Eagle County entrepreneurs ‘crowd-funding’ new product
EAGLE COUNTY, Colorado – Robin Behrstock and partner Ryan Stecker are trying to fill a need. But first, they need capital. For that, the pair are trying a new idea – “crowd funding.”
The partners – who founded iZen, which produces bamboo computer keyboards and iPad stands – are using a new website that brings together fledgling companies and small investors interested in helping them.
Investors can contribute just about any small amount, but those who contribute $85 receive a keyboard, a discount from the suggested retail price of $99, plus $11 in shipping.
Under the old laws regarding small-investment funding, products were the only way companies could reward investors. But a new law – passed by Congress and signed into law April 4 by President Obama – allows start-ups to offer equity in their companies. The law also allows start-ups to raise up to $1 million a year without much in the way of disclosure.
The iZen founders have more modest goals. In the current pitch to small investors on http://www.kickstarter.com, the partners hoped to raise $18,000 in 31 days. If the company didn’t hit that goal, investors’ credit cards wouldn’t be charged.
But investors like the idea of a keyboard that claims to be made of 92 percent bamboo – other components can be recycled, and the bamboo itself can be composted or will degrade in a landfill. With several days left in the funding period, iZen had raised more than $21,000.
When the funding period is over, iZen will be able to pay for a new round of production. After that, the company may be able to show traditional lenders there’s a demand for its products.
That seems to be the case at a couple of local retail outlets – the Bookworm of Edwards and High Country Computer Services, also in Edwards.
“People look at them and say ‘That’s cool!’,” High Country Computer Services co-owner Karen Allen said. “It’s a unique, environmentally friendly product.”
At the Bookworm, Kelli Kostroski said the keyboards have been well-received.
“It’s beautiful,” Kostroski said. “People see it and say they’d like to own one.”
But it took more than displays at a couple of stores to gin up enough interest in iZen to make the latest money-raising effort successful.
Behrstock said the company put out word about the Kickstarter effort through Facebook and Twitter, as well as tech-related and environmentally friendly websites including http://www.treehugger.com and http://www.grist.org.
Behrstock said iZen probably won’t use any more crowd-funding as it moves from startup to started, but she’s a big fan of the idea.
“So many other companies can use it, and so can nonprofits,” she said. “There are a lot of other ways to use crowd funding.”
Business Editor Scott N. Miller can be reached at 970-748-2930 or firstname.lastname@example.org.