Author Topic: Inventory Crowdfunding On Kickfurther  (Read 16571 times)

erikfurther

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Inventory Crowdfunding On Kickfurther
« on: November 27, 2015, 03:27:12 PM »
Hi All,

Disclaimer, I work and invest at Kickfurther.

Kickfurther has a new take on p2p where investors crowdfund inventory for businesses at cost pricing. The business sells the inventory at retail and pays the backers a profit out of the margin(usually 15-30% annualized) on what they put in. If the business cannot sell the inventory it is seized by Kickfurther and sold at discount to recoup the investment.

It's been around for a year and after funding $2 million+ of inventory the initial results are pretty impressive.

Here is a user quote: "I've invested in over 50 companies on Kickfurther. Of those I have one company that is two months late, one that is one month late, and four that have paid off at least one month early. The rest are on-time."

Recent Press: http://www.personalincome.org/interview-with-sean-de-clercq-kickfurther/
http://www.marketwatch.com/story/how-to-make-money-from-a-companys-inventory-2015-02-27

Get $10 Free to start investing ($20 minimum) by singing up through this link - https://kickfurther.com/dsw

If you want to learn more go to https://kickfurther.com/learn or our active subreddit community - https://www.reddit.com/r/getgrowing/

Best,
Erik S.
CMO at Kickfurther
Erik@kickfurther.com

Fred93

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Re: Inventory Crowdfunding On Kickfurther
« Reply #1 on: November 27, 2015, 06:08:29 PM »
I see a statement on the web site that says "22% averaged annualized return for backers". 

Do you share historical data to back that up?


Fred93

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Re: Inventory Crowdfunding On Kickfurther
« Reply #2 on: November 27, 2015, 06:30:11 PM »
Your web site gives no evidence that you have a physical existence in the United States.  There's no address.  No phone number.  Nothing. 

You are incredibly arrogant to think I'm going to send money somewhere into cyberspace when I have nothing on which to base a belief that your organization exists.

I did find an address in NJ on your privacy statement.  That could be headquarters, or could be address of your lawyer, I have no idea.  Guessing that it means you are in NJ, I searched NJ corporation records for "Kickfurther", and got nothing.  Perhaps you are registered in another state.  I dunno.  I'm not going to check all 50 of them by hand to find out.  You have to help me out here.  This information should be on your web site.

I checked the domain records for "kickfurther.com" and found that it is registered to someone in Panama.  May be a service that hides names of folks who don't want us to know who they are. 

I understand everyone's desire for privacy these days, but when you are operating a business, and asking people to trust in you and SEND YOU MONEY, you can't hide behind anonymous web sites, anonymous domain registrations, have no address or telephone, etc. 

A high school kid in China could have registered a domain name anonymously, built a web site with stock photography, etc.  How would we know?

You may be very real, but you've done nothing to show us your reality.



erikfurther

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Re: Inventory Crowdfunding On Kickfurther
« Reply #3 on: November 27, 2015, 11:19:50 PM »
Hello Fred93

I assure you we are very real and I apologize if I appeared arrogant. Our legal name is Ouiby inc. we DBA as Kickfurther since a business model pivot in our accelerator program a year ago. We highlight a number of third party press pieces on our home page in order to establish credibility. We are physically based out of the Boomtown accelerator space where we graduated from a year ago in Boulder Colorado. Their website is linked in our footer. We are very responsive by email at contact@kickfurther.com and there is a phone number for interested businesses on our "List Your Business" Page. 

