The Rough Draft team is excited to announce our investment in Local Lift: a company whose vision of engaging community members to actively participate & support in their surrounding neighborhood or city, very much aligns with our own vision for empowering student entrepreneurs in the Boston community. Over the past few months, we’ve watched Eric & Broderick realize their vision, from an their initial spark of interest in community investment to a platform ready to scale and improve the way small businesses can grow and better serve their local customers.
The Rewards of Crowdfunding:
Since the passing of Obama’s Jumpstart Our Business Startups (JOBS) Act in 2012, the use of crowdfunding has become a hot topic within various markets. Unfortunately, many forget that crowdfunding existed well before the JOBS Act and that currently rewards (not equity) crowdfunding is the most proven model. Platforms such as Kickstarter, Indiegogo, and WeFunder have for years allowed individuals to contribute monetarily in a social and collaborative manner around common projects. Thanks to Local Lift, Main Street businesses can now benefit from the growing trend of rewards based crowdfunding.
After meeting in their Harvard Business School “section” in the fall of 2012, the two soon realized they held a common interest in how communities can invest in themselves rather than relying upon outside capital from others outside of their region in order to grow and become sustainable. With few companies focused on this space, McClinton and Sonnier created Local Lift and set out to test their initial hypotheses: people care most about the businesses that exist within a 30-40 mile radius from where they live. Further, if individuals within the community can cash in rewards based on their contribution, this will engender further support.
In June of 2013, Matt Christen joined the team to build out their platform. The founders focused on finding a variety of unique businesses for their first pilot. With hands on, personal meetings, they emphasized the importance of establishing trust with the business owners, as there was no platform to demonstrate. By educating the owners on how the platform would work, the two found that many of the owners had been turned away from banks and other lending institutions. The founders saw the opportunity to help these businesses through such an important process, where the success of all parties involved was directly aligned.
Learning from Pilot Data:
In September of 2013, the pilot launched with 12 businesses in Austin and New Orleans, with campaigns running 30-45 days in length. During the pilot, the team focused on promoting the businesses through marketing campaigns tailored to each community, establishing a regular cadence of communication between business owners and consumers around the goal. At the end of the pilot, 8 of the 12 businesses had reached their goal, but the real information for the team was in the data: where the supporters came from, what were good rewards, what did an unsuccessful campaign lack? What types of businesses are best for this type of platform? How did user experience factor in?
Based on this information, the team is currently revamping the website with a greater focus on creating a “city portal” displaying relevant events, news articles, educational material for small business owners, and crowdfunding ability. McClinton, Sonnier, and Christen have the product up and running, with more businesses in the pipeline. With the decision to pursue the company full time, they are looking to scale and fundraise in order to grow. Keep your eyes out, Local Lift might just arrive in your community next!
Congrats again to the Local Lift team! We’re looking forward to your journey forward & grateful to be along for the ride.
