Eat My Lunch plans $2m equity crowdfunding campaign
Eat My Lunch, the “buy one, gift one” social enterprise supplying lunches for school kids, is looking to raise $2 million through crowdfunding platform PledgeMe.
The company wants to use the money to open an Auckland store, trial a programme with parents, and investigate expanding the concept overseas.
Eat My Lunch will launch the fundraising campaign in May.
It’s not the company’s first foray into crowdfunding - it’s used Pledge Me twice before. But it’s the first time it’s gone the equity crowdfunding route - where supporters get to own a share in the business.
Details of the offer aren’t yet available, but Eat My Lunch chief executive Lisa King says she also investigated more traditional private investment, but that was problematic.
“We were looking at private capital, particularly given the fact that impact investment funds are starting to emerge in the private market - something that wasn’t available even 18 months ago.
“But we found they expect a higher percentage return from us than they would from a normal company - presumably because they see us as a bigger risk.”
King says one of the problems facing social enterprises - companies set up to make money but also do good - is they aren’t recognised in the 1993 Companies Act.
And investors are wary.
“There’s no clarity around the legal structure and what they expect.”
King was one of the company leaders interviewed for a report released yesterday by social enterprise development organisation Ākina and the Department of Internal Affairs, funded by the Law Foundation.
Businessman and philanthropist Neville Jordan says in the introduction to the report, 'Structuring for impact: Evolving legal structures for business in New Zealand' that New Zealand’s legal structures and financial expectations "are hindering social enterprises being able to reach their full potential.
“By dismantling the barriers that the current legal structures present for social enterprise, we can catalyse private sector-led solutions, and demonstrate how impact through enterprise can be achieved across the entire economy."
PledgeMe chief executive Anna Guenther says the equity crowdfunding model is a good one for social enterprises because it allows investors to support companies they believe in.
"Half of the companies that come through us have social or environmental goals."
While the average amount raised through PledgeMe is $800,000, Guenther says there have been several $2 million campaigns in the past - mostly led by women.
These include Otago chocolate company Ocho, and food and cafe business Little Bird Organics.
King says Eat My Lunch wants the money to expand. Plans include opening a store at Auckland’s Britomart, so people can come in to buy their lunch, rather than ordering online. She also wants to explore a franchise model.
“We’ve had some interest from overseas to take the concept abroad.”