Here is a recent article heavily referencing our location
http://www.inc.com/zoe-henry/startup-hot-spot-boulder-colorado.html

We won the 2015 pitch competition at the Lendit Conference.
http://blog.lendit.co/overview-of-lendit-usa-2015-day-1/

We have an active community where our users discuss their experience and communicate with us about the platform. They are not affiliated, our comments are demarcated by "flair" https://www.reddit.com/r/getgrowing

We were recently named one of Extreme Tech Challenges top 25 Semi Finalists
http://bizwest.com/kickfurther-sphero-among-local-startups-vying-to-pitch-at-consumer-electronics-show/

As to your Question about our historical data, I'll be the first to admit it's limited given we've only been in operation for 11 months, however we have done 150 deals to date. This is third party data put together by a user of our site. Keep in mind many of the ROI's listed are not annualized and the numbers do not take into account compounding benefits of monthly pay outs. http://bidfurther.com/2015/11/25/3-things-weve-learned-from-analyzing-kickfurther-data-thus-far/

I can tell you historically our investors have a 90% reinvestment rate on the platform and that 995 non-institutional users to date have funded 2.1 million dollars in inventory.

Happy to answer any other questions you may have.

Fred93

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Re: Inventory Crowdfunding On Kickfurther
« Reply #4 on: November 28, 2015, 01:21:26 AM »
Our legal name is Ouiby inc. we DBA as Kickfurther

That's fine.  DBA is very common.  However, your web site says you are Kickfurther Inc.

Perhaps that was put on your web site by some overanxious web designer, who didn't check with legal?

What state is Ouiby Inc registered in?   <Edited to add: I figured this out.  Delaware.>

With whom is the DBA filed?

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We highlight a number of third party press pieces on our home page in order to establish credibility.
Maybe that does it for somebody, but that just doesn't rise to the level of hard facts I expect.  Anybody can get some press pieces placed. 

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We are physically based out of the Boomtown accelerator space where we graduated from a year ago in Boulder Colorado. Their website is linked in our footer.

Now you're beginning to leak out a little information.  I saw the word "boomtown" in your footer, but I had no idea what that was about.  For all I knew they were an outfit that made big stereo speakers. 

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and there is a phone number for interested businesses on our "List Your Business" Page. 
An investor is unlikely to look at your "List Your Business" page, so investors won't find it.

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We have an active community where our users discuss their experience and communicate with us about the platform. They are not affiliated, our comments are demarcated by "flair" https://www.reddit.com/r/getgrowing

I found that, and it mostly confused me.

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As to your Question about our historical data, I'll be the first to admit it's limited given we've only been in operation for 11 months, however

No.  Not "limited".  It is nonexistent.  I found NO historical performance data on your web site.  Perhaps I missed it.  If so, please point me to it. 

Here's what I do see...

Where is the data to back that up?

When I see things like this -- lofty claims with NO DATA, the impression I get is that you don't know what "return" means.  I'm thinking of the possibility that what you mean is annualized-return-if-the-guy-always-pays-you-back.  Its just a guess, and my guess could be wrong.  Its not like you explained how you calculated that number or provided data to back it up.

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This is third party data put together by a user of our site. Keep in mind many of the ROI's listed are not annualized and the numbers do not take into account compounding benefits of monthly pay outs. http://bidfurther.com/2015/11/25/3-things-weve-learned-from-analyzing-kickfurther-data-thus-far/

I saw that.  His basic conclusion is that investors make NEGATIVE THREE PERCENT return.  However, he doesn't explain his methodology well, and doesn't provide the raw data, and it seems likely that he's not accounting for time in any standard way (as you say, not annualized), so I can't say that I can put much faith in his work.

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I can tell you historically our investors have a 90% reinvestment rate on the platform and that 995 non-institutional users to date have funded 2.1 million dollars in inventory.

That would only help me if I were a "crowd follower", which I am not.  I'm a data follower.

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Happy to answer any other questions you may have.

Your web site says it is ok for non-accredited investors to invest with you because the money goes to buy stuff, or something like that.  I can't find the reference right now.  Don't take this the wrong way.  I don't have an opinion about whether that's right or not, but I would like a reference to an exemption in the law which you take advantage of here, so I can read and understand it myself.  I presume you have obtained a legal opinion on this subject.

