LOUISVILLE, Ky. (WDRB) — As the economy spiraled in March 2020, the cofounders of Louisville-based Cornbread Hemp were advised to pause fundraising for their startup. They’re glad they didn’t listen.
Cornbread Hemp, which makes cannabinoid products like gummies, oils and lotions from Kentucky-grown hemp, ended up raising nearly $400,000 in 2020 on the crowdfunding platform Wefunder, about four times more than cofounders Eric Zipperle and Jim Higdon expected.
The onset of the pandemic turned out to be a fertile time to raise money in small amounts from all over the country, as people were stuck at home and flush with government stimulus checks.
“It was a great opportunity for us to shine,” Higdon said Tuesday.
Higdon and Zipperle shared their story with an audience at Techstars Startup Week Louisville, a four-day conference aimed at boosting entrepreneurship in the Louisville region. This year’s event at the Henry Clay downtown marks the first time the annual conference has been fully in person since its inaugural year in 2019.
Austin Lopesilvero, a Startup Week organizer, said the event is about helping founders benefit from each other. About 500 people will attend, he said.
“If we can build that community and let them know, ‘Hey, you’re not alone,’ and we can make those connections, that’s the real win,” he said.
Zipperle and Higdon’s talk Tuesday was meant to call attention an advantage uniquely available to Louisville and Southern Indiana entrepreneurs: a $20,000 dollar-for-dollar match from Louisville venture fund Render Capital for Wefunder crowdfunding campaigns.
Cornbread Hemp was the first company to get the Render Capital match. Since then, nine others have followed, according to Render Capital’s website and Render Capital Managing Director Patrick Henshaw.
Read Ezell, southeast lead for Wefunder, said Louisville is the only area in the country with the $20,000 match for local startups on the platform.
Higdon and Zipperle said they scrambled to raise $20,000 from friends and family in 2020 to get ensure the Render match, and once they were able to show $40,000 raised on Wefunder, other investments flowed in. Nearly 900 people invested through the platform.
The $400,000 campaign added to the company’s initial angel investment of $100,000 in 2019 from Larry Doyle, according to public records.
Cornbread Hemp is growing. Sales are on track to reach $6 million in 2022, up from $1.9 million in 2021, Zipperle told WDRB News. It employs nine people.
The company sells the only certified organic CBD gummies in the country, Zipperle said.
Cornbread Hemp recorded small net losses in 2020 and 2021, according to publicly available financials. Zipperle said the company is running near “break even” because it is plowing money into marketing.
“Essentially, any profit we have, we immediately turn the (marketing) dial back up, because we’re just going to continue to grow,” he said.
Cornbread Hemp is looking to raise $1.5 million from traditional investors and already has $550,000 committed, according to a regulatory filing last month.
Higdon told the Startup Week audience that the business is “looking forward” to another round of small investments on Wefunder, which will be easier now that about 900 people already have a stake in the company.
“All we need to do when we’re ready is flip the switch,” he said.
The Startup Week event culminates Thursday night with Render Capital’s third-annual pitch competition, in which eight local startups will receive $100,000 investments from the fund.