Treefort Music Fest Turns To Investors To Weather The Coronavirus
The coronavirus pandemic has been a gut punch to many businesses including Boise’s homegrown Treefort Music Fest. Beginning Friday, the company is selling shares of itself to make up the difference.
Shares are valued at $21, with a $100 minimum buy through the website, Wefunder. The cash will be used to help buoy the festival after Treefort had to postpone the event until September 2021.
In the short-term, Treefort hopes to raise at least $50,000 through the sale to help with cash flow issues. According to sale documents, the company needs a little more than $1 million to completely cover the losses it took from pushing back the festival, including paying its staff.
Last year, Treefort brought in nearly $1.9 million in revenue, earning a $13,000 profit. It says it’s grown 17% year over year.
Founded in 2012, the multi-day music and arts extravaganza has historically taken over dozens of venues in downtown Boise each March, featuring more than 400 bands the last several years.
It also boasts other side projects dedicated to storytelling, technology and comedy, among others.
While buyers would technically own part of the company, one of Treefort’s founders, Drew Lorona, likened it to football fans owning shares of the Green Bay Packers.
“It’s more of a keepsake and a commitment to the passion for the team than it is some vehicle for growing your personal wealth,” Lorona said.
He said issuing stock dividends could be something Treefort does eventually, but that the company’s priority has always been to reinvest in the festival first.
“In order to accomplish those goals, issuing dividends every year is kind of counterintuitive to trying to grow the festival,” Lorona said.
Selling your shares would also be tough; there’s a one-year freeze on cashing out. But more problematic for those hoping to earn a quick buck in the short-term is a lack of any secondary market in which to sell those shares.
Allowing such small investments in startup companies only became legal in the U.S. in 2016. Wefunder CEO and Cofounder Nicholas Tommarello wrote in an email that since it’s such a new market, it’ll likely take “several more years before there are enough buyers and sellers to match demand.”
The crowdfunding sale comes shortly after Treefort founded a nonprofit group that has given grants to artists affected by the pandemic. Money from the stock sale will go solely to the company’s for-profit LLC.
Lorona said the foundation could also be used in the future to help with the cash crunch by propping up parts of the festival that don’t charge admission.
Follow James Dawson on Twitter @RadioDawson for more local news.
Copyright 2020 Boise State Public Radio
Member support is what makes local COVID-19 reporting possible. Support this coverage here.