Crowdfunding, or collecting funds from donors that is typically done through a website, is quickly changing the small business landscape across the nation.
Patrick Burns owns the Palace Coffee Shop in Canyon, and is currently working on opening another location in Downtown Amarillo. Heâ??s building out a space in the Paramount building on Polk Street, and it has been a costly endeavor. In order to have enough money to open his shop, heâ??s turned to kickstarter.com, a crowdfunding site for creative projects, which can include small businesses.
â??Weâ??re really excited to open up our new shop downtown, and of course, it being a build out, costs kind of go up and upâ??, said Patrick Burns. â??We wanted to make sure we had enough money on the backend to make sure that we can get the best equipment, good merchandise, and excellent coffee, which weâ??re known for, so we decided to go ahead and started a kickstarter campaign.â??
Mr. Burnsâ?? campaign on kickstarter is one of millions around the country, and kickstarter is only one website of many crowdfunding sites.
â??Crowd sourcing has growth from a 1.5 billion dollar a year industry two years ago to 5 billion dollars funded through platforms last year,â?? said David Terry of West Texas A&M Universityâ??s Enterprise Center.
The use of crowdfunding will likely continue to expand around the country. Crowdfunding is probably most famous for funding personal projects, but itâ??s increasingly being used for small businesses. And the Security and Exchange Commission is changing the rules for crowdfunding to allow equity investment, meaning you could own a piece of a company if you fund it. Due to small business is the primary driver of employment in the United States, this could yield tremendous economic benefits.
â??If you look at Amarillo right now, of my chamber membership of almost 1800 members, 95% of them are small business persons, so itâ??s terribly important to our economy here in Amarillo and to the United States,â?? said Gary Molberg of the Amarillo Chamber of Commerce.
Patrick Burns of Palace Coffee says that his kickstarter campaign is ongoing and he still has a way to go. While kickstarter only allows donors to receive rewards and not partial ownership, there are many websites such as fundable dotcom, that allow you to buy part of small company if you decide to invest.