Union Collective's new urban winery is seeking local investment through crowdfunding - Technical.ly Baltimore

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Mar. 3, 2020 9:24 am

Union Collective’s new urban winery is seeking local investment through crowdfunding

The Wine Collective is debuting on the Maryland Neighborhood Exchange. Community Wealth Builders' Stephanie Geller talks about launching the grassroots crowdfunding platform.
Inside The Wine Collective.

Inside The Wine Collective.

(Photo by Stephen Babcock)

Correction: This story was updated to reflect the stated return is per quarter. (3/3/20, 9:06 p.m.)

Inside one of the cavernous former warehouse spaces at Medfield’s Union Collective last week, a group of Baltimoreans sipped wine as Enrique Pallares stood in front of the equipment used to make it, talking about a new venture that’s coming to the city.

Pallares is the general director of The Wine Collective, which will make wine inside the space. Operating as a co-op, it’ll also offer farmers and vintners from other wineries around the region access to winemaking equipment.

“We are the first to do it on the East Coast,” Pallares, who cofounded the facility with John Levenberg, said of the urban-focused, custom-winemaking model.

To raise funds that will help complete the tasting room and increase production in year two, The Wine Collective is also turning to a new approach: a locally focused crowdfunding campaign. Through the recently launched Maryland Neighborhood Exchange, The Wine Collective is raising funds via the crowdfunding site Honeycomb Credit.

It’s the first campaign to debut on the Exchange, which was launched through a partnership between Baltimore nonprofit Community Wealth Builders and Neighborhood Associates Corporation. The exchange is designed to allow anyone to contribute money to a business and receive a return via earned interest through crowdfunding, specifically — an opportunity that was made possible via 2012’s federal JOBS Act to the grassroots level, said Community Wealth Builders Director Stephanie Geller.

Working in the city, Geller said she frequently hears from businesses about the challenges of accessing growth capital. Following the law’s passage, she saw a variety of crowdfunding platforms emerge with an industry focus. She believes it can also take a focus on local investment.

“In Maryland there are so many people that, like me, love Baltimore and express that by wearing purple, shopping at farmers markets and buying local,” she said. “I’m aware that we can also support the local economy through these changes in laws with our investment.”

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To run the campaigns, the Exchange is partnering with a pair of portals that are federally licensed and allow businesses to access loans that are raised through crowdfunding: Honeycomb Credit, which focuses on businesses raising $10,000 to 100,000, and WeFunder, where businesses can raise funds starting at $50,000, and up to the federally-set limit of $1.07 million. Community Wealth Builders will be referring businesses to the sites, and working with them along the way to ensure their campaigns are successful, Geller said.

The partnership is focused on building ties between the community and local businesses.

“When you can convert your customers into investors, they’re going to be going to your business as often as they can because they want you to succeed. They’ll be talking about you, and advocating for you. It’s free marketing in a sense,” Geller said. The latter is something we’ve often heard about crowdfunding — don’t sleep on it as a way to get the word out.

With a tangible product that most people know (wine), a co-op model and a desire to create jobs locally, Geller said The Wine Collective emerged as a good fit for the crowdfunding platform. It’s also in Union Collective, putting it right next to ventures like UNION Craft Brewing and Vent Coffee Roasters that will provide lots of foot traffic. Crowdfunding’s ability to make anyone an investor lends itself to businesses that have the kind of immediate recognition of a food and beverage venture.

The Wine Collective is looking to borrow up to $107,000, with an interest rate of 10% over a 60-month term, according to the crowdfunding site. The site states that investors could get a return of $63.74 per quarter on a $1,000 investment.

“They’re providing a good or service that the community is excited about,” Geller said. “This is really for businesses that communities want to see thrive.”

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