Although at Crowdfunding Masterminds we focus mostly on rewards based crowdfunding, i.e. Kickstarter & Indiegogo type of stuff, its getting hard to ignore the buzz surrounding equity crowdfunding. We think that this is a really good thing for all crowdfunders, because it makes the entire industry more legitimate. Now, here’s the news:
West Sacramento-based startup California Safe Soil is turning to another startup to help raise money for growth.
California Safe Soil uses enzymes to digest supermarket food waste into liquid soil amendments in three hours. Traditional composting takes six months. Grocery stores usually have to pay to have waste hauled away to landfills, but Safe Soil collects it for free.
The company needs $7.1 million to build a new plant in 80,000 square-feet of warehouse space at McClellan Business Park. The plant will have 32 times the capacity of the pilot plant the company has operated in West Sacramento since 2012.
To raise $6 million of the needed capital, the company has turned to a new resource for investment: equity crowdfunding. California Safe Soil has launched the campaign on San Francisco-based site AgFunder.
AgFunder is similar to crowdfunding sites such as Kickstarter, but with a key difference: Those who contribute money get ownership stakes in return.
That kind of investing was made possible by the 2012 JOBS Act, which cleared some regulatory hurdles. Under Securities and Exchange Commission rules, though, only accredited investors may participate. Those are investors with $1 million in addition to the value of their home, or an annual income in excess of $200,000.
Founded two years, ago, AgFunder has provided funding so far to eight companies, five of them in California.
Increasingly large investors and venture capital firms are putting money into food and agricultural technology, said Rob Leclerc, CEO of AgFunder.
“We think that this has been an under-served area,” he said. “People are becoming more interested in where their food comes from.”
This Article Appeared on Biz Journals, written by Mark Anderson