Crowdfunding websites have changed the way entrepreneurs are raising capital. The big names, KickStarter and Indiegogo, that use a “group effort” method to collect donations for growing companies, have turned out some big brands but also some duds.
But all crowdfunded campaigns are only as successful as the marketing you put into them, which can lead to a business putting thousands down into making a nonexistent product look good.
That’s what FundThis is trying to change.
Founded by Felix Hartmann, David Hartmann and Anthony Perera, their mission is to provide entrepreneurs with the assistance needed to prove they deserve to be funded, or “democratize capitalism.”
On Thursday, March 23rd, FundThis launched their website with seven diverse companies, including an interchangeable sandals and luxury whiskey, for a combined $5,889 pledged by 75 backers at the time of publishing.
Felix Hartmann, the CEO of FundThis and a Florida Atlantic University political science student with a background in sales and marketing, described the process as “full end-to-end coverage.”
He explained, “We lead them through the whole process and cover the bill by removing obstacles.”
Obstacles that non-business savvy entrepreneurs would face with other crowdfunding platforms being learning how to market themselves or paying someone thousands upfront to do it for them.
Although anyone can apply, only companies hand-selected to be in what they are calling the “Elite Program” will get the full support that FundThis offers. These selected companies gain up to $500K and will be charged a 5 percent platform fee and 7 percent service fee. While the companies not selected will still receive support and only be charged the platform fee.
With zero upfront fees and zero equity taken, FundThis is taking the risk off of entrepreneurs and takes the leap right alongside the company. When asked what happens if these businesses do not reach their goal Hartmann replied, “If they are not successful, we lose.”
If you chose to go through Kickstarter or Indiegogo, the companies still take a percentage out of your earnings. Kickstarter takes 5 percent and Indiegogo takes 3 percent, plus 30 cents per transaction and 3 to 5 percent for PayPal.
A freelance crowdfunding consultant can cost you anywhere from $15/hour to $500/hour with upfront fees. Some even saying that they’re useless to the success of a product, so we’ll see how FundThis team compares.
FundThis’s current seven companies have 40 days to reach their goals. Seeing as no one has tried to take on the crowdfunding giants yet, we’ll just have to wait and see what these guys produce.
Featured image by Alexis Paige