With as little as $100, you can own a part of your favorite local company. Thanks to equity crowdfunding, several Baltimore-based startups are turning to user-focused funding options to help accelerate their businesses in exchange for a portion of company ownership.

Traditionally, only accredited investors with greater amassed wealth or income could invest in private companies, but the Jumpstart Our Business Startups (JOBS) Act was created in 2012 to increase investment in small businesses after the recession. Patrick Rife and Nicolas China, co-founders of Baltimore-based photo booth and marketing technology company Pixilated, are running their first equity crowdfunding round through June 27.

“It’s imperative to tap into your tribe,” China says. “Our fans shout our praises and help us spread the word, so activating your customer base is crucial. Our customers validate everything that we’re doing.”

Rather than traditional perks of sites like Kickstarter, like early access to products, an individual investor hopes to see the value of their initial investment appreciate. If the company goes public through an IPO or is acquired by a public company, individual investors can see a return. If the company folds, the entire investment is lost.

Rife and China are using Indiegogo’s platform, MicroVentures, and set Pixilated’s investment minimum at $25,000 with a $100 buy-in per investor. (Should the company not reach its minimum, investors’ dollars will be returned.) To date, the largest individual investment is $5,000 and they feel confident that shareholders will see their investment grow. “If you look at our month-over-month growth and track record, you’ll see operators who have the capacity to take dollars and make them more than they should be,” Rife says.

Erin Lord has known the Pixilated founders for years and her investment is her first in equity crowdfunding. “Any company bound for success starts with the people who lead it and the team they grow. [Pixilated’s team is] rock solid, incredibly creative, and roll-up-your-sleeves hard workers,” she says.

Pixilated isn’t the only Baltimore company turning to equity crowdfunding. Single-serve coffee company MoJoe Brewing Co. is currently hosting a round that closes on June 22—the largest investment is $5,000 to develop its patent-pending portable single-serve coffee maker. Polling and analytics app Arbit saw a $15,000 investment from one shareholder and raised $700,000. And Artichoke, a client-management service for appointment-based businesses, received a $5,000 single investment and almost $52,000 in total funds.

“The idea of democratizing access to capital markets and allowing actual subscribers to become investors was very much in line with our core belief in including customers in the process at every stage [of growth],” Artichoke founder Justin Shelby says.

Equity crowdfunding may not be right for an individual and may not be the right funding route for a company. Campaigns have to be built within the structure of the selected platform, which can mean reworking executive summaries, exposing financial records and creating additional collateral. Sharing that level of information means that competitors can also see financial statements.

“You’re putting everything about the company out there for the world to see,” MoJoe Brewing Co. co-founder Joseph Hyman says. “If you don’t strategize the dissemination of your intellectual properly, competitors could use the information or you may breach your rights to intellectual property protection.”

“The risks of equity crowdfunding are the same as angel investing,” Canty Ventures founder Jedd Canty says. (Canty has invested in Baltimore-based startups Hungry Harvest, ReThink Water and Parkofon.) “You should go into every deal thinking there is a 70-80 percent chance you will lose your entire investment.” Canty notes that equity crowdfunding investors may also pay a fee to the funding platform and for the management of the investment.

Despite the risk, Maryland investors are taking interest. To date, 26 percent of Pixilated’s investments have come from Maryland. Nine percent of its investors are Baltimore-based and MoJoe Brewing Co. has seen as much as 10 percent of its investments from Baltimore. Utilizing the platforms also allows for global exposure—Arbit saw investments from England, Dubai, and India.

A Baltimore connection did play a big part in Arbit’s success. When the co-founders of Baltimore-based investment newsletter, Early Investing, recommended the company’s equity crowdfunding to its readers, Arbit saw $200,000 in investments in one day. “Rather than having a few institutional investors, we now have 1,300 people who are supporting the growth of Arbit,” founder Alex Bullington says. Those shareholders own 14 percent of Arbit’s business.

