Good news for food entrepreneurs who have amazing ideas for innovation but not the funding or sales-savvy to make them happen. Crowdfooding – a platform that connects food entrepreneurs with investors – is aiming to be the one-stop shop for food and drink entrepreneurs, through providing an investment matchmaking service that helps startups to raise the capital they need to develop their businesses or a Food Crowdfunding platform on which they can sell their product.
Crowdfooding, itself a startup, is still at an early stage of development, having recently completed its first £10k funding project with Chocothon, an initiative that aims to create a shared value platform for a more sustainable Ghanaian cocoa supply chain. It has a mission of “bringing together food entrepreneurs, passionate foodies and established food organizations to create meaningful relationships and foster food innovation.” The recipe? Offering both crowdfunding and mentoring for startups, a platform for sales, startups scouting, and facilitating open innovation for corporates.
What if You’re Not Investment Ready?
“We started the platform with the idea that raising capital was the biggest struggle for food startups, and that connecting them with the relevant investors through equity crowdfunding was the best approach,” said Alessio D’Antino, CEO, and Co-founder of Crowdfooding. “We quickly learned that most entrepreneurs who have approached us were simply not ready for equity crowdfunding. Either they were struggling getting their first sales in, were often tied to one distributor without any perspective to scale, had very little following and engagement on social media, or just didn’t know how to handle their marketing. In other words, we realized a good chunk of them were not investment ready.”
“That’s why we decided to also introduce reward crowdfunding as a way for startups to validate the market, build a community of early adopters and wrap their head around their marketing strategy and messaging,” he continued. “We certainly acknowledge that crowdfunding isn’t just a way to raise funds, it’s a real marketing exercise that requires strategic thinking, creativity, time and full dedication. Startups are not only creating a much more engaging relationship with new customers and building up their brand identity but most and foremost, gaining more credibility towards future potential investors.”
As a result, since February 2017, startups have been allowed to simply sell products on the platform, through what Crowdfooding call the ‘sales booster.’ “The goal is to help very early stage companies who may not even have an e-commerce website, to drive their first sales, or to provide an extra sales channel to the more established startups, where they can have the flexibility to test and validate new products with our community of foodies,” D’Antino concluded.
Must-Try Listings
For Millennials in particular, or anyone who loves food exploration in general, the startups listed will have you in full must-try mode with listings like Mindful Bites – For Those Of Us Who Want To Snack With Intention (don’t we all?), Onist – Buy One Give One, and Nix & Kix – A Little Heat, A Lot Of Happiness. Wavey Ice – The Original Boozy Ice Pop – is the most recent addition to the startup list with a launch on the 4th May.
Beyond the highlighted campaigns which you see when entering the site, you can search other campaigns, by selecting the category or by using other criteria.
How It Works
Investor sign up is free, and once registered they have access to all the campaigns, can ask entrepreneurs questions, and then, when they find a campaign that resonates, support through either making a pledge for a reward or buying products from that company. When the campaign closes backers, who have made pledges get notified and will receive the rewards they have pledged for when they are due. In the case of equity investors, when the campaign closes, they become legal shareholders by signing all legal documentation via Crowdfooding’s digital signing system and then receiving share certificates and updates online or offline from the company. While it’s free to make a pledge, there is a 2% fee charged to investors for direct investments into a company listed on the platform.
For startups, reward-based crowdfunding on Crowdfooding offers a tool not just to raise funds, but also to pre-sell products, recruit new customers and test and validate the market potential by allowing prospective backers to pre-order their rewards. They also aid in setting up the campaign with an achievable funding target. Fees are 5% of any funds received + payment fees.
“Equity-based crowdfunding is more suitable for scale-up startups that are a bit further down the development road,” said D’Antino. It is made easier on Crowdfooding via technology that also streamlines the investment process, allows engagement with a community of financiers, and helps in onboarding investors. An Investment Committee reviews applications, and Crowdfooding will get in touch with selected companies only. Once a startup passes the vetting process, comprehensive material on the enterprise and a short video pitch to commence the fundraising campaign, is required. Via a pre-campaign Crowdfooding then helps to validate whether crowdfunding is a suitable option by collecting expression of interest from investors before officially kicking off the campaign. Completion fees are £2,000 which covers administrative work undertaken on completing a campaign, including the execution of shareholder agreements and payment processing.
For corporates, Crowdfooding provides startup scouting services to help them identify opportunities for collaboration based on their brief, and match them up by leveraging their proprietary database that today counts more than 3,500 startups globally. Whether startups are making delicious snacks from surplus food like Snact or ToastAle, a free-from-nasties drink range like Uglydrinks or innovative compostable packaging like Tipa, Crowdfooding’s team will tap into its extensive international network to find the most appropriate match for their client and help them assess their opportunities for collaboration.
Gail is a Chicago-based food scientist who writes for leading US and European food and technology publications. A devotee of all things shiny, electronic and buzzing, with a passion for building on-line communities and conservation, she is an entrepreneur and founder of a sustainability and social media startup who moonlights on weekends as DJ Moongirl on Moonalice Radio. Clients range from rock bands and media companies to high-tech startups.
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I am interested in offering my services as an editor and translator for people wanting to self-publish cookbooks or have them published by a commercial publisher. I have been a professional food-writer for 40 years, in the United States and the United Kingdom, as well as in Cyprus and Israel. I have written 20 or so books (look me up on Google). I was also a staff writer on several food partworks, for Orbis and Time-Life, and I am contributor to the Oxford Encyclopedia of Food and Drink. I convert U.S. recipes to UK measurements and style, and vice versa. I self-published three cookbooks (two of them translations from French).
I sort of feel like a Debbie Downer here, but I just do not see the need for making the crowdfunding space one that is niche specific. However, you just never know and I guess we’ll learn more as it grows.
There is a lot to be said about crowdfunding. For the most part it works great, but I am wondering what difference this company can do just because of the fact that it focuses on the food truck industry?
I think it works for the right business, but like Snapmunk has pointed out in the past, the campaign has to be created in the right way to draw the funding in.
Oh boy. Not to sound cynical, but are we going to see a play on words for every single new startup that comes around?