Soon after Roberto Torres and Chris Findeisen graduated from college, both decided they wanted to run their own business. But how could they find financial backing for a couple of unproven 20-somethings who wanted to build a clothing company?
They found the answer with crowd funding.
New companies tell their stories on the internet, and small investors send money to help the businesses grow. Torres and Findeisen raised more than $37,000 from nearly 400 "backers" who paid an average of around $125 to help build their company called "Black And Denim."
They did it on a crowd funding site called KickStarter.
IT'S ALL ABOUT THE STORY
Why did people pay to help build their company? Findeisen says it's because of the story behind the company.
"We want to make sure that everyone knows that we are trying to bring back the whole idea of working hard in the United States," explained Findeisen, whose background is in graphic art.
He says all of their jeans and shirts are made in U.S. factories which provide the highest quality. He says an online video they produced to show their products and their vision for their company went a long way to convince backers to shell out cash.
Traditionally, companies that seek investors must sell shares of their business or repay loans with interest. But, with their crowd funding model, Black and Denim did neither.
"The beauty about it is we're not giving away equity," said Torres, whose background is in business and accounting. "With angel investors or venture capitalists, you're giving away a little bit of that equity. With crowd funding you're not."
Instead, in return for their money, backers are given early delivery and discount prices on Black and Denim's latest jeans and shirts, along with keychains and other logoed items to foster an emotional stake in the success of the company.
Torres says the company may turn to traditional financing in the future, but they already have a new crowd funding campaign to help expand their clothing line.
FOX 13 / WTVT-TV
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