From Action Target Newsletter (actiontarget.com).
In the old days, if you wanted money to finance a project or new business you could talk to local business investors, obtain a small business loan, or beg a rich uncle. If none of those worked, then you put the project on the back burner and waited to win the lottery. It didn’t matter that there were tons of people who wanted whatever product or service you had to offer. If the people with the money weren’t convinced, then you really didn’t have any other options.
Crowdfunding, where individuals contribute small amounts via online campaign, started in the late 1990’s and has been used to fund bands, albums, movies, art projects, inventions and games. Online companies now provide services to organize the effort. Within the past decade of the creation of crowdfunding, a total of $2.7 billion has been raised in 2012 alone. The JOBS (Jumpstart Our Business Startups) Act signed in April 2012 opens the doors for startups to solicit equity financing from the general public pending implementation of regulations by the SEC.
Business partners Rob Krop and Matthew Jones are doing this with a campaign to build an indoor shooting range in Frederick, Maryland, called The Machine Gun Nest (themachinegunnest.com). The pair started the project to build an indoor range in a neglected area and create responsible gun owners one experience at a time, settling on the Indiegogo (indiegogo.com). The service allows people to donate to The Machine Gun Nest’s campaign by purchasing one of several perks including pistol and machine gun rentals, one year memberships, family memberships, and lifetime memberships. They also offer more extensive perks for larger donations of $5,000 and $10,000 like premier access to new machine guns and having a shooting lane named after you for sponsor donations.
The Machine Gun Nest has seen initial success with nearly $22,000 raised in the first 24 hours of the campaign being launched, but beyond donations, their campaign has increased the project’s visibility and built awareness among their future customers. “This provides a venue where we can not only raise capital, but we can raise awareness and reward people for believing in us before the project is created by giving them discounts for their donations,” Jones said. “It creates awareness. It creates a buzz. And everyone can see it happen right there on our campaign. They see dollars that are going toward something that they also care about.”
Other shooting ranges have attempted to finance themselves through Indiegogo in the past, but only one managed to raise more than $195 after a full 60-day campaign. The difference with The Machine Gun Nest campaign, Krop says, is that they’re hitting the pavement and talking to people about it in person as well as online.
“One of the things that has really helped us is just getting out in front of people. We got a booth at the local gun show and that was huge. We got a great response. People seeing that we’re moving forward and that we’re out there in person gave a lot more validity to what we’re doing, and people felt more comfortable donating,” Krop said.
The Machine Gun Nest has the chance to become the first shooting range ever to be successfully financed through crowdfunding and may pave the way for other ranges like it. With crowdfunding expected to explode in the next year and with the implementation of public equity financing coming soon, the shooting range industry has a unique opportunity to bypass traditional financing options and get direct support from the shooting community itself.
Read more in our October 2013 issue. Back issues are available.