Crowdfunding could have very well been the most popular startup space in 2012. Crowdfunding startups came out of the woodwork for every industry and everybody. Even the porn industry got it’s own crowdfunding startup which we actually covered here.
One of the niche’s within crowdfuding that’s heating up right now is hybrid crowdfuding sites. These are the crowdfunding sites like SockStock and SeedVille, that fit in this hybrid space.
So what’s a hybrid crowdfuding site?
Crowdfunding sites that most people are familiar with function like Kickstarter and Indiegogo. These are sites where people can post whatever project they are working on and the crowd funds those projects. The project creators can be anywhere in the world because everything is done online.
In exchange for funding or a donation if you will, the entrepreneur getting their project or startup crowdfunded, gives the donator, or funder, some kind of perk. The more money that gets donated, the better the perk.
To us, a hybrid crowdfunding site is one that utilizes the internet for the funding but the business is local. Say you have a favorite ice cream shoppe around the corner from your home. The owner of the shoppe wants to expand but doesn’t have the money. He can go to a hybrid crowdfunding site and raise the money, and instead of sending perks in the mail, contributors can come to the local business and get their perk.
That’s exactly what Colorado startup SeedLauncher does. We got a chance to talk with SeedLauncher’s co-founder Jeromy Sonne about crowdfunding and the Colorado startup scene.
Check out the interview below.
What is Seedlauncher?
Seedlauncher is a crowdfunding site for small, locally owned businesses. Small businesses offer pre-orders on products to raise money to start or grow their business. Backers get great deals from the places they love while supporting their own local economy.
In layman’s terms, how does it work? (In other words how would you explain it to your grandmother)
Say I was a coffee shop and I needed a new industrial coffee grinder. Instead of going to a bank to get a loan I’d offer pre-orders on cups of coffee, muffins, etc on Seedlauncher. People go on and buy up our pre-orders so that I get the money I need to buy my new piece of equipment. Then, instead of paying interest to a bank, I pay back my customers with products.
Who are the founders and what are their backgrounds?
There’s 3 of us. We all went to school together at the University of Iowa before we relocated to Denver to pursue Seedlauncher. Jeromy- I have a background in sales for a meat commodity company, worked as a paralegal, and interned at Dwolla. I’m the everything but write code guy.
Dan Ambrisco- Dan is one of the developers for Seedlauncher. Dan has a strong background freelancing as well as being a C# engineer for The Swizzle (Keep Holdings)
Where are you based?
We’re located out of Uncubbed Coworking space in the LoDo neighborhood of Denver.
What’s the startup scene/culture like where you’re based?
The startup scene out in Colorado is fantastic. There’s lots of heavy hitters in the community like Brad Feld, Techstars, Sendgrid, etc. What’s really awesome though is how incredibly nice and accessible everyone is. No matter how busy they are, almost everyone is willing to take a minute and help you out if they can.
How did you come up with the idea for Seedlauncher?
Well it all started when I was in school and I wanted to open a hot dog cart to make some extra money. I got really excited and had one of my professors help me write a business plan. I then walked down to the bank and proudly presented my business plan and the loan officer literally laughed me out the front door. I was infuriated and told all of my friends. They started offering to throw in $50 to $25 if I promised I’d give them free hotdogs. That’s when the idea came to me. I approached Avi and Dan, and they got on board too.
How did you come up with the name?
We kind of mashed together Seed as in seed funding, and how the the money would help launch your business.
What problem does Seedlauncher solve?
We’re trying to solve the broken small business finance market. You can only get a bank loan if you already have assets, and we think that’s incredibly counter intuitive. In fact, there exists a $106 billion dollar a year market that’s under the table loans to friends and family to help start and grow their businesses. We’re hoping to formalize and grow part of that market.
What’s your secret sauce?
The really cool part about Seedlauncher is that we’re centered around communities. If you’re in Denver and you log on to Seedlauncher, you’re seeing businesses down the street not some guys making a watch 5 states away. It’s not only about getting a good deal, but investing back into your local economy.
Are you bootstrapped or funded?
What’s one challenge you’ve overcome in the startup process?
There’s been lots of challenges, but one in particular was getting our first group of businesses on the site. It taught me a valuable lesson though, that nothing can’t be solved by hustle. I literally printed up some flyers and walked door to door asking for business owners and pitching them. After a few days we had our first few businesses. There’s a lot to be said for being scrappy.
Who are some of your mentors and business role models?
Ben Milne the CEO of Dwolla is one of our advisers as well as my personal role model. It’s incredible how much he’s done, and I respect him a ton. Another one of our advisers is Josh Cramer who runs a high end web development firm called Cramer Dev. Josh has been there since very early on, and has always given us incredible advice and is there when we need him.
What’s next for Seedlauncher?
We’re incredibly excited, but also incredibly busy. We’re really focusing on getting as much customer feedback as possible and continuing to build the platform out to be the best tool for small businesses as we can.