Nippitaty Distillery Recommends Crowdfunding with Honeycomb over Kickstarter
Updated: Jun 18
One of our most recent successful campaigns was Nippitaty Distillery, South Carolina’s first organic small-batch distillery. Nippitaty specializes in gin and vodka, and after racking up several awards for their spirits, they decided it was time to expand their tasting room.
Traxler Littlejohn, the owner of Nippitaty Distillery, was looking for a way to finance this next step, and he landed on a Kickstarter campaign. However, he found that his expectations weren’t met, and the campaign ultimately failed.
So, how did Traxler decide to give crowdfunding another chance with Honeycomb, running a campaign that raised $68,827? Read on to find out!
What happens when a Kickstarter campaign needs a kick-start?
When he was searching for options to finance Nippitaty Distillery’s next step, building a taproom in a renovated 1950’s-era service station in North Charleston’s Park Circle neighborhood, Traxler decided he’d give crowdfunding a try, and set up a Kickstarter campaign.
As a rewards crowdfunding platform, Kickstarter is a great option for entrepreneurs and small businesses who are starting off to get funding for their projects. A person giving to a Kickstarter or another reward crowdfunding campaign might get a thank-you note from the owner, or at certain levels of giving receive rewards such as merchandise from the business or a free tasting. However, the main motivation behind a rewards crowdfunding campaign tends to be pretty altruistic, with people contributing without necessarily expecting anything in return.
It’s always a leap when an entrepreneur decides to start a crowdfunding campaign. After all, you’re inviting people to contribute to your campaign, opening yourself up for money. However, what happens when nothing happens?
“About halfway through I noticed it wasn’t gaining any traction no matter what we put out social media-wise or post-wise,” said Traxler. “I was telling my wife, I really don’t think this is gonna work because if it was me [as a Kickstarter contributor], I wouldn’t want to give a lot because you’re not getting a lot back.”
What went wrong? Was it marketing? Nippitaty Distillery was approached by several marketing firms which look at Kickstarter campaigns. They decided to try one of them out, and paid $250 for them to blast the campaign out, and saw zero response from possible contributors.
It seemed no matter what they tried, this Kickstarter just wasn’t going anywhere. Traxler was going to have to look elsewhere for funding for his new taproom.
Honeycomb was the right flavor of crowdfunding
So, after the Kickstarter campaign failed, what made Traxler want to give crowdfunding another go?
He knew there were other options out there to help him fund his distillery. After he started his Kickstarter, he was actually approached by both Honeycomb and another crowd-investing platform. However, he wanted to give Kickstarter “a fair shake” and see where it went.
When the Kickstarter campaign ended, Traxler decided to go with a Honeycomb campaign, and he saw a world of difference.
See, crowdfunding comes in many different flavors—rewards, debt, equity, just to name a few—and depending on the stage of your business, some work better than others. If you’re a new business looking to test out product-market fit, Kickstarter and rewards crowdfunding may be a better fit for you. People contributing to a Kickstarter campaign are looking to support an early concept, and expect a thank you note or free drink in return.
If your small business has built up some traction like Traxler’s and has avid fans, debt crowdfunding may be a stronger marketing and funding tool for you. Debt crowdfunding gives your customers and fans the ability to invest their money into your small business, with the opportunity to earn a return on it—around 5-12% interest on Honeycomb.
There are many different misconceptions about crowdfunding, especially when it comes to small businesses. However, Honeycomb makes crowdfunding easy and mutually beneficial through our unique platform and by giving crowdfunding guidance and support every step of the way.
“I think the most important thing [in going with Honeycomb] was that Honeycomb seemed like a small business like me. It wasn’t trying to do a quick sale, there was a lot of hand-holding, which was nice because it was kind of deflating when I didn’t achieve those goals after the Kickstarter,” says Traxler.
He also found a lot of difference in how much personal contact he had with the Honeycomb team when setting up his campaign. “There’s a whole team of people at Honeycomb that is going to work with you, get on calls, set up Zoom sessions even from the very beginning.”
“I think one of the biggest points of fear was wondering if we were going to wear people down,” says Traxler. “If we do our Kickstarter, and start blasting everywhere about it, saying ‘give us money,’ for an entire month, then we come back and say, ‘Oh, that didn’t work, let’s try this [Honeycomb] instead...’ It was kind of nerve-wracking.”
Turns out those fears didn’t come to fruition, though, because Nippitaty’s campaign actually raised 230% of their minimum goal! Even though these campaigns were run back-to-back, Traxler’s customers were still willing to invest in his distillery taproom, because this time they would receive a return on their contribution.
Investing over Giving
Traxler sees the main reason for the vast difference between his successful Honeycomb campaign and his unsuccessful Kickstarter was the fact that his customers could receive a return on their contribution to the company.
“[With a Kickstarter campaign] You’re getting nothing back, except maybe some cool swag and thank you, and making yourself feel better for helping out a small business,” says Traxler. “But in all real sense, you’re not gaining a return on that. And with me trying to be as frugal with my personal money as I can, that’s something that I would personally only kick a couple of bucks too.”
For Traxler, the opportunity to invest in his business made for a much more powerful message when introducing his Honeycomb campaign to his customers, and it’s a more reciprocal relationship between the community and himself as a business owner.
“You can play on Albert, Ameritrade, whatever all you want, and you won’t get to go to that place, meet the owner, and get any face time with them, whereas with us, we’re your local distillery down the street. This is me, the owner, here’s a picture of my family, it’s a lot more personal for people because we put a face to the name and a face to the campaign.”
Building relationships while building a taproom
Another major difference Traxler saw between the two crowdfunding campaigns was his community’s response.
“I think a lot of us have seen so many restaurants, distilleries, and breweries shutting down over the years, and everyone’s missing their favorite spot,” Traxler says. “Now, everyone’s asking, ‘How can we help? What can we do?’”
Traxler sees his Honeycomb campaign as a way that his customers could support him beyond buying bottles of his gin and vodka. He says, “Our community invested in us because they wanted to see us there in Park Circle, thriving where so many other people have shut down because they weren’t given this opportunity.”
“I think that it makes sense,” says Traxler. “I would rather pay you back as my fan, as a supporter of local business, as someone who wants to help, than I would Chase Bank.”
“At the same time, you [as a customer] get to come to our place, see where it’s at, and you’ll be a marketer for our place. Now our customers can say, ‘We did this, we helped them, we did these wonderful things, and we want to support them.’ I can get a larger fan base from doing all that because the customers get to know who and what is behind the campaign.”
Honeycomb is crowdfunding with an added boost
If you’ve tried rewards or donation crowdfunding before through platforms like Kickstarter or GoFundMe and experienced tepid results, you wouldn’t be the first.
Why not give it another shot though, with a twist! Honeycomb allows you to give your customers more than just a thank-you for their contribution, deepening your relationship with them while allowing you to meet your growth goals.
Learn more about how Honeycomb Credit uses crowdfunding to help small business owners like Traxler take their next step by signing up below and checking out www.honeycomb.com/grow