Crowdfunding platform & incubator team to give startups early leg-up

By Elizabeth Crawford

- Last updated on GMT

Source: iStock
Source: iStock

Related tags Venture capital Marketing

An unconventional partnership between the crowdfunding website Barnraiser and KRAVE Jerky founder Jon Sebastiani’s new incubator and venture fund Sonoma Brands will create a new paradigm for fundraising and marketing that promises earlier, more sustained growth potential.

Crowdfunding and venture capitalism are “very different types of fundraising vehicles, but these models can work hand in hand to make it easier for entrepreneurs to grow steadily by getting the right type of capital in the form they need, when they need it,”​ said Eileen Gordon Chiarello, who along with her husband founded Barnraiser as a crowdfunding website dedicated to putting $1 billion in the hands of innovators who are improving how people eat and live.

She explained that traditional reward-based crowdfunding platforms, like Barnraiser, are a great way for startups to raise limited capital without diluting equity, and for firms of all sizes to generate consumer interest, pre-sell products or concept-test new ideas – which are all indicators venture fund investors use to evaluate a company’s potential success.

But, the capital that can be raised through crowdfunding often is limited, and may not be enough for a small, but promising company, to level-up to a mid-sized firm with recognized staying power, Chiarello acknowledged.

Often for that level of growth, companies need equity on the scale more easily achieved through venture capitalist investment firms and incubators, such as Sonoma Brands, which Sebastiani launched earlier this year following the sale of his wildly successful meat snacks company to Hershey​. 

As an incubator, in addition to a venture fund company, Sebastiani said that Sonoma Brands also brings to the partnership the tools necessary for firms featured on Barnraiser to take the step next for growth when their campaigns end.

Those tools are the same ones Sonoma offers larger firms that are potential investment targets, and they include a “strong team”​ of sales advisers, who can walk entrepreneurs at Barnraiser through channel selection and how to with brokers and distributors. Sonoma Brands also brings a marketing team that could provide field and social marketing expertise and a finance and operations crew, he added, all of which could help better position firms in their formative stages to maximize their early potential.

The two entities plan to make these tools available through workshops and mentoring programs.

In exchange for extending it services through Barnraiser, the investors with Sonoma Brands will gain a sneak peek and early access to rising stars.

“No question that we will be on the sidelines rooting for some of these companies to reach the point where they are looking for capital – that will be the optimal outcome,”​ Sebastiani said.

 Barnraiser offers consumer exposure to firms of all sizes

In exchange, Barnraiser also could help the more mature companies that partner with Sonoma Brands create advanced marketing campaigns that can generate substantial consumer buzz through crowdfunding campaigns, Chiarello said.

She explained that crowdfunding isn’t always about only capital.

“Crowdfunding increasingly is being used as a marketing tool for larger companies that are not necessarily looking for money, but rather exposure and the consumer excitement that crowdfunding campaigns can create,”​ Chiarello said.

She added that Barnraiser can offer “high touch”​ benefits, such as social media tools, PR and online marketing advice.

Wanted: Passionate entrepreneurs

The partners are open-minded about the types of entrepreneurs with which they will work, but they need to be passionate and pushing the boundaries in their categories, Sebastiani said.

“We are looking for entrepreneurs who are really pushing creativity and invigorating the status quo across all ranges of snack foods, health and beauty – not just one food segment,”​ he said.

Chiarello added Barnraiser has a slightly broader spectrum than Sonoma Brands in that it is less worried about size and scale, and works with farmers, educators, supplement companies and others as long as they are “moving the needle”​ towards health, wellness and sustainability. “But in terms of food and beverage, we are 100% aligned with Sonoma Brands,”​ she added.

The two partners also are completely aligned in their ultimate goal of finding exciting entrepreneurs early so that they can immediately begin nurturing them and give them a better shot of attracting investors early and growing faster.

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