Your Business is Essential

We realize what a challenging time this is for restaurants and other small businesses owners. While many businesses were deemed “non-essential,” we know that YOU are essential. You’re essential for your families, your employees, your customers and your community.

How Can We Help?

While EIDL and PPP are starting to run dry, this has led us to partner with Localstake to create a streamlined process for businesses like yours to tap into your community for capital and share returns based on the amount of revenue you generate. 

What Chance of Success Does This Have?

While the stock market was collapsing, the markets which create access for anyone invest in local businesses was more active than they’ve ever been.  We can’t predict the future, but for now it appears that community members are rallying together around businesses they love, know and trust to keep their communities strong.  This is why we partnered with Localstake to create an alternative path to capital called a revenue share that makes your community financially vested in your success.

COVID-19 Revenue Share for Businesses

If your business qualifies you pay

$0 upfront, 5% on funds at close, & can have a raise targeting up to $250K running in ~7 days.

Does my businesses qualify?

In most cases, businesses will have to meet at least the following to qualify:

  • Have 12 months of trailing revenue and can show loss of revenue during this time
  • Specifically it is designed for businesses in the restaurant, food and beverage industries
  • Looking to raise capital via a revenue share loan

Is this as complex as an Fed or SBA loan?

It’s much simpler.  The questions that the EIDL, PPP, Disaster Assistance and other loans (…will they be grants???)…etc. bring up seem complex.  An Rev Share is simple.  You the business owner are asking for investment from people who love, know and trust you.  If you raise capital, you pay your investors back based on actual revenues.

  1. Generate revenue
  2. Share with your investors how they can help increase revenue (this increases their chances of getting a greater return earlier)
  3. Return their investment + the return you define e.g. Invest $100 and your investor gets $150 (1.5x) returned over a period of time if your business is successful. 

 

Funding Process: The entire investment process is handled digitally.  You get a campaign page you share with your fans (potential investors). Once you hit the target minimum amount in your campaign (e.g. $25K), the funds roll into escrow and into your business bank account.  Funds continue to roll in as committed investors digitally sign their docs and transfer their funds.  Localstake handles the deal doc signing and funds transfer on your behalf.  If your business fails, your investors loose money.  If your business generates revenue, everyone is paid!  Your community is invested.  Mobilize them!

So tell me more about how a revenue share works and when I pay investors

Unlike a traditional term loan where you have to pay a fixed interest and principal payment over a specific term, payments on a revenue share loan are based on a percentage of revenue earned (usually between 2-10%). This can provide flexibility when revenues are down during seasonality or unexpected shocks to demand like we are experiencing now. No personal guarantees are required for the revenue share loan.

 

Example Terms / Offering to Your Fans: You may be able to offer your community of investors a 1.5x return over a 5 year period by:

  • returning $0.05 to them for every $1.00 in revenue
  • initial repayment to investors starts 1 year from the investment date
  • repayments after the initial are paid once a quarter. 

All unpaid interest will accrue based on the revenue share of the business offered to investors.  A fan investing $100, would expect to be repaid $150 by the end of the 5 years and if your actual revenue exceeds overall revenue projections, they get paid back in less than 5 years.  If you miss overall revenue projections, it will take longer to pay them back and different than a fixed % loan, you’ll also pay less in seasonality of lower revenues.

I’m completely new to this.  How do I go about this?

Successful campaigns generally include compelling reasons for why someone may want to invest in you, combined with a targeted marketing campaign to get the word out. For founders who qualify for the COVID-19 Rev Share, CrowdfundNC aims to increase a founder’s odds of a successful raise by advising on Investor Campaign preparation.

CrowdfundNC

Pro bono Investment Marketing Bootcamp: We’re holding recurring Investor Marketing Planning 101 boot camp sessions, providing founders access to tools typically only made available to paid clients.  For many founders, this boot camp should be sufficient to help them determine how successful their raise may be.

Pro bono education on other considerations: Benji Jones from Innovate Capital Law is partnering with us to provide education to businesses around other things they should consider as part of raising capital before they dive in.

 

Additional Help: If founders need additional help beyond the 101, CrowdfundNC’s net 30 fees are discounted by 50%.  We will also offer deeper discounts if 2 or more businesses are willing to work in founder cohorts together and will consider other fee concessions on a founder by founder basis.

What if my business doesn’t qualify?

For other founders who don’t qualify for the COVID-19 Revenue Share, but have still been impacted, other concessions from both CrowdfundNC and Localstake may be granted on a case by case basis.  As business owners too, we promise to work alongside you towards an equitable option.

What does the process look like to get launched?

Once you sign up Localstake will review your company’s information and help you prepare an offering profile and investment documents. You’ll be able to direct your contacts and social media campaigns to the profile so people can review the terms of the investment, sign documents and transfer funds.  We will work with Localstake to make sure once founders are approved for the COVID-19 Revenue Share program, that they have access to the 101 boot camp sessions provided ASAP.

Get Started

$0 Upfront Fees | 5% Upon Close | ~7 Days to Launch
for companies who meet the criteria