How we Crowd Funded the Purchase of a Whole Herd of Beef

Recently, there hasn't been a week gone by that I am offered a killer deal from one of our beef supply partners around the world, they may have a container of product that might be mis-labelled or held back from a bad paying customer that didn’t make the pre-payment etc, and the supplier is looking to offload it and quick! An incredible deal can be negotiated in these situations and our business in Hong Kong has the unique ability to process, market and sell the product in a very short period of time through our website www.steak-king.com  – if it is priced right!  But these offers are more often than not for a full sea container that requires pre-payment, and up until now we have never had the cash lying around to take advantage of these opportunities.

Recently an offer came in from a reputable producer for 15 tonnes of wagyu Ribeye & Striploin that had been destined for Saudi Arabia, however the wholesaler there had not paid the deposit and backed out of the deal. Now the producer has 2 options in this situation; 1. Re-pack the entire order and label it for a different market or 2. Try and sell it at a discounted rate  ‘as is’ to someone that will process it anyway and doesn’t care that it has Arabic labelling on the cartons. This is where we came in, there are only 2 countries in the world that would be able to accept product labelled for a different country; Hong Kong & Singapore. We made an offer on the product and set about raising the funds to pay for it.

We needed to solve the cash flow problem and benefit from this amazing deal but how to do it? We approached the banks looking for credit terms and they almost fell off their comfortable chairs laughing at the idea of helping out an SME to buy stock. We thought about taking on investors but decided that we didn’t want to give away equity in our business just yet.  After brainstorming, one idea came to light that involved Crowd Funding through our loyal customers.

So we reached out to our highest spending and longest serving members with a simple email to explain the problem, and that we needed their help but we are also prepared to make it worth their while by paying  back 8% interest on the money they loaned to us within 4 - 6 months

In addition, we would sweeten the deal with some of the product for free and a really great discount code to be used on our online store and in our restaurants so that they could benefit from being involved in this scheme and feel like part of our family.

The parties that showed interest were invited to a dinner/presentation in a private room above one of our restaurants and they actually got to sample the steaks that we were proposing to buy.  Over 50 people signed up and 25 came to the dinner!

After dinner we went through the deal in detail, gave out samples of the loan agreement and asked them to pledge an amount (minimum HK$100k) so that we knew where we stood.

Boom we doubled our minimum subscription requirements immediately! 

The next day we followed up with an invite to our warehouse so they can see for themselves what we do and where we are. Docs were signed and monies transferred, the sea container was paid for and now its on its way to Hong Kong! We have approximately 3 weeks to build our marketing messages and start selling this product before it even arrives in Hong Kong.

As other offers are constantly coming our way we have decided to hold another investment evening so that we can get our loan partners in place for when the opportunity arises in the near future.  If you are interested in getting involved feel free to sign up without obligation and we will invite you to our next dinner.