33 Needs is a new "Social Enterprise" funding platform that just launched today. I have looked at a number of ways to raise capital from family and friends such as Kickstarter and others, but none seem to make sense like what Josh Tetrick and his teams have done with 33 Needs. They seem to have done the hard legal work of figuring out how to do private placement with unsophisticated investors without running afoul of security law.
Some of the things I like really like about 33 needs is;
- You can raise the amount you want and it is paid back as a percentage of your revenue over a set period of time.
- You don't (can't) actually issue company stock (equity) for the investment.
- Investors take risk, if you can't pay it back then at the end of the time period your obligation ends.
- 33 needs manages the investor pool communication and engagement.
- If there is a liquidity event (you want to sell) investors get a pre-determined investment kicker and then they are out and you gain back total control over your business revenue.
- 33 needs takes a modest fee (5%) the the amount raised.
- The reporting is minimal and what any business normally does for tax preparation.
I have been following for years the growth of the local food movement. One of the problems local farmers have is gaining investments to grow their business. Think of all the successful CSA (community supported agriculture) that could use the 33 Needs platform to fund growth of their favorite farmer or get a farmer into a new food business.
The team aspect of 33 Needs is also, in my opinion, innovative. It lets groups form to invest together in social enterprises. I would think CSA members could be encouraged by a farmer in pooling resources and helping a farmer expand or new local food enterprise get started. Investor take the risk of loosing their money but they also have the upside of potential making a return on their investment.
This is exactly what the slow money folks should be doing. I think they should join and support Josh in his efforts.
I believe Josh may have cracked the nut on how to do neighbor-to-neighbor investing without the hassle and restrictions of actually issuing stock or defaulting on a interest bearing loan.