After a successful investment crowdfunding campaign, Murray Hillbilly co-owners Rafaella DeGracia and Lindsey Cooper are excited about what the future holds for their business.
“We’re planning to upgrade our back porch,” DeGracia said. “We want to make a space with events and additional seating. Our building is really old, so we need our electricity updated so we can operate more efficiently.”
If it stays long enough, Murray Hillbilly also plans to buy a mobile trailer.
These expansion and upgrade options came with the success of the restaurant’s campaign, which ended August 8, DeGracia said once they exceeded their minimum goal for a total of about $45,000.
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Honeycomb’s chief of staff, Topiltzin Gomez, said Honeycomb Credit facilitated the campaign. Honeycomb is a crowdfunding platform that helps local businesses monetize their communities.
“The reason we exist is because small businesses [can have] “Gomez is having trouble accessing bank loans,” he said. “Borrowing rates are getting higher and higher. If banks don’t lend to businesses, community members will.”
Gomez described the system as similar to a kickstarter or GoFundMe, but instead where community members “become the bank.”
Honeycomb has launched loan crowdfunding campaigns in nearly 26 states and has a growing presence in the Mid-Atlantic region in cities like Pittsburgh, Cleveland, and Washington, and is starting to gain more attention in the South.
Four businesses have launched and completed campaigns in Jacksonville: Kravegan, Murray Hillbilly, Irie Diner, and Cultural Kitchen & Catering.
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Regard Libations recently launched Honeycomb’s fifth campaign in the region with a $20,000 minimum target. Half of this minimum target was reached in the first three days of the 45-day campaign.
“Honeycomb works really well for retail businesses, restaurants [and] breweries,” said Gomez.[These establishments have] It’s a community where people are more willing to invest and at the same time more traditional lenders stay away from them.”
Kravegan was the first Jacksonville campaign launched in early May, raising over $51,000 from 35 investors, according to the campaign’s results website.
LaTasha Kaiser, owner of Kravegan in Orange Park, said she wants to use the funds to expand her company’s line of vegan sauces.
“I didn’t want to do a GoFund Me,” he said. “That’s not what I thought was professional for my job.”
When Honeycomb Credit contacted him, he said he thought it would be a good platform to ask community members to help him grow his business with investments rather than donations.
“Instead of paying a loan to a bank, we are paying back to the community, our followers and supporters,” Kaiser said.
Kravegan didn’t reach its maximum goal of $200,000, but like any other local business using Honeycomb for a campaign, it did hit the $40,000 minimum.
“We will be able to achieve our goals of redesigning the labels and getting the capital to order the sauces and put them on the shelves,” he said. “I appreciate their support of my brand. I can produce as much as I want, but if people don’t come and join, it will be a very expensive hobby for me.”
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Gomez said there tends to be three types of Honeycomb campaigns: expansion campaigns, like in Kravegan, working capital or refinancing campaigns, or line-of-business campaigns. Particularly in the current economy, Gomez said, he sees that small businesses have many great ideas, but don’t have enough money or access to bank loans to make them a reality. He described the local investment way of doing business as a “win-win” for society.
“Many businesses want to lock onto fixed-rate loans and avoid variable loans,” he said. “We also see investors looking to lock in these high, high rates. If their money is in a bank account, that’s a way to get some income on their investments.”
Honeycomb investments start at $100 and make it more accessible for the average person to be an investor in a small business.
Gomez said the average investment is $1,000, and people see it as part of their investment portfolio. Many investors are in their late 20s or early 30s and “love Jacksonville and want to invest in the area”.
“If you’re nervous about the stock market in the coming years, this is a good way to get away from it,” Gomez said. “At the same time, many locals love to shop in their local economy. There is a big shop locally, eat with the local action, but there is a limit to how much we can consume locally and there is not much available in the local investment economy.”
There is also a third type of investor.
The Jessie Ball duPont Fund has set up a fund to make five-figure investments in small businesses running Honeycomb campaigns.
Chris Crothers, director of impact investment at the Jessie Ball duPont Fund, said there is a gap in the credit ecosystem, particularly in Northeast Florida, which the organization is trying to reduce.
“There’s data out there that says too many people don’t have access to affordable loans,” he said. “Fintech lenders have blown up, so people don’t qualify in these traditional programs and often go to more predatory places, which are often deliberately placed in colorful neighborhoods.”
As a result, Crothers said her organization is seeking to set up a larger tent in Northeast Florida to increase impact investment – which redirects donated, traditionally invested capital to grants and high-impact local opportunities aligned with the mission.
Crothers said the JAX Microfinance Fund aims to raise capital for small business owners, and Honeycomb is at the top of the list of online platforms to partner with.
“While we are not restricting funding, we want to highlight the credits given to women and people of color,” Crothers said. “They’re also looking for businesses that fit the criteria we’re looking for. Our agreement is that the JAX Microfinance Fund was the first to support these businesses when the campaign launched.”
“Having an organization like Honeycomb that understands where we come from [to protect and improve our communities] It was very important.”
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DeGracia said the biggest surprise of the campaign was the number of investors for Murray Hillbilly, rather than how much they actually raised.
“It was really reassuring that they believed in our restaurant, our concept, and our movement enough to support it with their own money,” he said. “We have a few more projects in the store. In fact, we are also considering opening a second location.”
For now, Murray Hillbilly is working on fixing the back patio in late fall to start with some activities in milder weather.
Gomez said this is the first mass launch of Honeycomb campaigns in the region, but it won’t be the last.
“We are seeking funding for more small businesses that want to grow,” he said.
Kaiser added that this partnership offers opportunities with two different stock platforms.
“Our horizons have expanded, and for that I am extremely grateful,” he said. “I have a lot in hand for 2023 and we will need a lot of support to make that happen.”