Audio by Sophia Ramirez
Anchor Intro: Crowdfunding is an increasingly popular way to raise money. For new business owners, it can be more feasible than getting a loan, with the added advantage of not having to pay anyone back. Sophia Ramirez went to Durham to check out one of the businesses born out of a crowdfunding campaign.
BEV MAKHUBELE: So this shelf is one that Naledi has decided to call the juju shelf. It’s our fantasy, science fiction esque shelf.
SOPHIA RAMIREZ: ROFHIWA BOOK CAFE OPENED ABOUT A YEAR AGO IN EAST DURHAM. BEV MAKHUBELE IS GOING THROUGH THE BOOK DISPLAYS THEIR PARTNER AND CO-OWNER, NALEDI YAZIYO (YA-ZEE-YO), HAS PUT TOGETHER.
MAKHUBELE: I’m seeing her here kind of experiment and pushing the boundaries of what is memoir by including some of these things that are not very obvious, like Chronicling Stankonia, you know? Does that make sense in memoir? Some of what she’s doing is also interrogating how we think about genre.
RAMIREZ: AT ROFHIWA, THEY SELL COFFEE AND A CAREFULLY CURATED SELECTION OF BLACK AUTHORS – ONLY BLACK AUTHORS.
MAKHUBELE: I think that what makes us different from other bookstores that also prioritize carrying black authors is that ours is a… very specifically and intentionally global selection.
RAMIREZ: ROFHIWA WAS A DREAM MAKHUBELE HAD BEEN CULTIVATING FOR A LONG TIME. WHEN THEY MET YAZIYO, IT STARTED TO LOOK MORE LIKE REALITY.
MAKHUBELE: She’s this kind of person who has stacks and stacks and stacks of books, in every nook and cranny, on tables. She, without even knowing was already aesthetically curating because she had very interesting ways of placing and displaying the books.
RAMIREZ: BUT THEY NEEDED TO FIND THE FUNDS TO GET STARTED.
MAKHUBELE: We made the decision that we were going to go on Kickstarter, firstly… We took a lot of time with it over the course of a month, put it together, deployed it on December 3rd and then just started to share it with our networks as far as we could… and then we just let it out there in the world.
RAMIREZ: YOU MIGHT ALREADY BE FAMILIAR WITH CROWDFUNDING PLATFORMS LIKE GOFUNDME, INDIEGOGO, OR KICKSTARTER. THESE SITES ALLOW PEOPLE TO RAISE MONEY FOR A CAUSE BY SOLICITING DONATIONS.
KICKSTARTER, THE PLATFORM MAKHUBELE AND YAZIYO USED, HOSTS CREATIVE VENTURES SPECIFICALLY. THAT COULD BE A DOCUMENTARY, A RESTAURANT, A BOARD GAME, ETC. HERE’S PATTON HINDLE, HEAD OF ARTS AT KICKSTARTER.
PATTON HINDLE: So that’s what sort of differentiates us from things like GoFundMe or IndieGoGo. And that means you can’t generally fundraise on the platform. You have to have a creative endeavor which you are trying to raise funds for.
RAMIREZ: THE MOST OBVIOUS ADVANTAGE OF CROWDFUNDING FOR ENTREPRENEURS IS THAT THEY DON’T HAVE TO PAY BACK A LOAN. WITH KICKSTARTER, THERE IS A REWARD SYSTEM BASED ON HOW MUCH FOLKS DONATE – FOLKS WHO GAVE $5 TO ROFHIWA GOT A PERSONALIZED THANK-YOU NOTE AND A LINK TO THEIR CURATED PLAYLIST. FOLKS WHO GAVE $100 GOT A BRANDED CREWNECK T-SHIRT, A CURATED READING LIST, AND A DRINK. AS FOR KICKSTARTER…
HINDLE: We take 5% of every successful project. So, that means any project that reaches its funding goal. We receive 5% of the proceeds of that, and our credit card processor takes between 3 and 4%, so you can assume that 8 to 9% of your campaign will come out.
