We hear from many small businesses that traditional financing can be challenging to obtain, or, without the right collateral it's simply not enough. Although we know some lenders are working hard to increase flexibility and close this gap, crowdfunding websites like Indiegogo and Kickstarter have become game-changers for financing small businesses. If you haven't crowdfunded before, here's how it works: You pledge a donation in exchange for a reward, like a product or special event. For a farm, you might get to choose from an exclusive CSA box offering or tickets to a farm dinner. This model has a proven track record -- some of our favorite food businesses and farms have raised hundreds of thousands of dollars online.
Crowdfunding has worked for some businesses, but not everyone can offer the right mix of rewards to entice donors. Fulfillment can be onerous, particularly for a fledgling business with unpredictable cash flow. With the limitations of a rewards-based system, it is often only useful as a supplement to more traditional financing. However, that may soon change. The proposed MNvest legislation has the potential to blow the lid off of crowdfunding in Minnesota.
In our efforts to support and celebrate vibrant, just, and sustainable rural communities, our details of our work on the ground takes many shapes.Read more