Have you ever contributed to a Kickstarter campaign? For those not familiar with Kickstarter, it is a crowd-funding source for new business ideas or products. Entrepreneurs pitch their products at Kickstarter and through social media, hoping to garner enough funding to begin production or carry out a plan. For example, a family friend who played in a band was diagnosed with a brain tumor and, in the days before his surgery. recorded some of his music. Unfortunately, he did not survive the surgery. His band wanted to record an album that included his music and to produce cds with that music so his family and the band promoted a Kickstarter campaign to fund the production costs. Those of us who invested received a copy of the cd and other band swag, depending on the amount of our investment. Since the cd and swag were our only expected return on investment, I'd say this was as much a gift as an investment, but if you peruse the Kickstarter site, you'll see that investors can end up with gifts worth as much as their investment, if not more. Nevertheless, I'd consider money used at Kickstarter to be fun money, not really an investment.
If I'm talking about Kickstarter, why is the post titled "Kickfurther.com"? Because Kickfurther is another site, and it takes these new businesses a little further than Kickstarter does.
Isn't that a cute swimsuit? I wish I could wear it. The manufacturer, AMARA, is relatively new and needs capital to produce a line while also spending money on advertising and marketing. They want to borrow $6839.00 for six months, and will return $1.10 per dollar invested. Sounds like a great payoff, but I realize that with that kind of reward goes risk. I invested, but only $50.00. If I lose, I won't lose much. While my percentage of return is high, the actual dollar value, due to my low investment, isn't very substantial. Unless enough people invest to fund the entire loan, the transaction is cancelled. Kickfurther gets a security interest in the inventory so they can liquidate it if the manufacturer fails to sell it. Once half the inventory is sold, the lenders get their money. Of course if they can't sell the inventory and don't get enough for it to pay back the loan, I lose money. Another downside is that there is a 1.5% withdrawal fee when I get ready to take my money home--but they do let me continue to reinvest without paying the fee.
So, is Kickfurther a toy, or is a serious investing opportunity? Right now, for me, it is a toy. If there were a hundred choices, investing a little in each would be an attractive investmeny to me, but right now, they have only three companies looking for money, thirty-one with outstanding loans and six have been completely repaid their loans. While there are protections in place for investors, the reality is that it won't take many bad loans to wipe out my profit, or even my investment. The platform is trying to grow and I plan to keep it on my radar as a place to invest fun money, but until it is larger or has more of a track record, I do not consider it part of my serious investments.
What are some other business to whom I've lent money through Kickfurther? North Coast Organics makes natural deodorants. The money I lent them was charged to my credit card in April and they are supposed to pay back $1.08 per dollar lent by the end of August.
Below is a Humanoid Wake Boot. Assuming they sell 43 of the 100 pairs I helped buy, I'll get $1.08 in August for every $1.00 I lent them in April.
My husband hates to wear a tie, but some folks love them Skinny Ties makes these, and they have slightly (or not so slightly) suggestive names. If they sell 60% of what I helped them buy, then I get $1.20 for every $1.00 invested. They got my money in May and plan to pay it back by November.
If Clarisea sells 38% of their supply of this cleanser, I get $1.08 per dollar invested. They got my money in June and plan to pay it back in September.
Aren't these pretty? You can buy them at Marlie Madison which is a Texas boutique which is on its third Kickfurther campaign. They borrowed to open a new store and plan to re-pay $1.11 for every dollar borrowed, and to do so over several payments. The charge hit my credit card in April and I just received my first payment of a little more than $0.16/$1.00.
Besides lending money to the businesses, Kickfurther gives you to opportunity to make money by selling products financed through the platform, whether you invested in them or not. Here is my store. Feel free to buy from it so I can get a 5% commission. Those tweezers look nice.