3c hapter - Index of

144 Locavesting
ProFounder’s fi rst client, a Hawaiian treat shop called Uncle
Clay’s House of Pure Aloha, epitomizes the type of entrepreneur
that ProFounder seeks to help. Uncle Clay’s is beloved in east
Honolulu, where many traditional “shave ice” shops like this have
given way to chain stores. (Shave ice is sort of like a Slurpee.)
The shop’s offi cial name is Doe Fang, but everyone knows it as
Uncle Clay’s, for its wide- grinned owner. It’s the kind of place
where the walls are lined with photos and postcards from friends
near and far. Everyone is treated as ohana, or family. “If you come
to Uncle Clay’s alone, you’ll leave with 10 friends,” says Bronson
Chang, Uncle Clay’s nephew.
Friendly, yes. But hardly the type of thing a VC would be
interested in.
Like other Hawaiian mom & pops, Uncle Clay’s has been
struggling lately with the encroachment of national chains and
the sluggish economy. So Chang, fresh out of University of
Southern California’s MBA program, has jumped in to help. The
strip mall where the shop is located is being renovated, so the pair
are taking the opportunity to launch a new and improved Uncle
Chang’s that will reinvent the iconic shave ice with natural fl avorings
made from island- sourced ingredients, like lychee. The shop
will also feature other locally made specialties, such as taro chips,
and nostalgic items like “crack seed,” a traditional preserved fruit.
Once they demonstrate the store’s success, Chang and his uncle
hope to open more Uncle Clay’s in other communities, spreading
what Chang calls “the spirit of pure aloha.”
To help open the new store, they turned to ProFounder. In
September 2010, they raised $54,000 from 19 friends and family
investors, offering two percent of the store’s revenues over four
years in a fi rst- tier fi nancing round. They followed that up with
a public fundraising effort, complete with a Facebook campaign
and a splashy web site, where their simple 64-page investment agreement
could be downloaded. In six weeks, the pair raised another
$7,500 in loans from 49 individuals—albeit less than they were
initially seeking—to be paid back over three years. (The 1 percent
of revenue that will be shared gets donated to charity.)