PULP, card & gift shop, Looking to Raise $15,000 for Store Improvements

IMG_1380
14th and S St, NW

From an email:

We have just partnered up with Clovest, a crowdfunding company to assist us with our very first effort in crowdfunding campaign. Our goal is to raise $15,000 for store improvements and a brand spanking new website.

“Renew, Refresh, and Re-do”.

• Install new carpets on the stairs and on the mezzanine level
• Paint the entire store
• Finish and seal the concrete floors
• Install new fixtures and improve displays for products throughout the store
• Improve our storage systems
• Replace our front windows and renovate the front and rear entrances
• Improve our environment systems
• Update our web presence

For more information head over to our donation page.

Update from Clovest:

My name is Karan and I’m the Founder/CEO of Clovest, the platform on which PULP is raising the funds for their loan to improve their store and website. I just wanted to clarify how the campaign/process works and stress the following things:

1. This is a zero-interest LOAN, not a donation. All the funds you contribute are obligated to be repaid by the business (PULP) over the next three years in quarterly payments.

2. The existence of the funding campaign is NOT some sort of last resort financing for PULP. The truth is even for successful, healthy businesses, accessing financing in amounts UNDER $100K is near impossible from a bank, even those that have existing credit lines and relationships with banks — it is simply an amount too small to merit the underwriting required. That is exactly WHY we created our platform, to help businesses avoid having to use high interest credit cards for small scale financing.

3. PULP requesting your help in funding their loan stems from their desire to involve the community in the improvement of their business. We often all shop locally (as many of you have pointed out the merits of), our platform simply takes that a step further and has the community participate in the growth of a business by lending it money.

There is more detail on the project page and our website about how it works– PULP will be posting updates on the particulars of the renovation and website improvement in the coming weeks, so I’d urge you to follow the campaign if you’d like to learn more.

I’m also happy to answer any further questions that anyone may have (email me at karan AT clovest DOT com). We’re a new DC based company and its always good to hear from our local community about how we can continue to make our service better for everyone involved.

Thanks,

Karan

79 Comment

  • what? this is a thing now?

  • Getting a little tired of this trend. What happened to businesses making money to support themselves?

    • I agree. I don’t understand why a business like this is soliciting donations. I can understand crowdfunding in some cases, when the people making the donation receive something in return (like giving an independent musician $10 and then receiving a copy of their album when it’s released) but this makes no sense to me.

      • It’s a loan, not a donation. So it’s actually more like giving an independent musician $10 and then receiving $10.

        • You’re right, but it still seems weird to me. I guess maybe because, in the case of donating $10 to the musician, I’m doing it because they’re going to provide me with something I couldn’t otherwise get (an album of their songs). So it’s sort of like pre-paying for a purchase I would’ve already made. Whereas in a case like this, even though I am getting all of my money back, there’s no real incentive for me to donate in the first place.

          But again, you’re right that it’s not a donation – it’s a loan. They should probably have made that clearer in the email, though.

          • It seemed weird to me too but the more I think about it, it makes as much sense as any other investment opportunity. It’s an interest-free loan, and the return on investment is the continued and improved operation of a small-business in your city and/or neighborhood. If you don’t value that (or just this store in particular) then you’ll probably decide to invest or spend your money elsewhere.

  • So it’s a crowdfunded loan with no interest for the lender?

  • Instead of asking for money, maybe Pulp should team up with local artists or businesses (like The Standard next door) and host “special events” or socials in the store to raise money.

  • I’m confused, why is a business asking for donations?

  • Support local business, I’m donating now. Some businesses operate on such tiny margins that they have few options for growth. I for one like this trend…..for those that truly need it.

    • Doesn’t it indicate some fundamental flaw in the system if small businesses like these can’t make it on their own in an area with huge demand for retail?

      • Of course not. Capitalism has no flaws.

        (That was sarcasm.)

        • I’m not even talking about capitalism in general terms, but why retail can’t succeed in a place as densely populated and as money-flush in DC. It seems like less of a problem in similar cities.

          • Huge demand for retail = I want cute stores in my neighborhood to exist but still do most of my shopping at {insert chain store}.

            The reality is that the sales volume to rent price ratio in this city is crazy.

            I am not a fan of crowd funding like this but at least in the case of Clovest it is a loan.

          • Give me a break. There are plenty of people that would rather shop at small stores than chains.

          • Plenty of people doesn’t necessarily equal enough people to do enough sales volume to cover the astronomical rents in DC.

            Yes, there are people who want to shop locally but there are far more people who like the “idea” of being able to shop local but choose to spend their dollars at chain stores. If there were “plenty of people” as you suggest then there would be all kinds of local stores instead we have 4,000 restaurants, a few cool stores here and there, and the “how in the hell do they stay in business” shit stores.

