Most people think of GoFundMe as a way to raise money for medical debt, funeral costs or natural disaster relief, but the crowdfunding website is increasingly used by struggling small businesses, says CEO Rob Solomon.
Thousands of small businesses, ranging from comic-book shops to drive-in movie theaters, have opened campaigns across 19 countries, The Wall Street Journal reports.
“These independent businesses become pillars in a community, and when they can’t stay open, the communities really rally,” Solomon says.
For example, Brooklyn-based shop Books of Wonder started a campaign on Oct. 22 and has raised more than $23,000 toward its $250,000 goal. The company has about 30 employees between its two stores and annual sales of just over $2 million.
Owner Peter Glassman says he can pay his current bills but needs money to move the bookstore’s flagship from 18th Street to a more affordable and high-trafficked space in the Flatiron District.
Unlike on other crowdfunding websites, GoFundMe organizers are able to cash out all of the money they raise, minus a 2.9% credit-card processing fee, regardless of whether they reach their goals.
Jessica Walker, president and chief executive of the Manhattan Chamber of Commerce, said small and midlevel independent businesses are squeezed by rising rents, minimum-wage increases and mandatory sick leave. Crowdfunding can help fill the gap.
“If a business is struggling, it’s much harder to get a bank loan,” Walker said. “It’s most helpful to people, such as women and people of color, who don’t necessarily have access to a ton of wealth within their networks or an abundance of angel investors waiting in the wings.” Read the full story.
