Featured Startup Pitch: Kickfurther – Crowdfunding inventory
Imagine a crowdfunding platform where users can purchase inventory for businesses and earn a piece of their success when that inventory sells. This is Kickfurther.
Let’s review the current status of crowdfunding. When a product-focused company successfully completes a crowdfunding campaign, they don’t automatically become a superstar company. They may have a great product, a strong fan base, and cash in the bank but still struggle to achieve the success all entrepreneurs are seeking. Why is that?
That money in the bank needs to be used for production, and after they have shipped the products to their backers, that pile of cash has mostly disappeared. Nobody starts a business to do one production run, but what is the best option for these small, growing companies to secure the capital needed for the next one?
This is where Kickfurther comes in.
On Kickfurther any business can crowdfund inventory from their existing customer base. But it gets better; Kickfurther makes these offers available to anyone. And we mean anyone, including non-accredited investors. Right now, many non-accredited investors just have their money sitting in savings accounts, earning disappointing returns. Kickfurther is a marketplace where they can make their money work for them, while supporting growing businesses they believe in.
Consider how it worked for one of our current businesses:
Ashley Sosa has been running her boutique clothing store, Marlie Madison, for more than two years out of Dallas, Texas. She has experienced rapid growth year-after-year and is now ready to add new brick-and-mortar locations, but she doesn’t have the cash on hand to fund the additional inventory needed. Enter Kickfurther. Ashley posted an offer on Kickfurther requesting a shipment of inventory. Users evaluated her offer alongside all the other offers on the platform, and because they liked the profit offered and trusted that the product would sell, they bought the inventory and had it shipped to her. When that inventory sold through the usual sales channels, Ashley repaid her backers with profit. In this case, profit reached eight percent in just 10 weeks.
This works because of our innovative business model in which Kickfurther users own title to the goods and can help market and sell them, earning even greater profits.
Since we launched our beta in January, we have successfully funded purchase orders for 55 companies with a value of more than $500,000. Business owners we speak to love the fact that they can leverage existing financing costs to gain a real sales and marketing advantage. We’ve begun earning revenue through a transaction fee model and are excited to report there is so much passion about the business, offers are being funded almost as quickly as they’re posted.
We don’t see any reason why we couldn’t eventually serve the entire retail market. However, our initial marketing efforts are focused on the premium consumer ecommerce market, which is worth more than $75 billion. Forbes estimates that the other side of the marketplace—the non-accredited investors—are worth more than two trillion dollars.
DIFFERENTIATORS VS. THE COMPETITION
At Kickfurther, we believe that capital investment is the quickest path to becoming wealthy. This idea is illustrated best by imagining a farmer who owns a chicken. Every week that chicken produces 10 eggs. Now if the farmer eats 10 eggs a week, he will never become wealthy. He needs to hatch an egg to get another chicken to produce more eggs.
It seems obvious, but what isn’t obvious is how difficult it is for average earners to find meaningful places to get their money to work for them. On Kickfurther, there is no cost to invest and we keep our minimums intentionally low. We are creating access to capital investment for everyone.
I (Sean De Clercq) have personal experience with the cash flow pinch many small businesses face. After growing up in the sourcing industry, I started my own merchandising business a few years ago. Things were going well, sales grew 50 percent to $1 million in the second year, but I was constantly confronted with a cash flow problem. I could earn $100,000 on a purchase order, but would get paid 30 days after delivering the goods, and my factory required 30-to-50 percent deposit to book a production slot. Taking into account production and shipping lead times, this meant I had to finance $30,000-to-$40,000 for as long as four months before getting paid.
This was significantly slowing the growth of my business, and I went looking for a solution. Banks wouldn’t talk to me, factoring and MCA services were too expensive, and the factory wouldn’t extend a line of credit.
At the same time I was enrolled in a Business Law class learning about what distinguishes securities from other investments, and my sister was completing a crowdfunding campaign. It was the confluence of these events that led me to ask: “Why isn’t anyone crowdfunding inventory?” and in answering that question, Kickfurther was born.
We’ve assembled an extraordinary team to realize our vision. Andrew Westwick, our CTO, brings years of experience interfacing directly with major ecommerce storefronts like Walmart and JC Penny, and custom built Kickfurther.com from the ground up. Erik Straub is a talented project manager and our CMO. He has developed and instituted the sales and marketing programs that have paved the way for our rapid growth. We are supported by an all-star board of advisors that includes Jack Donenfeld, a Martindale-Hubbel A/V rated lawyer; Alex Bogusky, Adweek’s creative director of the decade, from Crispin Porter + Bogusky; and finally, John Donovan, former COO of Lending Club.
There’s never been a better time to introduce a platform like Kickfurther. Slava Rubin, the CEO of Indiegogo, the very FIRST crowdfunding platform, recently said:
“The 80s were all about desktop computing, the 90s were all about online commerce, the 2000s were about social, and this decade will go down as the decade of funding… By the end of this decade, many Fortune 500 companies will be using this platform not because it’s cute or because it appeals to hipsters, but because it’s good business.”
If you would like to help small businesses and everyday investors grow their wealth, we’d like to talk to you. We are Kickfurther, the next evolution of crowdfunding.
HEADQUARTERS: Boulder, Colorado
YEAR FOUNDED: 2014