Crowdfunding has become a term familiar with many internet surfers. The sites that often come to mind are GoFundMe and Kikstarter. However, not many know that crowdfunding started as early as 2003. In a paper titled “A Brief History of Crowdfunding”, David M. Freedman and Mathew R. Nutting described the birth of a crowdfunding site called ArtistShare:
“Crowdfunding gained traction in the United States when Brian Camelio, a Boston musician and computer programmer, launched ArtistShare in 2003. It started as a website where musicians could seek donations from their fans to produce digital recordings, and has evolved into a fundraising platform for film/video and photography projects as well as music. ArtistShare’s first crowdfunding project was Maria Schneider’s jazz album “Concert in a Garden.” Schneider offered a tiered system of rewards. For a $9.95 contribution, for example, a backer got to be among the first customers to download the album upon its release in 2004. Fans who contributed $250 or more (in addition to receiving an album download) were listed, in the booklet that accompanied the album, as participants who “helped to make this recording possible.” One fan who contributed $10,000 was listed as executive producer. Schneider’s ArtistShare campaign raised about $130,000, enabling her to compose the music, pay her musicians, rent a large recording studio, and produce and market the album (it was sold exclusively through the ArtistShare website), which won a 2005 Grammy Award for best large jazz ensemble album.”
To users of today, the above simply sounds like an above average Patreon account. Crowdfunding has come along way since the early 2000s, which is why when HotelierCo announces that they crowdfund the acquisition of hotels, the news is met with approbation. That’s because after 2010, equity crowdfunding exploded following the success of rewards-based and donations-based crowdfunding platforms. AngelList is one of the oldest and most notable of this most recent type of crowdfunding platform. Several others have followed suit.
What HotelierCo does to differentiate itself from the wide range of crowdfunding platforms available today is to target the niche market of the hotelier business. The Atlanta-based startup claims that it can “allow anyone suitable from the crowd to become a hotel owner — not just accredited investors.” This doesn’t mean that those with large pockets are exempted; Regulation A+ allows for larger investments due to the fact that raises are now limited to $50 million.
The hotels that HotelierCo offers up for investment are boutique luxury hotels that are built from the ground up. Founder and CEO Nathan Kivi calls this phenomenon “the future of hotel investment.” Investors that own a stake in the hotel then get perks like discounted stays. To become a stakeholder, one must be at least 18 years old and invest at least $2,500.
“We want everyone in the U.S. to be Hotelier,” Kivi says.