After three years of operating a sizable baking business on an eight-foot table in the kitchen of Kraftsman Baking, Rebecca Masson was ready for a little more elbow room.
She's the creator and owner of Fluff Bake Bar, a company that makes cakes, cookies, cupcakes and other baked goods, and she has achieved enough success to warrant a space of her own. Masson, who uses the nicknames "Sugar Fairy" and "Sugar Hooker," stocks her products in shops and restaurants around town, but with the business growing, she needs a storefront and another employee.
Instead of turning to the bank or investors, though, Masson turned to Kickstarter, a crowdfunding website that's been gaining popularity among would-be restaurateurs across the country. Here's how the outfit defines itself:
Kickstarter is a funding platform for creative projects. Everything from films, games, and music to art, design, and technology. Kickstarter is full of ambitious, innovative, and imaginative projects that are brought to life through the direct support of others. Every project creator sets their project's funding goal and deadline. If people like the project, they can pledge money to make it happen. If the project succeeds in reaching its funding goal, all backers' credit cards are charged when time expires. If the project falls short, no one is charged. Funding on Kickstarter is all-or-nothing.
There's the catch, and the thought that sometimes runs through Masson's head as she works toward her goal: If she doesn't raise $50,000 by 10:04 a.m. on December 19, she gets nothing.
Another Houston business has successfully run a Kickstarter campaign and is continuing to reap the rewards. James Nelson and Jeremiah Tallerine solicited funding from the community a little more than a year ago in order to start their company, Bravado Spice Co. By their deadline, the duo had raised $19,117 -- 273 percent of their original $7,000 goal. The Bravado Spice hot sauces are now available in more than a dozen stores in Houston and California and are sold online.
Part of what has made Kickstarter successful is the reward system it encourages. People seeking funds set up award amounts commensurate with specific donation amounts. In the case of Fluff Bake Bar, for example, Masson has offered a reward of six free snickerdoodle, chocolate chip or gingersnap cookies and a "Sugar Hooker" sticker for a pledge of $25 to $49. For a $50 pledge, the reward increases to a Fluff Bake Bar tote bag and a dozen Fluffernutter cookies. The pledges max out at $10,000. For that much money, Masson will give a generous patron his or her very own Fluff Bake Bar cookie created by Masson and the patron, a four-person dessert tasting, an invite for two to attend a pre-opening event, a Fluff Bake Bar tote bag and a dozen free cookies each month for a year. Not too shabby.
Entrepreneurs around the country (and in England and Australia) have raised money by offering rewards for everything from a hearty-thank you to private parties to your name on the wall. Kickstarter estimates that 44 percent of all endeavors are successfully funded, but not all of them require the capital that a new restaurant does. In fact, most of the businesses seeking funding aren't restaurants. Some examples of current Kickstarter campaigns are Cartesian scarf company, which has surpassed its goal of $6,500, and Exercise Cards, which had a $3,000 goal and raised more than double the amount.
Houston hasn't seen as many restaurants rise up via Kickstarter as cities such as New York and Minneapolis have, but perhaps the trend just hasn't yet made it here. Recently, Travail Kitchen and Amusements in Robbinsdale, Minnesota, raised $255,669 for their new restaurant, even though they requested only $75,000. The team behind Travail is a well-known James Beard Award-nominated bunch, but we have plenty of nationally acclaimed chefs here in Houston, too. So why aren't local chefs Kickstarting left and right to get their projects off the ground?
One reason could be that it hasn't always been successful here in the past. In February 2013, a food truck called Der Brat Bus tried to raise $2,000 on Kickstarter to get a business up and running. After more than a month of fundraising, the chef received pledges for only $301, so he didn't get any of the money. Nothing has ever been posted on the company's Facebook or Twitter.
Another food truck, called Caveman Chow, sought to raise $30,000 last spring to launch a paleo-friendly mobile eatery. The team raised only $3,426, and as a result didn't get any funding. The company website is still up and running, but the proprietor hasn't tweeted or updated anything since June.
Masson admits it would definitely be disappointing if she doesn't meet her goal, but unlike some of these other businesses that started campaigns before they were established, Fluff Bake Bar has a definite following and a definite plan.
"I have some money saved," Masson says. "We have a plan B. We probably will either go through the bank or continue finding investors if this doesn't work."
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Bravado Spice didn't need to worry about that, but companies financed through Kickstarter still face questions from a few vociferous skeptics. A blogger in St. Louis recently listed four reasons he feels Kickstarter shouldn't be used to open a restaurant, while an article on Digital Trends discusses "The Perils and Pitfalls of Kickstarter," citing pledges that never actually come through as well as businesses that do get money but never get it together enough to churn out a product.
"There are always going to be pros and cons to everything," Masson says about the controversy surrounding Kickstarter. "I don't see the difference between using Kickstarter and going to an investor. It doesn't matter how much money people spend; they're still investing in Fluff Bake Bar. And I'm not asking them for something without offering anything in return."
In spite of some inherent issues with the model, people seem eager to donate to causes they feel are worthy. Masson has raised more than $11,000 of her $50,000, and there are still 14 days left in her campaign.
"When you work with an investor, they want to be able to go in and say, 'This is my place'," Masson says. "In my opinion, I think Kickstarter does that for the average person. Whether you give us $5, $100 or $1000, you're still a part of that. I wouldn't be doing what I'm doing without the community. They're the ones helping my dreams come true."