A good week and a closed door

Last time I wrote, I introduced you to Janet and Jaina. Since then Jaina put the first Cavara post on Instagram, and it went better than I expected.

Engagement was strong. The comments were the better signal. Nobody asked what it was or why it exists, which tells me the thing we've been describing in private actually reads in public. We already believed people want this. It's different hearing it from strangers who have no reason to be polite about it.

Jaina is running all of it. If you want the real-time version of this project, the site photos, the small updates, the stuff that doesn't survive the trip into a newsletter, she's at @jaina_anne.

We also had our first meeting with LaunchBoom.

If you haven't run into them, they spent a decade building pre-launch campaigns for product companies on Kickstarter and Indiegogo, and a few years back they started pointing the same playbook at lodging. Boutique hotels, glamping, eco retreats, unique stays. Thirty-some campaigns now, and more than $14 million in stays booked before those properties ever opened their doors.

The mechanic is simple. You build the audience early, you let people put down a small refundable deposit to hold a spot, and then you find out whether they actually want it. An email address is a maybe. A deposit is an answer.

That's the part I care about, and it has almost nothing to do with revenue. We've been saying for a year that people want this. This is how we make them prove it, before a single yard of concrete gets poured, and it turns the audience into part of the build instead of the target at the end of it. Same reason this newsletter exists.

Now the part I'd rather not write.

Financing is still a marathon. Lenders right now would rather lend against an operating business than a ground-up build, for a stack of macro and micro reasons that all arrive at the same answer. That hasn't changed.

What did change is the SBA. They've rewritten the rules on the 7(a) program, and the version taking effect this fall creates a conflict we can't structure our way around. The short version: when outside capital helps satisfy the equity requirement, that capital can't take distributions until the loan is paid off in full. On a build like ours, that's years of waiting for a first dollar. Nobody should sign up for that, and I wouldn't ask them to.

The 7(a) was the primary path. It's gone, more or less overnight. I've now read more of the SBA's standard operating procedure than any person who doesn't work there should have to, which is time I'm not getting back.

That closes a loan product. It doesn't close the project, and the difference between those two things is the whole job.

So we're on to USDA. We've had a few good conversations with a broker about their Business and Industry program, which exists for the specific purpose of moving capital into rural communities. Powell County qualifies. It's built for exactly the kind of project the conventional market keeps declining, and the program's terms this year moved in our favor for loans in our range. Early days, but I like where it's pointed.

None of this changes what we're building or who's building it. The land is right, the design is right, and the people around this thing are the best part of it. Financing is the last unsolved piece. I'd rather be stuck there than anywhere else.

One more thing. We had a call with O2 this week and the renderings are coming into focus. Not finished, but far enough along that you're looking at a building instead of an idea. Those go out soon.

More soon,

Jeremy