For Becky Ramos, a U.S. naval officer stationed in Hawaii, the appeal was having a very personal way to connect with and help people. “I don’t have a lot of time, but I might have similar ideas. I can live it through their eyes and be part of it.” Though she lives nowhere near Akimenko, she still supported his butcher shop. “It was something I believed in. I wanted to show my little bit of appreciation.”
Will the idea of the masses vetting and shaping someone’s business plan with their dollars prove to be a consumer bane or benefit? “The consumer can be both the demander and the supplier,” says the Cellar’s Kahane. “If you want to see a live band in my space, chip in $20 to help me pay for them.” Will we soon be in the position where a restaurant susses out whether customers really care about tablecloths or Riedel wineglasses by seeing if they are willing to help pay for them?
THE WISDOM OF CROWDS
For some businesses, using a crowdfunding site might not be worth the bite it will take out of the profits. Anthony Myint, founder of the cult-followed, San Francisco–based pop-up restaurant Mission Street Food, successfully raised $12,505 for kitchen equipment to outfit his soon-to-open nonprofit restaurant Commonwealth. “It seemed like a good avenue for raising [capital] without selling off too much ownership. [But I’m] not sure if it was worth the 5 percent fee, since we have enough of a following that we could have publicized fund-raising through alternative means.”
And how do you know someone’s not buying himself piña coladas on a beach in the Bahamas with the $20 you gave him? Both IndieGoGo and Kickstarter will pull down suspicious projects if there are any red flags, which is very rare.
Brooklyn Soda Works’ Mak says that knowing there are 75 people out there who backed her business with their hard-earned money gives her a sense of obligation.
“I think if we had done the more conventional route, taking a loan, we probably would have called it quits after a year,” says Mak. “But we should keep going, because people will be like, ‘What happened to Brooklyn Soda Works? I have their tote bag and I haven’t redeemed my coupons!’”