Comments on: How did Awaken Café raise start up funds from its community? http://k2-legal.com/2009/11/12/how-did-awaken-cafe-raise-start-up-funds-from-its-community/ Just another WordPress weblog Tue, 07 Jun 2011 07:57:39 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Alex Moore http://k2-legal.com/2009/11/12/how-did-awaken-cafe-raise-start-up-funds-from-its-community/comment-page-1/#comment-193 Alex Moore Mon, 19 Apr 2010 15:39:16 +0000 http://katovichlaw.com/?p=674#comment-193 Disloyalty cards. http://seattletimes.nwsource.com/html/coffeecity/2011596620_seattle_cafes_join_disloyalty.html?syndication=rss Could this idea be bent to raise capital as a community? What if 5 or 10 businesses banded together to issue discount cards. The cards would be much more attractive and all boats would rise. The businesses could share an industry, neighborhood, or consumer segment. Disloyalty cards.
http://seattletimes.nwsource.com/html/coffeecity/2011596620_seattle_cafes_join_disloyalty.html?syndication=rss

Could this idea be bent to raise capital as a community? What if 5 or 10 businesses banded together to issue discount cards. The cards would be much more attractive and all boats would rise. The businesses could share an industry, neighborhood, or consumer segment.

]]> By: Jenny Kassan http://k2-legal.com/2009/11/12/how-did-awaken-cafe-raise-start-up-funds-from-its-community/comment-page-1/#comment-182 Jenny Kassan Wed, 16 Dec 2009 04:26:03 +0000 http://katovichlaw.com/?p=674#comment-182 I don't know how much Awaken raised. They marketed the opportunity through community contacts and social media, I believe. I wouldn't characterize it as a loan, but a purchase of a gift card with a face value higher than the purchase price. Prepayment for a product or service is something that could definitely be applied in other industries! I don’t know how much Awaken raised. They marketed the opportunity through community contacts and social media, I believe.
I wouldn’t characterize it as a loan, but a purchase of a gift card with a face value higher than the purchase price.
Prepayment for a product or service is something that could definitely be applied in other industries!

]]> By: Alex Moore http://k2-legal.com/2009/11/12/how-did-awaken-cafe-raise-start-up-funds-from-its-community/comment-page-1/#comment-181 Alex Moore Mon, 07 Dec 2009 17:43:12 +0000 http://katovichlaw.com/?p=674#comment-181 How much was Awaken able to raise during the first round? And how did they go about marketing the opportunity? Is this a 20% interest loan or much less when you factor in cost versus retail price at the register. If their cost of goods sold is 35% and let's say another 15% is variable, but the remaining is fairly sunk (monthly rental, part of wages, etc.) or net profit (probably 10%), then we can estimate a cost of 50% for these repayments. Cash is king and for $1,000, the repayment of $1,200 (in product) might only cost Awaken $600. That is an Extremely good loan. How does this strategy apply to other industries. Agriculture, for instance, has been using a CSA model for decades successfully, but the margins are lower and the risks are higher compared to retail food and beverages. And how about solar electric? Could a community pull together to buy their electricity up front from a startup community solar installer? The tax breaks and other incentives are only getting bigger each year for community-based renewable energy development. Alex Moore alexmoore.mba@gmail.com How much was Awaken able to raise during the first round? And how did they go about marketing the opportunity?

Is this a 20% interest loan or much less when you factor in cost versus retail price at the register.

If their cost of goods sold is 35% and let’s say another 15% is variable, but the remaining is fairly sunk (monthly rental, part of wages, etc.) or net profit (probably 10%), then we can estimate a cost of 50% for these repayments.

Cash is king and for $1,000, the repayment of $1,200 (in product) might only cost Awaken $600. That is an Extremely good loan.

How does this strategy apply to other industries. Agriculture, for instance, has been using a CSA model for decades successfully, but the margins are lower and the risks are higher compared to retail food and beverages.

And how about solar electric? Could a community pull together to buy their electricity up front from a startup community solar installer? The tax breaks and other incentives are only getting bigger each year for community-based renewable energy development.

Alex Moore
alexmoore.mba@gmail.com

]]> By: Jenny Kassan http://k2-legal.com/2009/11/12/how-did-awaken-cafe-raise-start-up-funds-from-its-community/comment-page-1/#comment-180 Jenny Kassan Fri, 04 Dec 2009 21:16:51 +0000 http://katovichlaw.com/?p=674#comment-180 Great question! The definition of a security is an "investment in a common venture premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others." When people purchase Awaken Cafe gift certificates, they are not doing so with the expectation of profits but rather are purchasing something entitling them to coffee. Therefore, arguably, this is not a security. I wonder what might happen though if someone uses this strategy to raise start up funds, is unable to open the business, and is unable to refund the purchase price for the gift certificates. Might this result in a complaint to the securities regulators?!?! Great question! The definition of a security is an “investment in a common venture premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.” When people purchase Awaken Cafe gift certificates, they are not doing so with the expectation of profits but rather are purchasing something entitling them to coffee. Therefore, arguably, this is not a security. I wonder what might happen though if someone uses this strategy to raise start up funds, is unable to open the business, and is unable to refund the purchase price for the gift certificates. Might this result in a complaint to the securities regulators?!?!

]]> By: Sushil http://k2-legal.com/2009/11/12/how-did-awaken-cafe-raise-start-up-funds-from-its-community/comment-page-1/#comment-179 Sushil Fri, 04 Dec 2009 20:04:17 +0000 http://katovichlaw.com/?p=674#comment-179 Are there any Securities law concerns here? Are there any Securities law concerns here?

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