Crowdfunding website pilot tests in Austin

Sep 13, 2013
Austin Business Journal

Austin businesses have a new source of expansion-stage capital

Boston-based crowdfunding website Equity Endeavor LLC has selected Austin as one of its two pilot testing sites. The other is New Orleans

Equity Endeavor is similar to the hugely popular Kickstarter — but different. Instead of a strong focus on creative projects, Equity Endeavor is geared toward small businesses seeking $5,000 to $45,000 for improvement or expansion projects, said co-founder Eric Sonnier, a University of Texas graduate

For example, an independently owned hair salon looking for some capital to open a cross-town location or a coffee shop planning to build an outdoor patio

The Austin portal already lists four local investment capital campaigns, including one from Freestyle Language Center, which plans to raise $12,500 to create additional courses

It has raised $955 with reward packages that provide investors with goods and services in exchange for their capital. The packages range from $20 to $500

Sonnier said Equity Endeavor’s approach is based on the difficulty of motivating distant investors to contribute to brick-and-mortar locations in Austin because they don’t get the benefit of an improvement or expansion project

“Crowdfunders cannot really redeem their rewards if they live outside of a 50 mile radius,” he said. “We push experiences, services, discounts, pre-sales — we focus on rewards that are low marginal cost to the business.”

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