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Getting funding for your business is easier than ever.
That might sound like a cheesy sales pitch, but with changes in legislation and a service like Bolstr at your fingertips, it’s not inaccurate. Whether you need cash to brew your craft beer or market those cool handbags you’re sewing, the bank is no longer your only option for capital.
The thing is, the bank isn’t very modern. You’ve got fixed payment plans, a cumbersome approval process and there’s still a chance that even if you’re a success and do everything right, your second application for a loan could be denied — just because the bank isn’t interested in investing with you again.
Going the venture capital route can be just as lengthy, so Bolstr is working to eliminate those worries for small businesses. Founders Charlie Tribbett and Larry Baker met while they were interns at JPMorgan in New York, forming an early bond over their desire to create their own business one day. They spent late nights tossing around ideas and eventually settled on an early version of Bolstr that slowly morphed into what it is today.
Beginning in 2011, Tribbett and Baker saw a lot of pain points in banking and investing, but they saw even more opportunity in the blooming tech and startup market that was crawling out of a deep recession. Research and instinct told them there were plenty of people ready and willing to invest in startups, they just didn’t know about the opportunities.
“There are 8.5 million accredited investors that never had invested in startups or small business. When you take that market and give them the opportunity to invest in real businesses that are consumer, retail, or manufacturing, that they can fundamentally understand from a cash flow perspective, it becomes really exciting,” Tribbett said. “We thought it would be a great opportunity to really build a new public facing market where these accredited investors could access investment opportunities they previously couldn’t.”
After a friends and family round to get started in 2013, Bolstr launched the technology they use to vet company applications and ultimately gather the funding. They dabbled in a more traditional crowdfunding model, but found that most companies couldn’t raise more than $25K without large, accredited investors. So they pivoted again.
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Today, Bolstr is a marketplace for local business. They select the best and brightest through their stringent verification process and once a company is selected, accredited investors have the opportunity to invest. Bolstr provides the opportunity for the business to retain 100 percent equity and secure the capital they need in order to prosper, while providing investors a unique opportunity for great returns while seeing their favorite local business grow and succeed.
These investors aren’t your Pritzker’s or your Hyde Park’s — these are doctors, lawyers and other professionals with the capital to invest. And these businesses aren’t necessarily looking for long term financing, it might be something growth-specific like the capital to back a new fermentation tank for a craft brewery. The money is generally used for short-term growth and improvements, but they're visible improvements investors can see and understand.
And they’ve got some pretty impressive stats to back up their model. Every startup they’ve worked with (about 20 so far) has been funded within five days in the last 12 months. That’s a 100 percent success rate. Ideally these investors will back a business again if they repeat, and that has already been the case for some.
They’re also solving a huge pain point for seasonal businesses — think your local ice cream shop. Sure their business is booming in the warmer months, but how will they pay their investors in the winter? Unlike a bank, payback is proportional to a business' revenue and cash flow, which benefits both the business and the investor (as they could be paid back sooner).
“We're the access point that facilitates the exchange of commerce between two parties," Baker said. “We’re making investing more efficient and cost effective through our technology platform.”
After raising a $1.7 million round in January, Bolstr is using their new capital to double their team within the next 12-18 months with key hires in sales and marketing. They’ll also continue to scale the business, getting into more markets across the U.S. (they've completed deals in Chicago, San Francisco and Seattle). They’re currently working out of Enerspace in the West Loop.
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