Square Café owner
The new space, previously occupied by restaurants Spoon and BRGR, will provide more indoor and outdoor seating, be open longer hours and offer beer and alcohol.
"It is exciting to work with a business like Sherree's that is growing," said
People can give any amount and will be paid back with interest in 60 months. The interest rate is 6.5%.
This is the second time Goldstein has looked to customers for financial help. She needed funds for another business, MyGoodness, a market and prepared food company in
The goal for Square Café is
"The buy-in from people that really want to see you succeed and share in that success is truly humbling," Goldstein said. "And it also drives us to provide the best possible food, service and opportunities back to our community and on behalf of our investors."
Goldstein's campaign is the largest restaurant one Honeycomb has run, Homer said. Honeycomb makes money on what's called a success fee, a percentage of the deal. Goldstein is able to do this campaign because of the Jumpstart Our Business Startups Act, which allowed for everyday people to invest in small businesses, Homer said.
The money is repaid to investors quarterly, Homer said.
The pandemic has affected business at Square Café, which remains open until the new space is ready by the end of September. Last month, she said, her revenue was down
Often the investors in crowd-funding campaigns are also customers and supporters of the business, said
"This can benefit the business because customers may be motivated to lend the business money for reasons other than purely financial considerations," Gupta said. "In the case of
She said there are two ways in which community members who fund the loan can get a return on their investment. The first is a financial return and the second is non-monetary but has a value because those individuals want Square Café to be successful.
Crowd-funding has been around in different forms for a long time, but its popularity has been growing in the past decade, Gupta said. Investment-based crowd-funding campaigns are relatively newer and investors have the potential to earn a financial return.
"This type of loan can be a great option for businesses with a loyal current or future customer base," Gupta said. "However, it may not be right for everyone. The business is trying to raise small amounts of money from many investors rather than getting the money from a single large investor, for example from a bank. To be successful in crowd-funding, the business has to have a good way to reach and advertise to multiple potential investors which may be difficult and time-consuming."
If this minimum amount is not raised, the money is returned to investors in most cases, Gupta said.
Goldstein plans to use the money to purchase new kitchen equipment, a second delivery vehicle, tableware and seating, plates and silverware, liquor and beer, and other related supplies. She would also like to hire 15-30 people. Goldstein offers benefits to employees.
"Sherree really cares about the people she works with,"
Square Café opened in 2003.
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