AUSTIN - It can be hard for small businesses to get off the ground and now more and more owners are turning to investment crowdfunding to raise the funds they need.
Tracy Pingel has run SquareRut Kava Bar for five years and in that time she's gained a following. However, when it came time to expand to another location, she ran into some problems.
"The traditional way of getting funding was not working for us," Pingel said.
Pingel turned to NextSeed to get funding for a new bar location. The crowdfunding platform allows investors to browse businesses and lend to them directly. Pingle got a total of 35 investors on board, all of them are just everyday people.
"We raised a total of $100,000," Pingel said.
That was enough to open a new bar off Barton Springs Drive.
"We have since seen those people come in and support our bars," Pingel said.
Now, the investors are getting financial returns and incentives such as discounts and gift cards. Pingle says she makes monthly payments to NextSeed and NextSeed pays the investors.
"We have paid five months now back to NextSeed and our agreement is 24 months," Pingel said.
Pingle calls it a win-win for everyone and plans to use it again for her next business venture.
Anyone can apply for their business to be funded through NextSeed. If your company is approved, each deal works differently.
(© 2016 KVUE)