RAMIREZ: IT’S A PROSPECT THAT MIGHT BE PARTICULARLY APPEALING TO PEOPLE OF COLOR. THE FEDERAL RESERVE’S 2021 REPORT ON FIRMS OWNED BY PEOPLE OF COLOR FOUND THAT BLACK- AND LATINO-OWNED BUSINESSES WERE LESS THAN HALF AS LIKELY AS WHITE-OWNED FIRMS TO BE APPROVED FOR LOANS.
BILL HUSTON IS ONE OF INC. MAGAZINE’S TOP 19 GLOBAL EXPERTS ON CROWDFUNDING AND A FOUNDING BOARD MEMBER OF THE BLACK CROWDFUNDING COALITION. HE ENCOURAGES BLACK BUSINESS-OWNERS, IN PARTICULAR, TO USE CROWDFUNDING.
BILL HUSTON: Access to capital is the number one issue that Black founders and Black business owners face. The data is clear and consistent. I like to say that traditional means of financing our businesses is something that we’re not going to be successful with.
RAMIREZ: IT’S PARTICULARLY DIFFICULT GETTING A LOAN IN YEAR ZERO OR YEAR ONE. SOME USE EXISTING FINANCIAL RESOURCES TO GET OVER THE HUMP – PERSONAL OR FAMILY SAVINGS IS THE MOST-USED SOURCE OF STARTUP CAPITAL. BUT IN THE U.S., BLACK FAMILIES’ MEDIAN WEALTH IS LESS THAN 15% THAT OF WHITE FAMILIES.
MAKHUBELE AND YAZIYO, WHO ARE FROM SOUTH AFRICA, HAD SOME PERSONAL SAVINGS TO DRAW ON. BUT IT WASN’T ENOUGH.
MAKHUBELE : I did ask my mom, I was like, by chance–? She said, no. I said, OK.
RAMIREZ: THEY DISCUSSED A LOAN WITH A CREDIT UNION, BUT WEREN’T SURE IF THEY’D BE ABLE TO GET ONE IN THEIR FIRST YEAR.
MAKHUBELE : So it was very clear for us that we were going to have to go a crowdfunding route.
RAMIREZ: HOWEVER, A CROWDFUNDING CAMPAIGN ISN’T A GUARANTEED SUCCESS, NOR A SEAMLESS ESCAPE FROM DISCRIMINATORY PRACTICES.
WITH KICKSTARTER AT LEAST, YOU DON’T GET THE MONEY BACKERS PLEDGE TO YOUR PROJECT UNLESS YOU MEET YOUR GOAL, A DOLLAR AMOUNT BASED ON HOW MUCH MONEY THE CREATOR NEEDS TO REALIZE THEIR PROJECT. JUST UNDER 40% OF PROJECTS ARE SUCCESSFUL, ACCORDING TO KICKSTARTER’S STATISTICS.
MAKHUBELE: You can have a great idea and just not know how to talk about it, and then it’s not going to get people to do anything.
RAMIREZ: OR EVEN IF A CAMPAIGN DOES EVERYTHING RIGHT, THEY CAN’T CONTROL FOR THE AUDIENCE. A 2017 STUDY OF KICKSTARTER PROJECTS PUBLISHED IN MANAGEMENT SCIENCE FOUND THAT “AFRICAN AMERICAN MEN WERE SIGNIFICANTLY LESS LIKELY THAN SIMILAR WHITE FOUNDERS TO REACH THEIR FUNDRAISING GOALS.” RACIAL BIAS IMPACTED HOW MUCH PEOPLE WERE WILLING TO GIVE.
IN RETROSPECT, MAKHUBELE AND YAZIYO ARE GLAD THEY WENT THE CROWDFUNDING ROUTE. BUT IF THE DAY COMES WHEN THEY NEED TO RAISE MORE MONEY, IT PROBABLY WON’T HAPPEN AGAIN.
MAKHUBELE: It’s too – it’s so stressful. It’s 38 days of Hell.
BUT IN THAT 38 DAYS, ROFHIWA EXCEEDED THEIR FUNDRAISING GOAL. THEY RAISED $41,000 FROM OVER A THOUSAND BACKERS. AND THEY’VE BEEN SELLING “BLACK BOOKS AND BLACK COFFEE” FOR OVER A YEAR NOW. IN DURHAM, I’M SOPHIA RAMIREZ.
