Jacksonville businesses receive tens of thousands from the community

Murray Hillbilly co-owners Rafaella DeGracia and Lindsey Cooper are excited about what the future could hold for their business after a successful crowdfunding campaign for investment.

“We are planning to upgrade our back patio,” DeGracia said. “We want to make it a space for events and additional seats. Our building is very old, so we need to update our electricity so we can operate more efficiently.”

If there is enough left over, Murray Hillbilly plans to get a mobile trailer as well.

Those expansion and upgrade options came with the success of the restaurant’s campaign, which ended Aug. 8, DeGracia said, when they surpassed their minimum goal of a total of about $45,000 raised.

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Honeycomb Credit facilitated the campaign, said Topiltzin Gomez, Honeycomb’s chief of staff. Honeycomb is a crowdfunding platform to help local businesses get money from their community.

“The reason we exist is that small businesses [can have] problem of accessing bank loans,” Gomez said. “Lending rates are increasing more and more. If banks won’t lend to businesses, community members will.”

Gomez described the system as similar to a kickstarter or a GoFundMe, but where community members “become the bank.”

Honeycomb has launched loan crowdfunding campaigns in about 26 states and has a growing presence in the mid-Atlantic region in cities like Pittsburgh, Cleveland and Washington, D.C., and is starting to see more interest in the South.

In Jacksonville, four businesses started and completed campaigns — Kravegan, Murray Hillbilly, Irie Diner and Cultural Kitchen & Catering.

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Regard Libations recently launched its campaign, Honeycomb’s fifth in the region, with a minimum goal of $20,000. He was halfway to that minimum goal in the first three days of the 45-day campaign.

“Honeycomb works really well for retail businesses, restaurants [and] breweries,” Gomez said. “[These establishments have] a community that has people more willing to invest and also more traditional lenders stay away from them.”

Kravegan was Jacksonville’s first campaign that launched in early May and raised more than $51,000 from 35 investors, according to the campaign results website.

LaTasha Kaiser, owner of Kravegan in Orange Park, said she wanted to use the funds to expand her company’s line of vegan sauces.

“I didn’t want to do a GoFund Me,” he said. “This is not what I thought was professional for my business.”

When contacted by Honeycomb Credit, she said she thought it would be a good platform to ask community members to help her grow the business through investment rather than donations.

“Instead of paying off a loan to a bank, we’re paying back to the community and our fans and supporters,” Kaiser said.

Kravegan didn’t meet its maximum goal of $200,000, but like all other local businesses that used Honeycomb for a campaign, it met its minimum of $40,000.

“We will be able to meet our goals of redesigning the labels and getting the capital to order the sauces and put them on the shelves,” he said. “I appreciated the intentional support of my brand. I can create as much as I want, but if people don’t come and participate, it’s just an overrated hobby for me.”

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Gomez said there tend to be three types of Honeycomb campaign: expansion campaigns, working capital or refinancing campaigns, or line-of-business campaigns, as in Kravegan. Especially with the current economy, Gomez said he’s seen small businesses with lots of great ideas but not enough money or access to a bank loan to make them a reality. He called the local investment way of doing business a “win-win” for the community.

“A lot of businesses want to lock in fixed rate loans and avoid variable loans,” he said. “We’re seeing investors also want to lock in those higher, increased interest rates. If their money is sitting in a bank account, that’s a way to generate some income on their investments.”

Honeycomb investments start at $100, making it more affordable for the average person to be an investor in a small business.

The average investment is $1,000, Gomez said, and people see it as part of their investment portfolio. Many investors are in their late 20s or early 30s and “love Jacksonville and want to invest in the area.”

“If you might be nervous about the stock market in the next few years, this is a good way to diversify away from it,” Gomez said. “At the same time, many locals love shopping in their local economy. There’s a big local shop, eat local movement, but there’s a limit to how much we can consume locally, and there’s not too much available in the local investment economy.”

There is also a third type of investor.

The Jessie Ball duPont Fund has created a fund to make five-figure investments in small businesses running Honeycomb campaigns.

Chris Crothers, director of impact investing at the Jessie Ball duPont Fund, said that in Northeast Florida in particular there has been a gap in the lending ecosystem that the organization is working to close.

“There’s data out there that says too many people out there can’t access loans at fair prices,” he said. “Fintech lenders have exploded, so people don’t qualify for these traditional programs and often go to more predatory places, which are often placed in neighborhoods of color on purpose.”

As a result, Crothers said his organization is working to set up a bigger stage in Northeast Florida to increase impact investing — which directs endowed, traditionally invested capital to local, high-impact opportunities that align with grants and mission.

Crothers said the JAX Microfinance Fund is intended to raise capital for small business owners, and Honeycomb was at the top of the list for online platforms it works with.

“While we’re not limiting the fund, we want to emphasize loans to women and people of color,” Crothers said. “They are also looking for businesses that meet the criteria we are looking for. Our agreement is that the JAX Microfinance Fund is the first to support these businesses once the campaign starts.

He added that “having an organization like Honeycomb that understands where we’re coming from [to protect and improve our communities] it was very important.”

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DeGracia said the biggest surprise of the campaign was the amount of investors, not how much they actually raised for Murray Hillbilly.

“It was really reassuring that they believe in our restaurant and our concept and our movement enough to support it with their own money,” he said. “We have a few other projects in store. We are actually looking at opening a second location.”

For now, Murray Hillbilly is trying to build up the back patio by late fall to start with some milder weather events.

Gomez said this was the first batch of Honeycomb campaigns in the region, but it won’t be the last.

“We’re trying to find more small businesses that want to grow,” he said.

Kaiser added that this partnership opened up opportunities with two different equity platforms.

“Our horizons have expanded and for that I am extremely grateful,” he said. “I’ve got a lot up my sleeve for 2023 and we’re going to need a lot of support to make it happen.”

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