Honeycomb Credit Turns Crowdfunding Into An Investment Opportunity
Local financial technology company Honeycomb Credit is encouraging people to invest in Pittsburgh businesses through crowdfunding, a departure from donation-based sites like Kickstarter or GoFundMe.
Anyone can back a project on Honeycomb Credit, with most loans in the range of a few hundred dollars. If the project is funded, backers get paid back with interest when the business is up and running. The projects themselves range from about $10,000 to $100,000.
Honeycomb co-founder and CEO George Cook said this model fills a gap in small business financing.
"At the same time, [we're] allowing anyone to invest locally and really participate in their own local economy in a way that they've never been able to do so before," Cook said.
Craig Cozza owns PRO BIKE+RUN, an outdoor activity retailer with five locations in the Pittsburgh area, and is using Honeycomb Credit to raise money to build a cafe inside his North Park location, where customers will be able to purchase coffee, juice, snacks and alcohol.
Cozza admits he doesn't actually need the money raised from the Honeycomb Credit campaign, but he said the crowdfunding model creates a sense of community.
"We want everyone to participate," Cozza siad. "We want kids that might want to put 50 bucks in just to be a part of it, that's neat."
Honeycomb Credit has successfully funded a few dozen local projects, including a Millie's Ice Cream truck and the alt-weekly Pittsburgh Current.