“I think equity crowdfunding works particularly well in Baltimore because there are a lot of entrepreneurial venues like City Garage and Emerging Technology Centers and venture capital and private equity isn’t as prevalent,” Hylete founder Ron Wilson says. (Wilson is the co-founder of Baltimore-based 180s, which was acquired in 2006.) Wilson shares that Hylete’s equity crowdfunding investors spend up to four times as much on products, becoming true ambassadors of the brand.

Rife and China had hoped to see the investment rise more quickly but know that as much as 40 percent of total funds can come in the final week, according to MicroVentures. “We’re scrappy. We’re from a challenging city to build the type of product that we’ve built,” Rife says. “We’re consummate underdogs.”

On April 19, the Emerging Technology Centers (ETC) hosted a Shark Tank style event in which six startup companies pitched their ideas in hopes of receiving $100,000. Now in its sixth year, Accelerate Baltimore—a collaborative initiative of ETC and the Abell Foundation—awards startups $25,000 in seed funding to bring their innovative ideas to fruition.

“ETC was a very well known incubator and co-working space that was really at the top of its game in 2012,” said Deb Tillett, president of ETC. “We reached out to the Abell Foundation and said,  ‘We’ll do it if you come up with the funds,’ making the case that technology was trending. Sure enough, they agreed to help us.”

Last year was the first time the Abell Foundation awarded an additional $100,000 in funding because Tillett says she noticed a troubling trend. Instead of moving their businesses forward after the 13-week program, many startups spent most of their time seeking additional funding and investors.

Tillett teamed up with a Johns Hopkins University intern and pulled together an early-stage funding report, which found that money was required to run a successful tech company. With the modified program, Abell still awards six companies $25,000 each, but one special startup receives an additional $100,000. To date, the foundation has awarded nearly $925,000 in investor funding.

Not only do the winners receive funding, but they also get access to additional resources and mentors. Obtaining a spot in this intense program is no easy feat, as the ETC received 100 applications and ultimately narrows it down to six.

Tillett says the selection process begins with the company’s personalities and how they would use the funding. “It’s a lot about the team, it’s a lot about the founder, and it’s a lot about if there’s a large enough investable market,” she said. “And frankly, is $25,000 going to make a difference for you?”

This year, the companies were a distinct bunch: Barttron, a wearable tech company for pets; Gunbail, a company founded by a former inmate; Reciprocare, a startup run by a doctor who’s also a lawyer; Swaggle, an online consignment shop for men; Arbit, a company to connect celebrities with their fans; and The Wealth Factory, which developed a game to promote financial literacy.”

Each startup had just seven minutes to convince a panel of six judges that their company should be awarded the moneys from Abell.

“We want to take talented people with great ideas and make them into wonderful businesses,” said one of the judges, Abell CFO Eileen O’Rourke. “I think the ETC has done an excellent job in supporting and coaching these companies. They are a very polished group that made the decision hard.”

Ultimately, Barttron ended the night victorious with the creation of Chord—a smart collar that uses positive reinforcement to train pets. “I originally started by trying to create a better shock collar,” said Barttron president Jared Marmen. “But then my partner, Dr. Nina Cracknell, introduced me to punishment-free training.”

Cracknell, an animal behaviorist, performed a blind study comparing the effects of punishment versus reward with dog training. She found that dogs that were punished became more skittish, but dogs receiving rewards and positive reinforcements were more likely to comply.

“I can press a button and my dog will hear my voice and respond,” Marmen said. “The commands are given to the pet by vibrations in the collar and can train the pet to respond even when you’re not around.”

The adjustable Chord collar, for both dogs and cats, works in conjunction with the Chord app and contains the latest GPS and sensor technology that allows an owner to monitor and communicate with their pets.

Barttron, which had humble beginnings in Marmen’s garage, is currently in the beta-testing phase with hopes to manufacture 1,000 handmade collars by this summer and distribute to places like the Baltimore Humane Society. As a former robotics engineer, Marmen explained that it takes about 8-12 hours to make just one collar so the additional funding will help with manufacturing.

“We want to significantly improve the quality of life for pet owners and their pets,” Marmen said. “This whole experience has been unbelievable.”