Do you have a great idea but lack the necessary funds to get it off of the ground? Are you an investor looking to support a local Georgia innovator? If you answered yes to either of those questions, then SparkMarket may just be the solution. SparkMarket is a one of a kind neighborhood marketplace designed around a unique Georgia law known as the Invest Georgia Exemption (“IGE”), which lets Georgia businesses advertise investment offerings to everyday Georgia residents. Interested in IGE? Read more below on SparkMarket and then check out a great post from Invest Georgia on IGE resources.
We caught up with Marcus Cannady, VP of SparkMarket, a few weeks ago at Plywood Presents to get the full scoop.
Number of Employees?
Megan Johnson, CEO
Jeffrey Bekiares, COO
Marcus Cannady, VP
Funding or bootstrapped?
100% bootstrapped thus far, however we are currently exploring our options in anticipating of raising expansion capital.
How’d You Get The Idea For It?
The idea was borne from the desire to ‘get more’ out of crowdfunding. Following a string of contributions to for-profit companies with successful Kickstarter campaigns a gnawing desire to deepen the experience developed.
To their credit, most for-profits fundamentally ‘get it.’ Faced with fewer options for financing they’re turning to crowdfunding as a means to push their vision forward. Most appreciate that sans a product to offer in exchange for a backer’s contribution the transaction may leave some wanting.
Eventually the most obvious question arose which was…..”so, why can’t backers invest, and share in the future success of a business anyway?!?” The wholly unsatisfying answer at that time in 2011 was that such transactions are only legal for approx 3% of the US population. These individuals are known as accredited investors. In order to be classified as such you must make upwards of $200K annually (and can reasonably expect to do so going forward), or have $1M in assets not including your primary residence.
As luck would have it the Sec. of State for Georgia soon enacted a Georgia-based securities law regulation known as the Invest Georgia Exemption (more info here) which opened private company investments legal for ALL Georgia residents. Once we uncovered this in 2012 SparkMarket was born!
What will equity crowdfunding mean for ATL/GA?
For a wee bit of context I think it’s important to appreciate a little known fact about GA which is that the state was/ perhaps still is inordinately dependent upon small local banks. Even with the presence of financial institutions like Suntrust, Bank of America, and Wells Fargo much of the state outside of Atlanta relies on these smaller banks. As those smaller institutions went under entrepreneurs saw their options decrease and legislation only further constricted their options.
While we’re not under any illusion that investment crowdfunding is THE singular answer to the gap in small business we are FIRM believers that it has a role to play. It has been estimated that retail/ everyday American investors have ~300 billion in discretionary savings to allocate towards investment crowdfunding. Just imagine how many worthy local ventures could be vetted, seeded accordingly, and flourish as a result investment crowdfunding. Atlanta is currently experiencing a bit of an entrepreneurial renaissance. There are quality people developing quality ideas who are only lacking for precious seed and/ or growth financing. We believe they deserve an opportunity.
Conversely, we’re tired of mindlessly shipping our investment dollars off to Wall Street. I believe there are growing numbers of investors who have as much interest in investing locally was they do in eating locally. The premium we pay for local food is viewed as an investment, of sorts, in supporting local growers, so it’s not too much of a leap to assume this same interest in supporting our local farming economy can be ported over to a desired to support our local business economy. Small businesses support locals 3x as much as national big box alternatives. Spend a dollar locally and it has been estimated $.45 of it will remain local, while only $.15 does so for national retailers. Investing locally in turn has the opportunity to return a true ROI, but also helps drive employment, wealth, and value.
What kind of mentor could you use the most right now?
The type of mentoring that would best assist our development would be from an individual(s) who can help us with our capital for growth strategy.
Is there anything else you need (that money can’t buy)?
A hug. The ups & downs of the start-up grind can be trying. As the saying goes….one day you’re up, the next day you’re in the Mariana Trench….or something like that