            Baltimore has a better retail scene than DC because the “plenty of people” is enough sales volume to cover the much lower rents.

          • That’s what I was getting at. High rents are a problem, among other things. But other cities with high rents don’t have such a problem attracting small retail.

          • I don’t know what cities in particular you are referring to but I think the fact that it is easy to get to the suburbs and the lower density in DC is an issue. NYC for example has a much higher density and going to the local store down the street is the path of least resistance. In DC, one can hop in the car and be in suburbia chain land pretty easy.

            I do most of my shopping locally because I don’t have a car but I have plenty of friends in DC who do most of their shopping at Costco/Target/Home Depot/shopping mall etc…..

          • I have a car, and live pretty close to 295 and 395, but still find driving out to the suburbs to buy shit way too much of a headache. You have to fight traffic, navigate some insane parking lot, wander through some vast warehouse/mall of merchandise, stand in long checkout lines, get out of the insane parking lot (which is designed to be confusing and keep you in), fight the traffic back home, find a parking spot that’s close enough to haul the goods inside your house. It’s so incredibly draining. If I can get something locally I’ll do it in a heartbeat so I don’t have to deal with that crap.

          • Surprised so many car-owning city dwellers you know still choose to shop at Costco and Target. There’s a big quality of life incentive to buying locally. It’s much better for you, mentally and physically, to walk to a local store and grab what you need quickly than to take grueling trips to the big warehouse stores. Usually there are better products and service at the local stores too, so you end up with a better and smarter purchase. I find that I spend less buying locally simply because it’s not as easy to buy stuff I don’t need, though I realize that might be different for people with kids who actually do need more stuff.

          • I completely agree. I know I spend less money because I don’t go to Costco. I would just end up buying a whole bunch of stuff I didn’t really need.

          • And you don’t need to buy a membership to shop at Pulp.

        • figby

          I love Pulp but I just don’t need greeting cards that often.

      • There is definitely a flaw, but in this case it looks like the business has a need for improvements that will (theoretically/hopefully) make the store more inviting and boost business, eventually paying off in the long run. But there’s an up-front cost now, and the flaw is that it can be very challenging for some small businesses to access capital, especially at reasonable interest rates (part of the reason why many small business owners turn to credit cards to finance, which is not a good idea for long-term financial health of the business).

    • You support local business by buying their goods or services. And even this support comes after they have done something to earn your business. This campaign is just asking for an interest free loan.

    • This is fine if the business ALSO has a history of supporting the local community (funding school events or community groups). I’m not sure if PULP has ever done anything like this, and if they don’t mention it in their press release, it makes them just seem greedy.

    • The donation page still says $0.

  • In Judaism there is a tradition of granting interest free loans but the IRS does not recognize such loans. I forget the amount but they will attach an interest rate to gratis loans.

  • Why is Pulp calling it a donation? It’s not. They have a duty to repay. But I guess they don’t plan to.

    • Pulp isn’t. Popville did. They’re wrong. It is not a “donation.” It’s an interest-free loan.

      I have no problem with the idea of supporting local retail in this manner. Rising rents are much tougher on small retail stores than bars and restaurants.

      • Prince Of Petworth

        No PoPville did not. You see how that area is in gray? That means it is entirely quoted from the email. Carry on.

        • Hey PoP, did the email come from Pulp?

          If so, it makes me wonder if they (Pulp) understand the nature of this thing. Perhaps they (Pulp) think that this really is a donation as opposed to an interest free loan that they “should” pay back.

  • this is the equivalent of asking your dutch uncle for a loan, no?

    • This is the equivalent of a business that’s showing signs that it is ready to go under. It’s a shame and I do hope the best for them.

  • This is starting to get to be too much…

    On one hand, I want to support my local businesses. When pulp almost had to move, the community rose to the occasion to help them stay.

    On the other, this is starting to get ridiculous. Businesses exist to make money. If they operate on such “small margins,” then I doubt the owner would keep the business afloat- the owner has to pay her own bills and feed her own family, and wants to make a profit to retire someday.

    Customers support local businesses by paying more at those stores but still going there over big box stores. But providing interest free loans or giving businesses money to come to their area? I’m thinking that is starting to cross a line. Banks should provide loans- not customers.

    • If you have a problem with it don’t participate. Why whine about it?

      I happen to like to idea of a local community that values small, independent retail shops stepping up to help to keep them afloat. I like that we have so many dining options in the neighborhood but we really don’t need another bar. We DON’T have many card/gift shops like Pulp (no others that I know of, actually).

