Food and crowdfunding: a winning combo, right? Actually, many food-related campaigns fail. On Kickstarter, for example, just 25% of crowdfunding campaigns for food-related projects are successful.
Food ventures can get lost on big platforms like Kickstarter and Indiegogo, where tech gadgets, video games and art projects rule. And many food entrepreneurs are not prepared for the rigors of running a crowdfunding campaign, says Cheryl Clements.
With PieShell, her six-month old rewards-based crowdfunding platform, Clements (pictured above) is trying to change those dynamics for food entrepreneurs. PieShell is one of just a handful of crowdfunding sites that focus on food and beverages. And Clements has built a generous heaping of upfront advice and handholding into the process to position entrepreneurs for success.
Though it is a rewards-based site today, Clements plans to eventually expand into investment crowdfunding under the JOBS Act.
Since it officially launched in October 2016, PieShell has helped raise $70,000 for seven ventures, including two campaigns that are currently live. One example is Austin’s Underdawgs, which raised $25,000 to buy a recreational vehicle to tour the country serving hotdogs and raising awareness and funds for people with Downs Syndrome.
Another 29 food ventures are in the pipeline, says Clements, who works out of Spacious, a coworking space in New York’s Chelsea neighborhood that, fittingly, is run out of Michelin-starred restaurant La Sirena.
She sees two distinct types of ventures using the platform: food startups looking to raise up to $15,000, and restaurants with bigger capital needs of $75,000 to $100,000.
Clements, a former software project manager with a soft spot for food, raised money for her venture on GoFundMe—raising over $13,000 of her $10,000 goal back in 2013.
At the time, the platform was called Fundafeast. Last fall, she changed the name to PieShell, in honor of the pie shop her mother started in the family basement when Clements was growing up in Ontario. The Pie Shell, as it was called, was a family affair— her mom and brother baked the pies and Clements and her father packed and delivered them.
Clements credits the experience with teaching her not only the ins and outs of running a food business, but also how communities grow around food. “For me, the name (PieShell) symbolized what we were about,” she says.
Stepping Stone approach
Clements takes a hands-on approach with entrepreneurs. One thing she noticed was that many entrepreneurs were asking for too much money. So she devised a “stepping stone” approach to help them determine exactly how much they need and break it down into a series of three goals—the bare minimum needed for a very specific goal, a stretch goal, and the “dream” goal.
“It makes them really look at their business,” says Clements. “It also educates contributors, who often have no idea what’s involved.”
Austin’s Underdawgs, for example, met its first stepping stone goal of $25,000, allowing it to buy its RV. It didn’t, however, reach more ambitious goals that would fund a retrofit the vehicle and and marketing expenses.
Unlike some all-or-nothing platforms, the stepping stone approach allows entrepreneurs to keep the money they raise for meeting each successive funding goal.
On PieShell, a surprising 40% of contributors choose to forgo their rewards
All of the PieShell campaigns have been successful in meeting at least their minimum goal so far. One—Erika Kerekes, the founder of Not Ketchup, a line of all-natural dipping sauces—reached her third stepping stone of $15,000. The money will allow Kerekes, who was recently diagnosed with Type 2 diabetes, to create a new line with no added sugar.
PieShell takes 6% of successfully raised funds. The site donates 1% of that fee to the nonprofit Emma’s Torch, which provides culinary training for refugees.
PieShell has another interesting feature. Clements believes that contributors care more about the story behind the food venture than the rewards. Plus, spending $10 to ship a $5 jar of jam does not always make economic sense. That led her to include an “I don’t want the rewards option” on PieShell. Her instincts proved right: 40% of contributors choose that option.
Like the seasoned project manager she is, Clements has an exacting plan laid out for PieShell—her own stepping stones, if you will. “In two years, we’ll have a mobile app and international presence and will move into investment crowdfunding,” she says. In five years, PieShell will have its own fund to invest in food ventures.
Ambitious, for sure. But as Clements says, “I missed all the memos where I wasn’t supposed to start my own business. It’s just how I was raised.”