Saturday, May 26, 2018
Business

Tampa-based ClickStartMe seeks piece of growing crowdfunding market

TAMPA — Worried about harmful chemicals in most deodorants, Amy Cazin created all-natural Primal Pit Paste. She made batches in her South Tampa kitchen, turned her dining room into a shipping center and, as business grew, expanded into her garage.

Within months, she needed even more room.

Armed with big plans but not a lot of money, she turned to ClickStartMe, a new crowdfunding website based in Tampa. The site allows individuals and businesses to post campaigns to raise money for various projects in exchange for perks, incentives and just plain gratitude.

Cazin initially asked for $75,000 to move into a manufacturing facility but got such an immediate boost in sales and exposure, she didn't need as much and revised her goal to $10,000. As of Friday, she had raised $11,510 and was working round-the-clock to keep up with orders.

Primal Pit Paste is one of many start-up companies ClickStartMe hopes to catapult from relative obscurity to overnight sensation. Site founder Tess Hottenroth, 29, says that's the magic of crowdfunding and a solution for growing the economy.

"It's about the small person with a small idea becoming the next big thing,'' she said. "It's a way for some businesses to push forward without having Wall Street and all the stars aligned.''

• • •

The concept of crowdfunding has been around for centuries but has exploded in recent years as getting funding for new ideas and fledgling businesses has become more difficult. Kickstarter and Indiegogo are the big names in the industry but face increasing competition from other crowdfunding sites eager to grab a share of the evolving business.

A study out last month from the analyst firm Massolution says crowdfunding could raise $5.1 billion worldwide this year, up from $2.66 billion in 2012 and $1.47 billion in 2011. Forbes magazine has said crowdfunding will "revolutionize how early stage investing and fundraising works.''

ClickStartMe began with a simple desire: to restore the American dream. Hottenroth and her partners were tired of relying on government to fuel economic growth. Instead, they wanted it based on great ideas and passionate people.

Hottenroth and a small team in Tampa and California started developing the site in September, working mostly for free and with a small budget from a few investors. A Colorado native, Hottenroth moved to Tampa two years ago and works for lawyer Kendall Almerico, an entrepreneur and expert in crowdfunding.

The team saw holes in other crowdfunding efforts and wanted a site that also gave entrepreneurs free or discounted help with patents, marketing and distribution. To keep the public engaged, it created contests and events with online voting for different campaign subjects, a twist on the popularity of American Idol and other reality TV shows.

The site launched in December and recently started promoting projects. For inspiration, it looks to the Pebble watch that connects to the iPhone and Android. Pebble launched a $100,000 fundraising campaign on Kickstarter and raised an eye-popping $10.3 million.

• • •

Projects on ClickStartMe and other crowdfunding sites offer donors rewards or incentives for giving a cash contribution. Primal Pit Paste gives people a shout-out on its Facebook page and Twitter feed for every $5 donation. Give $25, and you get a jar or stick of Pit Paste and a "Go Primal'' T-shirt. Give $1,000 and you get a bunch of goodies, plus an afternoon making paste with Cazin and dinner with her and her husband, Jimmy.

Contributions go directly to the project owner, minus a 7 percent fee to ClickStartMe and a 2.9 percent fee to PayPal. Posting a project is free.

So far, no one has donated $1,000, but many people have given $50 and $100 toward the campaign, which ends Thursday. Most have tried the product or support the concept of all-natural deodorant in general.

"It's humbling every day,'' said Cazin, 39, a mother of four. "Without ClickStartMe, I don't think we would be this far this fast.''

Eventually, the site hopes to offer ownership stakes in start-up companies. Last year, Congress passed the Jumpstart Our Business Startups Act, or JOBS Act, that legalized the use of crowdfunding for equity investments. But ClickStartMe and other sites have to wait for the Securities and Exchange Commission to write the rules.

In the meantime, ClickStartMe is soliciting projects that offer perks rather than company ownership. The Super Stars are looking for $7,500 to make a music CD. The makers of Dreamers, an all-natural nutritional supplement to improve sleep and enhance dreams, wants $10,000 in presales orders. Singer and songwriter Alias Julius recently raised $25,665 to make a music video and fund a European tour this year, surpassing her $25,000 goal.

Industry leaders say donors like contributing to their favorite cause in exchange for a perk or incentive. In many cases, they want the opportunity to be among the first to have a product.

"People who give money want to be part of something,'' said Maurice Lopes, a governing board member of the Crowdfunding Professional Association and founder of EarlyShares, a Miami-based crowdfunding site waiting to do equity campaigns. "They believe in the product or the project and want to help out. It's a feel-good thing.''

He cites a historically significant example of crowdfunding: When raising money to build the original pedestal for the Statue of Liberty fell short, newspaper publisher Joseph Pulitzer put out a public call for cash. In five months, he raised $100,000 in 120,000 small donations.

Susan Thurston can be reached at [email protected] or (813) 225-3110.

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