fairafric starts Seedrs Campaign
We are very proud to announce that we are in the middle of making the next big step with fairafric. In the 20 months since foundation we’ve grown in a pace that left us breathless at times.
Since our first Kickstarter campaign in March/April 2016 we’ve gone a far way. Today we work with wholesale accounts to which we ship chocolate by the pallet (one pallet = 4,800 bars!), close to 200 retailers have fairafric on their shelves and we fulfill countless orders every day with our own seamless processes, did I mention all our chocolate is organically certified?
When I started the fairafric journey late in 2015 I was totally aware of the fact that all the odds were stacked against me, yet I felt the mission to bring value creation to resources that grow in Africa to Africa was way too important not to try it. I couldn’t be prouder of what we’ve achieved and I couldn’t have dreamed of the open arms we run into when approaching people.
We have run into a situation where things can become big, really big!! When I look into my notes from the years in which the idea was shaped I see that my plan was to sell 1,000 to 2,000 bars per month in order to cover costs and grow organically in the first years while still working. If I look at the 92,500 bars that we’ve imported less than 2 months ago and see that two-thirds of that is already shipped to customers I can’t believe we’ve gotten to these volumes so quickly.
And we couldn’t have wouldn’t it be for our amazing customers, our Kickstarter backers and the incredible circle of friends that have helped me out with their time, well thought out critique and who have also put up money to get things going. My incredible wife helped fairafric to get where we are almost every single day of the journey, has accepted a husband who is working and travelling literally nonstop and doesn’t flick an eye as savings and the once stable income vanish into thin air.
Why not look for an investor
We are at a classic point of every growing business that needs to produce the goods it sells, the lack of money although sales are great. The chocolate we produce in January is sold in March, April and May. Problem is: We’ve paid for the ingredients in November, the premium for the cooperative has been paid in August. In order to sell more in half a year we need a lot of money now. We’ve reached a point where our bank has said we’ve all the credit we can get for now and our friends and family have already chipped in heavily. Everybody says at this point: Go look for an investor to keep growing so quickly.
And sure, that makes sense, or does it? We’ve started to talk to potential investors in Germany a long time ago. I’ve explained over and over the outstanding social impact we have in Ghana and that our customers love us for the fact that we have a great product and a fantastic story. But that’s just a USP (Unique Selling Proposition) for investors, what they are really after is an exit strategy, who will buy us when and how quickly can they make a profit of fairafric.
That hasn’t really been a surprise, so fellow social entrepreneurs told me to look for impact investors, and so I did. Only problem, we have our impact in Africa, sorry, that’s not the area of intended impact for European Impact Investors (I know, would be funny if it wasn’t so tragic).
The crowd as investor
While I was starting to have a look again at potential investors and asked other mission-driven startups how they went about funding once they started to need much more money, a friend asked me why we are not asking our crowd for investment. And it’s true, people have asked us time and again if we needed money, it was just not realistic to sell many different investors very small stakes in the company.
While Marc (Co-Founder) and I were discussing the many advantages of having hundreds of “mini investors” (having hundreds of brand ambassadors, getting valuable feedback from those, bringing our Ghanaian partners into the company) we are still a German GmbH with all its limitations. One is, that whenever you want to take a new investor on board or change something really important about the company, you’ll need to go with all the existing investors to a notary before registering the changes with the local court.
That’s very costly if you have a handful of investors who all live in the same city. It’s practically impossible to do that with 200 people from around the world who really believe in you and your mission. That’s when we discovered Seedrs.
Many of our early supporters and almost all our family and friends are Germans as we are, so why aren’t we using a German crowd-investing platform? The reason is quite simple, there is no German platform that allows us to sell very small shares of the company to investors, as the German law makes that impossible.
In the UK, companies get funded from their crowd almost daily with Seedrs and Crowdcube being the biggest platforms. They do exactly what we are looking for, they offer investors a way to invest very small amounts (starting at €10) into a business at no cost (fees are only applicable once the investment turns a profit).
Seedrs has helped more than 500 Startups to collect funding from their fan-base, business angels and the general public. And that’s exactly what we are planning now. By investing in fairafric our investors enable us to continue to work our asses off to shape a fairer, more sustainable chocolate world and to create more real jobs in Africa.
What do investors get?
Investors receive a real share in fairafric, they will become co-owners of the company. Seedrs will hold their share for them in a separate company that will keep the shares safe even in the very unlikely event of a bankruptcy of Seedrs itself.
The ownership in a startup brings with it the chances and risks involved in investing in early stage businesses. We plan to use the money to increase our production and hire more staff for operations in Ghana and Germany. We’ve won retailers, wholesalers and customers that love fairafric and to work with us, so we are convinced that we can put the money we receive to very good use.
The return investors make depends on fairafric’s future growth and how well the business works overall. The company is now valued at €1.97 million and our plan is to constantly increase the value of the company. If the business fails and the company goes bankrupt, your investment might become worthless.
Any return an investor makes would be either by selling their shares at a higher valuation than today or by receiving dividends. Our goal is to quickly grow our sales as this enables us to hire more colleagues in Ghana, so paying dividends is something we are not planning in the short run as we will invest heavily in our growth. Seedrs offers investors to sell their shares on the platform itself to other investors who are interested to increase their investment. In case fairafric gets taken over by another company, which we are not planning, investors would get their fair share of the price this investor pays for the company.
Goals and Vision
Our vision is to become a world renown brand for fully Made in Africa products including but not limited to chocolate, tea, coffee, dried fruits, nuts, leather products and accessories.
Our goal is to reach sales of €5 million by the end of 2022 and to keep aggressively growing thereafter with chocolate as our core product line.
If you are interested in investing into our unique story, please follow this link to our Seedrs campaign: