By Brook Sutton
As entrepreneurs know all too well, even a potentially world-changing idea isn’t enough to succeed. It requires money to build a business, and trying to secure that money can be a full-time job in itself.
Jonathan Ballesteros, CEO and founder of Geyser Systems, understands the time, effort and occasional heartache of funding his growing business.
Geyser Systems is a purpose-driven company that manufactures water-efficient, portable shower and cleaning systems. In an envy-inducing achievement for any outdoor-oriented brand, Geyser Systems’ went to market, in 2020, at 167 REI locations across the country. With orders from etrailer.com, Bass Pro Shops, Camping World, and a host of other independent retailers, Geyser Systems is on a heck of a roll.
The company’s funding journey has been called a Cinderella story by consultants and observers. While it’s ultimately a success story, it hasn’t come easily. The wins have been earned through Ballesteros’ perseverance and prioritization, as well as outside guidance. The setbacks shine a light on aspects of the funding ecosystem Ballesteros and many others consider broken.
Through wins and challenges, Ballesteros has pushed forward with uncommon organization and big moves–including relocating his company from Austin, Texas, to Montrose, Colo. Over five years, he has secured private investment, small business grants, and local, regional and state level business tax incentives.
The lessons he’s learned can help every fellow entrepreneur navigate the process with greater success.
Kickstarter: Proof of Concept and Business Viability
To get the ball rolling, Ballesteros launched a Kickstarter campaign that capped the number of backers. “While thousands of backers and explosive growth would have been flashy, we weren’t set up to handle that type of production yet. It was more important to us that we were capable of delivering on our promise.”
While the campaign achieved its financial goals, it was not without difficulties. Luckily, backers were patient as orders took longer than expected to fulfill, and Ballesteros doubled down on his commitment to customer satisfaction.
Funding Tip: Kickstarter
Ballesteros says that Kickstarter can be a good starting ground to show your business is capable, but go in with eyes wide open. Today, backers expect the full package: a good idea, a clear path to production, and an ironclad plan for fulfilling the promise of the campaign. Brands need a marketing campaign to drive support before a Kickstarter campaign launches.
Accelerator Program Opens Door to Rural Colorado
Thanks in part to the successful Kickstarter campaign, Geyser Systems was invited in 2020 to participate in the Moosejaw Outdoor Business Accelerator program, based in Gunnison, Colo. Through this program, not only did Ballesteros meet independent investors, he also learned about the substantial funding options in rural Colorado communities.
Ballesteros mapped out a spreadsheet with pros and cons, and available tax incentives, grants, and loans in different Colorado towns. He landed on Montrose for its low cost of living and attractive tax incentives.
Funding Tip: A Resource to Explore the Rural Colorado Funding Ecosystem
Rural Colorado has a rich (no pun intended) ecosystem of funding options for small businesses. Check out the Startup Colorado Ecosystem Map to get started.
Rural Jump-Start and Local Incentives Make Geyser Systems “Made in Colorado”
Moving to Montrose allowed Geyser Systems to capitalize on Colorado’s Rural Jump-Start Program, which is designed to encourage small business growth and rural job creation.
“We wouldn’t be where we are today without Colorado’s investment in us.”
Jonathan Ballesteros, founder and CEO of Geyser Systems
The Rural Jump-Start Program incentivizes businesses through tax incentives, business operation grants, and new hire grants. While the program is under the purview of the Colorado Office of Economic Development and International Trade (OEDIT), it’s ultimately a collaboration between the state, local governments, higher education, and regional economic development organizations.
“The OEDIT team has been an outstanding group to work with,” said Ballesteros. “The fact that there’s an entire office in the state government dedicated to supporting entrepreneurs like me proves Colorado wants smaller businesses to thrive. It makes me proud to be here.”
Ballesteros also negotiated an incentive grant directly with Montrose City Council. “This mix of local and state-wide tax incentives and grants has been absolutely essential to Geyser Systems to move forward.”
Funding Tip: Explore Colorado’s Rural Jump-Start Program
Wide-ranging benefits of the Program include potential incentives for: business income tax, sales and use taxes, personal property taxes, and state income tax for qualified new hires. Businesses can also apply matching grants up to $40,000 and up to $5,000 per qualified new hire. Read how another rural Colorado brand successfully applied for the program here.
Grants and Statewide Opportunities
The OEDIT team introduced Geyser Systems to state-wide opportunities that were not exclusive to rural communities.
Ballesteros applied for, and received, an Outdoor Recreation Industry Impact Fund (ORIIF) grant, a grant through the Colorado Outdoor Recreation Industry Office. No longer available, the grant was funded by the pandemic era American Rescue Plan Act as a tool for hiring or retaining employees.
A different state grant enabled the company to attend the Green Expo in Mexico City. This was an opportunity to make contacts toward developing an international distribution channel that’s well-aligned with Geyser Systems’ water-saving ethos.
The Hidden Costs of Pursuing Funding
We tend to celebrate funding windfalls without acknowledging the often frustrating path to earn them. Even for well-funded companies, the path is often marked by rejection, opportunity costs, and confusion.
This isn’t a cautionary tale to avoid the effort. It’s a practical warning not to mistake success for ease. Even with expert support and robust programs like Colorado offers, securing funding requires one thing every entrepreneur lacks: time.
“Thanks are definitely due to OEDIT and the Moosejaw Accelerator for the education and introductions, but the workload to apply is heavy,” said Ballesteros. “I don’t have a point person for funding. Researching, pitching, and applying falls on me, as I’m trying to run the company. It takes a lifestyle toll to make this happen.”
Most of the funding channels Ballesteros has pursued, whether successful or not, have been worth the effort. For Ballesteros, there has been one exception.
A Call to Action for Venture Capital and Angel Investor Networks
“Quite honestly, I’m confused and a little frustrated by Colorado’s angel investment community,” Ballesteros admitted. “In my experience, the communication between these investment networks and entrepreneurs isn’t working.”
Roughly 1% of US startups receive angel or VC investment, which serves as a pretty good indicator of how challenging the process is. Like many founders of a scaling startup, Ballesteros experienced unclear and shifting benchmarks for success from investors. For example, when Geyser Systems achieved a given benchmark, he felt the goalposts would then move.
“The result is that entrepreneurs like me end up burning cash and precious time we don’t have,” he added.
Part of the problem is lack of capital earmarked for rural business owners. While there are private equity funds and groups such as the Greater Colorado Venture Fund and Rockies Venture Club that improve the access to venture funding, there remains a $250M capital gap facing Rural Colorado; which has sparked conversations around the need to launch a statewide angel investor network. The goal would be to create a comprehensive network of angels and rural startups, as well as expanded access to alternative funding mechanisms.
For now, Ballesteros suggests entrepreneurs connect with angel networks in their industry. Pitching to industry-agnostic angel networks was frustrating and largely unsuccessful as he spent precious time pitching to tech investors whose expectations didn’t directly translate to the models, needs, and timeframes of manufacturing and consumer packaged goods.
The frustration doesn’t come from a sense of entitlement and it is not unique to Ballesteros. In fact, this experience is shared by entrepreneurs and investors across the state and, quite possibly, the country. Investors have the right to make decisions on whatever criteria they value, bringing a different lens to the investment than the entrepreneur.
Full Circle to a New(er) Type of Crowdfunding: WeFunder
In winter/spring 2024, Geyser Systems is running a crowdfunding campaign on the WeFunder platform. With a charter to “Fix Capitalism,” WeFunder fought for years to change investment rules to allow small-dollar investors equal access to opportunities as high-dollar investors. (Did you know that to be considered a qualified angel investor you have to have $1m in liquid capital? That means it can’t be tied up in any investments like real estate. We’re talking cold, hard cash!)
“We want everyone–accredited and non-accredited investors–to have an opportunity to benefit and grow from the success of our company,” he said. Geyser Systems’ WeFunder campaign offers shares in the company with investments starting at $100.
Through the blood, sweat and tears associated with funding via other methods, the WeFunder platform provides a subtle, yet important, benefit to founders. “I’m pitching to potential customers who believe in our products, in our company, and in us,” said Ballesteros. “It’s empowering! I was really surprised by the positive mental impact of so many yes’es. Each one propels me forward.”
Funding Tip: WeFunder
Ballesteros says a company should have achieved at least 25% of its funding goals before bringing it public on WeFunder. While it’s an empowering platform, it’s not a one-stop shop for fundraising.
Final Thought: Be True to Who You Are
Authenticity matters. Ballesteros notes that people sense if there’s an inconsistency between a person doing a formal pitch and when they’re having a normal conversation.
“I’ve learned that people want to invest in order to be a part of your story and your entrepreneurial journey. Investors are really looking at you as a person, not as a C.V. They want to see how you evolve and how you get through challenges.”
We couldn’t agree more. And on top of that, investors are looking at the team. They want to see a founder who is committed and a team that embodies the vision and knows what it takes to succeed. While securing funding is largely about the entrepreneur, Ballesteros reminds fellow entrepreneurs they are not running their business alone.
“Don’t neglect the other people that your business can’t work without.. your team. Ask yourself why they choose to continue working with you when there’s a good chance they have better opportunities. For Geyser Systems, I believe it’s because we share a set of values that make us feel cohesive and like this a great place to be.”
New Product Alert!
Take a look at Geyser Systems’ newest launch, the EcoShower, for in-home use. After an easy install, the EcoShower helps you save up to 15 gallons of water (!!) per shower. Available with aromatherapy options, it’s a low-flow solution that promises a satisfying bathing experience that’s good for the environment and your checking account.
