The owners of Cocoa Cinnamon want you to help finance their second location, one square at a time.
Last week, owners Leon Grodski de Barrera and his wife Areli Barrera de Grodski launched a fundraising campaign through Community Sourced Capital. The Seattle-based certified B Corporation provides a platform that mixes crowdfunding and interest-free loans. The couple is seeking to raise between $30,000 and $50,000 in a campaign that asks supporters to buy $50 squares. The money is essentially a no-interest loan to the owners, who have agreed to pay it back within three years.
Community Sourced Capital has loaned $838,350 to businesses through 3,769 Squareholders, according to its website.
The company doesn’t guarantee that money will be paid back and advises investors not to contribute more than they can afford.
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If you’re familiar with Cocoa Cinnamon’s broke-to-Hipsterella story, then their latest financing path shouldn’t surprise you.
The couple became fluent in community and alternative financing after turning $75 and an idea about a sustainable coffee shop into Cocoa Cinnamon, a place that singer Sarah McLachlan gave a nod to on the DPAC stage and BuzzFeed ranked No. 7 on its list of 24 coffee shops to visit before you die.
Cocoa Cinnamon built community credibility by riding around downtown and selling coffee from a bike cart, while cobbling together capital from friends, family, and a Self-Help Credit Union loan co-signed by their landlord. They raised more than $32,000 on Kickstarter.
Just before opening in January 2013, the shop needed $10,000 for inventory. The couple worked with peer-to-peer local lending connector Slow Money and borrowed from two Durham investors who set an interest rate between 2 and 4 percent.
Their debt is mostly paid off, except for about $2,000 which they are letting run the course of the loan’s term to establish business credit, as the business has evolved into an Old North Durham neighborhood jewel that pays a living wage in an award-winning renovated building.
Now they plan to open a second location at 2625 Hillsborough Road in the Old West Durham neighborhood, and the couple is starting another conversation about financing with their current and future customers.
“I can’t imagine opening another shop without people being a part of it,” Grodski de Barrera said. “For us, the neighborhood and the community has to be in on it.”
The financing plan includes personal investment, raising about $30,000 through Slow Money and up to $50,000 through the Community Sourced Capital campaign, which has to raise up to $30,000 by May 19 for Cocoa Cinnamon to receive the funding. Cocoa Cinnamon paid $250 to use the platform, and then $50 a month until the loan is paid off.
Supporters will get updates as the shop is built, an exclusive invite to a soft opening that’s aimed for late fall, and notices as repayments are made.
As of 5 p.m. Monday, the campaign had raised $10,600 from 81 donors.