      • No others in this neighborhood, or anywhere in DC? I can think of several.

        • In the 14th & U neighborhood? Where? I’d like to know (you’re not talking about CVS, I hope).

          • No, that’s what I was asking. I don’t know this neighborhood well enough to say if there’s another card store RIGHT THERE, but there are a lot of good ones in DC in general.

      • chocolate moose has been around forever. its a fantastic store.

      • OP here: that’s just a silly comment about whining about it. This is a MESSAGE board. The point is to offer opinions. If you don’t like my opinion, don’t read the message board.

    • I’m coming around to this idea. I think it’s actually very much like what banks used to do way back when. When small businesses needed a loan, they would often go to their local community bank to get it. The bank generally had a relationship with the proprietors and both the business and the bank had a vested interest in the community. The bank was able to lend money largely because of the deposits from the locals. So essentially it was the locals lending to the small business, only with the bank as a middleman. So take away the bank and the interest earned and you have this campaign. At least you know who you’re lending to – if you stick your money in a bank account you might be lending to Wal-Mart or Monsanto instead.

      • But banks will guarantee your money (mostly).

        This part makes me nervous:

        “Lastly, repayment of your funding is conditional on the Borrower making their quarterly payments to us. As such, payment on loans made through Clovest is not guaranteed.”

        • That’s true, the risk is on you in this situation, but so too (probably) are the amounts loaned by each individual. The part you quoted basically just says that Clovest is not responsible for repaying you, the borrower is; that seems pretty straightforward to me.

          • I don’t see anything in this arrangement that puts legal responsibility on the borrower to pay back the loan.
            This situation does not remove the middleman. It puts in a different type of middleman (Clovest) and it shifts all of the risk to the lenders.
            In the good old days, banks still charged interest (to compensate for the risk). The bank could also take possession of the assets if the borrower did not repay.
            I don’t think that this is the case in the clovest scenario.

            “Do note, however, that return of your principal contribution is conditional on the business repaying their funding and is therefore not guaranteed.”

          • Anon 3:41 – Clovest’s role is negligible compared to that of a bank as far as I can tell. They don’t safeguard your money, nor do they evaluate the credit-worthiness of the borrower. They merely are a conduit for the money and a record of who loaned what. It’s effectively a direct loan from the lender to the borrower. That’s why I said no middleman; I guess I didn’t mean it literally.

            And yes, as I said, the risk is on the lenders; but the risk is also most likely pretty small since people probably won’t lend large amounts in this scenario. The theory of community-based lending also suggest that the chance of non-repayment will be lower since the whole community has something at stake.

        • PDMtP

          Wolfgang’s right. When you take your money down to George Bailey at the Building and Loan, he might loan it to Mr. Potter, but your relationship is with the Building and Loan. They owe you your deposit even if bad old Mr. Potter doesn’t pay (and they give you interest for the use of your money, and they’re insured). This is pretty different – it’s an unsecured loan to Pulp at zero interest, and the intermediary is just there to put them in touch with you.

          I try to shop locally too, but like some of the others I’m a bit put off by the “I don’t have a commercially viable business plan, so please give me money instead” approach. But hey – if people are into doing it, it’s not for me to tell them otherwise.

          • Wolfgang is right. And so are you PDMtP!

            No business plan. No announcement of this campaign on the Pulp webpage. No pledges so far…

  • I can help paint!

  • I’m not going to donate but I’ll give some free advice.
    How Pulp should prioritize their 3R’s campaign:
    -Update web presence to include e-commerce capabilities with a focus on digital advertising/SEO as appropriate. This would allow broader access to their products assuming they are willing to become a distribution operation as well by shipping their goods to buyers everywhere.
    -Amazon.com: Once they update their site with e-commerce capabilities and establish shipping protocols as part of their operation, they should consider becoming a third-party seller on Amazon.com to increase their reach.
    -Social media campaigns: Card of the day with ‘click to purchase’ links in tweets, FB posts, etc., Calendar season promotions, heck all of their products (and always with a click to purchase link!) are some thoughts. To an extent, they are doing this now but it should be a bit more polished and organized and again, CLICK TO PURCHASE.
    -Pinterest: Pulp has some cute, humorous and visually interesting stuff so including Pinterest as part of their digital marketing strategy would not be a bad idea.

    Assuming they are effective at revamping their site with these capabilities, they could raise the necessary profits to complete their interior renovations.

