The wildly popular company employs 55 staff and maintains outlets in Ponsonby and Kingsland, as well as producing the unbakery cookbook and supplying packaged cereals and snacks to some supermarkets. It launched a Pledge Me fundraising campaign on February 17, earning more than $10,000 during the first day alone.
Those who pledged more than $5 received vouchers entitling them to rewards from Little Bird’s existing stores, such as concession cards for juices and cakes.
Many pledgers appeared to support Little Bird from an ideological perspective – one woman left a comment saying she lived in Melbourne and wanted the brand to expand worldwide.
Owners Megan May and Jeremy Bennett said on their Pledge Me page that the unusual move was precipated by a cashflow emergency.
Little Bird had been supported by loans from finance company Prometheus Finance, which appointed PwC chartered accountants John Fisk and Jeremy Morley as receivers on December 17 when its own efforts to raise capital to support expansion fell short.
PwC said Prometheus Finance’s directors believed the company was at risk of breaching the minimum capital adequacy covenant in the trust deed in the near future.
Megan and Jeremy said they found out Prometheus had gone into receivership the day they signed the lease for their new location, and had already invested all their savings into the company.
“This is a real bummer for all customers of Prometheus, and a massive loss for social lending in NZ. For Little Bird, it means no more access to finance.”
Megan and Jeremy said in a video that they received weekly requests to open new cafes, and were going as fast as they could to expand. The $30,000 will cover refrigerated display cabinets, fridges, freezers, blenders, mixers, scales, dehydrators and other equipment.
Jeremy told The Register that the Pledge Me campaign was based on a crowdfunding model and should not be confused with a request for charitable donations.
“There are donations models, such as Givealittle in NZ for donations to causes and charities, but Pledge Me runs rewards or equity based campaigns. We are not asking for donations, rather offering rewards based on our normal commercial offerings in return for pledges.”
He said the campaign amounted to a “presales” model, pointing out that the rewards all came at a discount from Little Bird’s in-store prices. Little Bird was not the first business to try this, he said, but with its decent following, he hoped it would be successful.
“We get the cash up front, so [it’s] good for a cash injection, but we still have the obligations to fulfill all rewards.”
Due to the way Pledge Me is structured, Little Bird will only receive its rewards if it hits the funding target by March 3. One week into the campaign, it had topped $34,000. With a stretch goal of $55,000, Little Bird could have hit on the next big financing solution for much-beloved small businesses.