands of potential new customers, using their campaign to convert their investors into advocates.
Due to recent changes in law, small businesses can now raise funds from the public on approved crowdfunding portals. NextSeed was the first SEC-approved investment crowdfunding portal to offer this new type of fundraising nationwide and has raised over $3 million for various concepts since 2016. But this is more than just an investment – people want to connect with their local businesses and be a part of something awesome.
What may be surprising about crowdfunding on NextSeed is that businesses don’t have to give up equity ownership in the process. Instead, they’re offering debt investments (it’s like selling bonds instead of stocks). NextSeed helps with the entire process – from legal filings, advising on the pitch and creating the campaign materials, to providing marketing and PR support during the campaign, and handling the repayments and investor relations after the campaign is over. The engaging nature of investment crowdfunding helps to keep your business top-of-mind with your supporters. Investors enjoy the chance to earn financial returns, plus unique bonus rewards like special events, invitations and discounts, so they can bring friends along for the fun – all because they’re invested in your success.
Although NextSeed is new, community financing harks back to a more down-to-earth way of building a business. Now, you can harness the power of the crowd in an exciting way to boost your business to the next level while capturing attention and creating avid supporters.