  • Eh. I have mixed feelings about these types of campaigns. I’d be more inclined to give an interest-free loan than a straight-up donation where all I’m getting back is something token of very little product value (like the debate on here a while back about Each Peach’s Kickstarter campaign.) There is something that feels a little weird about essentially donating to a for-profit. On the other hand, if these types of crowdfunding resources are available and business owners can convince people to lend or donate–then hey, good on them. They got their interest-free loan or donation, and that saves money down the line that could be put back into the business. Who wouldn’t want to take advantage of those types of resources?

  • Does anyone know what the tax implications are to this approach? I doubt they realize the tax-exemption you typically see with donations to non-profits. Or do they? Could this be an interest free loan as well as a tax-free donation?

  • Wait, you mean selling $7 greeting cards isn’t putting enough money in the bank for renovations?

    • Right. How about lowering your prices to boost sales? Everything there is at least a dollar overpriced.

      • And please tell us all how you are able to tell “everything” is overpriced? Do you have some magic window into their books? You know their rent, utilities, insurance, payroll, etc.? What their wholesale pricing is? Small businesses generally do not get huge wholesale discounts. Given that you have no idea what their P&L looks like, please reconsider your attitude.

        • Perhaps I should say, priced just high enough to prevent a sale. if they dropped the prices a bit, I wager sales would rise. I wish them well, but I don’t buy many things there anymore because I feel fleeced.

          • They should introduce a low-to-moderately priced line of cards. I would happily buy cards there, but it seems all the cards at Pulp are high end. That must be a management decision. Now, I buy all my cards at Copenhaver’s and Teasism because the prices there are reasonable. The sales could be Pulp’s though!

  • jim_ed

    Did I miss the part where Pulp opened up their books to show that they cannot afford to take out a traditional loan for store upgrades? Or conversely if they’re a healthy enough business that if I donate money, they’ll still be around in 12 months to repay it? If not, you’re nuts to give anything more than pocket change.

    • My thoughts exactly.

      Recent events in my life have taught me to never trust people/businesses to do what they say with earmarked money.

      If they have to go outside the normal channels for this type of stuff it is probably because those options have been exhausted and the money they get will go towards keeping the lights on and paying back debt.

      I don’t want to discourage anyone from contributing, but I would not count on seeing said improvements (which sound like they are well over 15k) or getting my money back. Consider it a donation to keep a business you care about in business.

      Seriously though I think the word “crowdsourcing” should be changed to “chumpvesting.”

  • A commerical enterprise wants donations?? That’s not right.
    That falls in the same category of Walkathoners who collect the money before they walk.

  • $15,000 to replace all the windows and doors AND paint, replace fixtures, and build a website? Try $50,000+.

  • Karan Jain

    Hi all,

    My name is Karan and I’m the Founder/CEO of Clovest, the platform on which PULP is raising the funds for their loan to improve their store and website. I just wanted to clarify how the campaign/process works and stress the following things:

    1. This is a zero-interest LOAN, not a donation. All the funds you contribute are obligated to be repaid by the business (PULP) over the next three years in quarterly payments.

    2. The existence of the funding campaign is NOT some sort of last resort financing for PULP. The truth is even for successful, healthy businesses, accessing financing in amounts UNDER $100K is near impossible from a bank, even those that have existing credit lines and relationships with banks — it is simply an amount too small to merit the underwriting required. That is exactly WHY we created our platform, to help businesses avoid having to use high interest credit cards for small scale financing.

    3. PULP requesting your help in funding their loan stems from their desire to involve the community in the improvement of their business. We often all shop locally (as many of you have pointed out the merits of), our platform simply takes that a step further and has the community participate in the growth of a business by lending it money.

    There is more detail on the project page and our website about how it works– PULP will be posting updates on the particulars of the renovation and website improvement in the coming weeks, so I’d urge you to follow the campaign if you’d like to learn more.

    I’m also happy to answer any further questions that anyone may have (email me at karan AT clovest DOT com). We’re a new DC based company and its always good to hear from our local community about how we can continue to make our service better for everyone involved.

    Thanks,

    Karan

    • As someone that works for a large regional bank, your comment about the difficulty for healthy and successful small businesses getting loans for under $100K is completely inaccurate! Loans of that size are fairly easy to obtain with an SBA guaranty to cover a lack of collateral. Now, if the owners of the business have had credit difficulty in the past, maybe due to the business not always being strong, there could be some hurdles to cross. I think that a blanket statement that all loans under $100K are unduly difficult and therefore this is a better route holds no water. Giving a business an interest free loan that puts all the risk on the public, as the lender, without any disclosure about the financial health of the business is just irresponsible. I think that you all need to give some kind of risk disclosure when working in this arena. It’s almost like this process is trying to prey on the public’s lack of knowledge about business lending…

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