Crowdfunding Site Bolstr Helps Small Businesses Secure Capital
Black Enterprise Magazine January-March 2019 Issue

Charlie Tribbett and Larry Baker, co-founders of Bolstr created the platform to help mainstream businesses raise capital for their businesses (Image: Source)

Bolstr is a community funding marketplace for small businesses. Data shows that 80% of donations to successful crowdfunding campaigns come from the social network of the person asking. So after meeting each other as interns at JP Morgan Chase, co-founders Charlie Tribbett and Larry Baker, both 28, saw a way to help entrepreneurs engage local investors without breaching SEC laws.

“We wanted to do something that solved a market problem,” says Tribbett. “Mainstreet businesses are having a terrible time trying to access working capital.”

Before the Jumpstart Our Businesses Startup Act was enacted a year ago, it was illegal to publicly solicit investment capital, unless you utilized Regulation D of the Securities Act of 1933. But complying with Regulation D could become extremely costly, especially if you had investors in different states. In that situation, an entrepreneur would probably need to hire attorneys in every state where a potential investor resided. Even after the JOBS Act, complying with the securities regulations, which are different in all 50 states, can be like playing minecraft with your eyes shut.

“On Bolstr, a lot of this work is automated similar to how Turbotax automates your taxes, so the legal fees for the attorneys in our network are fixed, and reduced by over 70%,” explains Tribbett.

Bolstr thereby decreases the legal costs businesses incur to source smaller amounts of capital from a larger group of people. Among Bolstr’s investor’s are John Rogers of Ariel Investments LLC and Doug Lebda, founder and CEO of Lending Tree.

“As a business solicits capital through Bolstr, the platform automatically calibrates to their raise depending on where their investors are located to make sure they remain in compliance with every state in which they accept investor capital from,” explains Baker.

In celebration of the one year anniversary of the JOBS Act this month, Bolstr is Black Enterprise’s Tech Startup of the Week. You can learn more from Tribbett and Baker at the 2013 Black Enterprise Entrepreneurs Conference, held May 15-18, in Columbus, Ohio. Tribbett will be a panelists for “The Art of Uncovering Alternative Financing.”

Here, Tribbett and Baker provide three tips on landing socially motivated investments through “equity-crowdfunding” platforms like Bolstr:

  • Those that do best are consumer facing businesses. For example, a business that has high foot traffic does better than a home-based business.
  • A great business pitch happens when a business owner is able to connect with the community. It incentivizes them to really be a part of that local business.
  • A lot of small business owners are reluctant to ask people for money. We view Bolstr as a way to give people in the community an opportunity to contribute to a local business that is growing and could employ their cousins or children in the future.

Marcia Wade Talbert

Marcia is a multimedia content producer focusing on technology at Black Enterprise Magazine. In this capacity she writes and assigns stories to educate readers about social media; digital integration; gadgets, apps, and software for business and professional development; minority tech startups; and careers in STEM (Science, Technology, Engineering, and Mathematics). In 2012, she received two Salute to Excellence Awards from the National Association of Black Journalists and was recognized by Blacks in Technology (BiT) as one of the Top 10 Black achievers in the tech arena for 2011 at SXSW in Austin, Texas. She has spoken about technology on panels for New York Social Media Week, at The 2012 Rainbow/PUSH Wall Street Summit, as well as at Black Enterprise’s Entrepreneurs Conference and Women of Power Summit. In 2011, chose her as one of 28 People of Color Impacting the Social Web, and through crowdsourcing she was listed as one of BlackWeb2.0's/HP's 50 Most Notable African American Tastemakers in Social Media and Technology for 2010. Since taking on the role of Tech editor in September 2010, she has conceived and produced five cover stories on Technology and/or STEM and countless articles, videos, and slideshows online. Before joining as an interactive general assignment reporter in 2008, she freelanced with Black Enterprise beginning in 2003 while working as the technical editor at Prepared Foods magazine. There she further honed her writing skills and became an authority on food ingredients, including ingredients used in food fortification and enrichment. Meanwhile, her freelancing with Black Enterprise and helped her stay current on issues pertaining to the financial and business welfare of African Americans. As a general reporter for Black Enterprise she attended and reported on the Democratic and Republican National Conventions, where she interviewed Valerie Jarrett, senior advisor and assistant to President Barack Obama and U.S. Attorney General Eric Holder. Marcia has a Bachelor of Science degree in Agriculture with an emphasis in food science from the University of Minnesota, and a Master of Science degree in journalism from Roosevelt University in Chicago. En route to her secondary degree, she served as the editor-in-chief of the Roosevelt University Torch, a weekly, student-run newspaper. An avid photographer and videographer, Marcia is one of several employees at BLACK ENTERPRISE who interned for the publishing company as a college student. She lives in New Jersey with her husband, a food scientist; her seventeen-month-old daughter; and “The Cat”, but still considers Chicago home.