Follow the crowd

Follow the crowd

Crowdfunding is picking up here, with new sites opening in recent months to help small companies and individuals get funding for their projects.

Among them are telco StarHub's Crowdtivate and online retailer Haystakt's Projects section, which was launched last month.

Such sites typically allow strangers to contribute funds for projects listed by a company or individual. This is done over a fixed period of time.

Many such fund-raising campaigns offer rewards to backers who fund a project. This may include a substantial discount for buying a product developed under the project.

Digital Life looks at four home-grown crowdfunding sites.

kennyc@sph.com.sg

Crowdonomic

Launch date: January 2013

Funding period: Up to 60 days

Payments: By credit card or PayPal. Payments will not be refunded to project backers even if a project's funding target is not met. But rewards for backers are still expected to be honoured.

Project owner fees: 9.5 per cent of the funds raised if the project does not meet its funding target. If a fund-raising campaign meets or exceeds its target before the deadline, the fee is lowered to 6.5 per cent.

What: Crowdonomic is a crowdfunding site focused on helping Asian small- and medium-sized enterprises seek funding for their projects.

It is run by a team of eight. The site can also advise project owners on how they can run their funding campaign, such as how a project can be marketed.

Crowdonomic and its partner websites have launched campaigns in 16 countries, with supporters from 70 countries, according to the site.

Most campaigns on Crowdonomic are from Singapore.

A recent successful campaign is one by the World Wide Fund for Nature Singapore (left). It sought to raise funds to aid wildlife rangers in their fight against the illegal wildlife trade. It raised more than US$21,300 (S$26,600), which was above its initial target of US$20,000.

Project owners are vetted for their intent, credibility and quality.

Haystakt

Launch date: Last month

Funding period: Up to two months

Payments: Payments are deducted through PayPal only if a minimum number of backers is met by target date.

Project owner fees: 5 per cent fee on all orders made through the site. Fee is not charged if minimum number of backers required for the project is not met.

What: Its Projects section is focused on helping designers gauge consumer interest in new products before they go into production.

The site will list a starting price for a product. As more people back the project, its price falls. People who back the project earlier stand to enjoy steeper discounts.

A team of four people is behind the Projects site. Since it launched last month, eight projects - from Singapore, Thailand, Indonesia and India - have been listed. Of these, four were funded successfully.

Backers will need to make payments for projects that have a minimum number of backers.

Projects that have been funded include a "skinny" wallet and a bow tie made of wood (above).

Before a project is listed, it is screened to determine its originality, and whether a physical prototype exists.

CoAssets

Launch date: July 2013

Funding period: No standard funding period

Payments: Not applicable because CoAssets does not accept payments

Project owner fees: There are no fees for listing on the site as it makes money from advertisements, helping developers to market their projects through e-mail and holding sessions for consumers to meet developers.

What: CoAssets helps property developers find people who are interested in investing in and funding real estate projects.

It helps developers find short-term financing from the public, which can help these firms save on the interest they would pay on loans.

Unlike other crowdfunding sites, CoAssets does not accept payments. This is arranged with the developers instead.

The site is managed by about 10 people. Since it launched last July, more than $20 million worth of deals have been put up, said the site's chief executive, Mr Getty Goh. Of these, $6 million have gone ahead. Projects have come from South-east Asia and Australia.

Developers who want to be listed on the site are put through a basic screening process to see if they have the proper licences.

Crowdtivate

Launch date: Next month

Funding period: Up to two months

Payments: By credit card or PayPal. Payments made will not be refunded to backers of the project even if the funding target is not met. But rewards for backers are still expected to be honoured.

Project owner fees: 4 per cent of funds raised, regardless of whether a project meets its funding target or not.

What: Crowdtivate is a crowdfunding site for projects related to the arts, books, films and technology.

Telco StarHub and crowdfunding platform operator Crowdonomic co-manage the site.

After a project or idea has been accepted, Crowdtivate mentors the fund-raising campaigns and provides business incubation support.

The top three monthly campaigns on the site can get extra help, including access to test users, marketing support, start-up funding and free software development. These campaigns are selected based on their quality and votes from the public. Backers can get rewards, such as products or services.

Industry partners help to assess and review projects before they are listed. They assess the credibility of the project owner, the practicality of its targets and its sustainability.

Some successful ideas and projects may even be incorporated into StarHub's own services. The telco plans to partner companies instead of acquiring them.

This article was published on April 23 in Digital Life, The Straits Times.

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