Seed-ville: Grow-local op grows Carpe Donut
What if you take the concept of the local food movement, add a grassroots element, and apply it to the world of finance? It might look something like Seed-ville, which just launched a campaign to raise $15,000 for his rolling doughnuttery.
Carpe Donut's Matt Rohdie wants to expand with another food truck. UVA second-year Jessica Lee and her Seed-ville team want to start an incubator for small businesses to raise capital. Instead of going to a bank, they got together to use crowd-funding– sort of a Kickstarter for small local businesses.
"We have a very specific project that's a little outside our daily business," says Rohdie, who says he can't dip into operating capital to buy the additional truck.
"It's very hard for us to borrow money," says Rohdie. "We haven't been in business 20 years. We don't have deep pockets."
And one thing he really likes about the Seed-ville model: "We're not going to get in over our head in debt."
Here's how it works. Let's say you pledge $20 toward Carpe Donut. It's not a loan, and you won't own a piece of the business, but you will get a dozen doughnuts and a drink. If you pledge $1,000, your reward is a visit from the fully loaded truck (complete with chocolate machine and omelet station) to cater a party of 44.
"We're offering rewards that are closely held to what the value is," says Rohdie. "Lend us $10, and come on in for a coffee and doughnuts."
Rohdie calls the Seed-ville model "bottom up investing rather than outside investors," and he says he loves the idea that the fundraising has a local emphasis– much like Carpe Donut, which uses local products to make its organic doughnuts.
"It's a localized way to support a small business," says Seed-ville's Lee. "Carpe Donut had information on what they wanted to do. And they're one of the most popular small businesses in town."
Lee notes that Seed-ville is more business-oriented than the better-known Kickstarter, a platform that local filmmakers like Derek Sieg and Eduardo Montes-Bradley have used to raise money. She credits her three other Seed-ville team members, all UVAers, including third year Sinan Ulkuatam, who built the platform the pilot program uses.
A computer science major, Lee says she took a class on entrepreneurship and has a personal reason for her focus on small business: her dad, who owned a small car dealership, where Lee spent a lot of time as a child and where she pitched in to help the family enterprise.
"I've always grown up in that environment," she says. "I love working with small businesses."
Bob Fenwick, a key force behind the local Cash Mob, which serially showers money on mom-and-pops, agrees.
"It gets the message out," Fenwick says, "that small business is good for the community."
With the second truck, Rohdie plans to expand another Carpe Donut-like business into another city.
"We'll be in partnership with another entrepreneur," says Rohdie, describing it as collaborative entrepreneurship that will grow other small businesses.
The Carpe Donut campaign kicked off November 10, and two days later, 10 people had pledged $580. The campaign runs through December 19.