When Austin’s SquareRut Kava Bar opened its first location in 2011, “relaxation drinks” were a foreign but intriguing concept. The bar enjoyed early success the old-fashioned way, through a good product and stellar customer experience.
When it came time to expand to a third location in one of Austin’s hottest and most active neighborhoods, the owners decided to try something new. The local business raised $100,000 for its next location through a hot new investment concept that keeps local funds local and gives patrons an opportunity to invest in the businesses they love: NextSeed.
NextSeed is a new crowdfunding platform that makes it possible to invest funds in local businesses and see financial returns on that investment.
Crowdfunding small businesses allows consumers to invest in the places they already love. If, for example, a popular EaDo coffee shop in Houston could use a killer patio area to serve its new extended menu, the shop can figure the cost and, with NextSeed, finance that cost with the help of its patrons.
As the business booms from the upgrade, investors see a financial return on what they’ve invested. Investing in the community is now a real alternative to savings accounts and stocks for people wishing to see financial gains.
As with popular crowdfunding platform Kickstarter, NextSeed investors can receive rewards at different levels, based on how much they invest. But with Kickstarter, the final reward is really the finished product itself, if that ever makes it to completion.
NextSeed’s reward is financial return. Investors receive monthly payments from the businesses they supported.
NextSeed carefully reviews every deal before presenting an opportunity to investors on its website. Those businesses are presented live on the NextSeed website, where investors can get straightforward information about each offering and choose which business is the best fit for their financial visions. With NextSeed, the resources needed to start investing are available online in a one-stop, user-friendly platform.
So who can invest? Anyone, now. With recent changes to Texas legislation, anyone can help finance a good idea. You don’t need deep pockets to contribute, and that’s the power of the concept. By offering smaller portions of the pie, it’s easier for everyone to get a piece. Supporting local business then becomes a community effort.
Houston business owner Simon Nguyen was the first to successfully close an offering with NextSeed. His goal was to enhance his hair salon, Hair Revolution, with an expanded product line and hair shows.
His investors were promised a financial return, and he added perks like gift cards for hair styling and VIP makeovers and parties. Giving investors VIP access to his business allowed him to connect with the community that supported him.
For NextSeed chief marketing officer Abraham Chu, the secret to Nguyen’s success and satisfaction with the crowdfunding platform is community.
“What’s important is that business owners often have trouble getting financing, and even if they can get it, it’s a one-way relationship with an institution,” Chu says. “Instead of just borrowing from an institution that only cares about getting a monthly payment and doesn’t support the business otherwise, [Nguyen is] inviting people from the community to invest and feel a sense of bond and commitment to his business and his success.”
Nguyen appreciated the free public relations aspect of the campaign. As buzz about his involvement with NextSeed grew, Nguyen found a community invigorated with enthusiasm for the potential of his hair salon. He quickly reached his financial goals and now is profiting from renewed interest in his salon. The salon remains under his ownership, and he’s able to fulfill agreements made to investors from his expanded community.
Although NextSeed’s crowdfunding aspect is new, community involvement harks back to a more down-to-earth approach to doing business. Houstonians are empowered to invest a range of dollar amounts to boost local bars, restaurants, salons, and other places they are passionate about. With NextSeed, local investors can make their money work for them and their communities.
For more information on this new crowdfunding platform, and to see which of your favorite businesses have active campaigns, visit NextSeed.
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Any views expressed in this article reflect the personal views of the author only for discussion purposes and should not be viewed as investment advice or recommendation, and does not constitute any legal or tax advice with respect to any securities.
SquareRut Kava Bar's new location on Barton Springs Road in Austin is now open, after successfully crowdfunding on NextSeed.
Chefs Felipe Botero and Alain Verzeroli are this week's guests.Photo by Alex Montoya