How many employees do you have?
« Last Edit: November 28, 2015, 02:12:49 AM by Fred93 »

erikfurther

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Re: Inventory Crowdfunding On Kickfurther
« Reply #5 on: November 28, 2015, 03:47:54 AM »
@Fred93

Thanks for taking the time to engage and thank you for your feedback. We are young and care deeply about creating the best platform for users. We haven't had offer performance data aggregated on the site, because we have 42 offers completed to date with 20 or so completed in the last 10 weeks. Individual offer performance is 100% transparent on the site.
Click on any of our completed offers to see a graph of actual vs. expected payouts. http://kickfurther.com/offers/complete

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When I see things like this -- lofty claims with NO DATA, the impression I get is that you don't know what "return" means.  I'm thinking of the possibility that what you mean is annualized-return-if-the-guy-always-pays-you-back.  Its just a guess, and my guess could be wrong.  Its not like you explained how you calculated that number or provided data to back it up.

Kickfurther is so young that we haven't yet had a single default or loss of principle by a user. When business owners fail to pay inventory is seized for re-sale elsewhere this has happened in 2 cases so far. There are 8 offers currently considered "troubled"  where business owners are behind on expected payouts. There is zero data currently available to assess our ability to recoup these outstanding obligations. For this reason any number we could possibly list would be subject to legitimate criticism given the lack of data.

I don't have an excel I can provide to make it simple, but if you look at the complete page above and click on a few sample offers you'll see it matches with what I'm describing.

As I said we are working with a data scientist to ensure we provide an accurate picture of our overall portfolio as well as give individual users a robust picture of their accounts.

The 22% figure is based on offer projections, so it doesn't account for defaults or late payments, but it equally does not account for early paybacks. To date it is the case however that our 42 completed offers averaged over 2.5% profit month without accounting for effects of compounding interest from reinvested payments, so far greater than the 22% figure listed.

This is the result of the fact that 47.5% of our offers complete ahead of their predicted schedule with no reduction in profit to the backer. Only 20% of offers go beyond their final expected payment date.

It's understandable that it's frustrating this isn't enough data, and it isn't visible enough, and we are working on that. I certainly wouldn't encourage anyone to bet the farm just yet, but it certainly bears investigation and with a $20 minimum to back a brand it's easy to dip your toes in.

Here are some testimonials from site users
"I've invested in over 50 companies on Kickfurther. Of those I have one company that is two months late, one that is one month late, and four that have paid off at least one month early. The rest are on-time."

"So far I have about 50 open offers, and I've avoided all of the 'troubled' offers. I keep getting regular paybacks and communication between the businesses and the backers keeps improving. I'm anxious to see how they move forward with the worst brands (Max Axe / Chesstache) but I'm cautiously optimistic about the platform as a whole. Most of the troubled offers have seemed to be from smaller companies where the business owner seemingly has no partners/investors to moderate their conduct. Lately though.... just by looking at the newer offers that keep coming up it appears that the quality of offers is really improving. We're seeing a lot more brands who are indicating that the financing is for a confirmed purchase order, and more of a transparent view into their sales volume. It really shows in how much competition there is to back an offer when the offer details check out."

"I'm also about 20 companies in at this point, with surprisingly only one truly "troubled" offer, so I've definitely had a positive return so far from what I have invested. This doesn't really seem to be too far out of the norm for those that pick their investments carefully..."

"Chiming in here with my results. I've invested in 50 offers (including a number of repeat companies) and only 3 have serious delays. My profit so far has been $500, but expected total profit is $1700 (for approx. 30% annualized return). Now, I have about $350 invested in those delayed companies, so even if they go completely bad I'm still ahead. However, I don't think all that money is lost:
Snow Lizard - iphone cases. huge manufacturing delays but they're finally arriving and will go on sale soon. I think we'll get all the money back on this one.
Chesstache - Cloth chess boards. Personal problems with the business owner, which has put me off investing in VERY small companies. However she has been getting back on track, and I think the quality of the product is really high so even if we have to repossess I think it will sell.
Marlie Madison - women's clothing. This was her 3rd offer I believe, but her clothes didn't sell well this summer. She is very communicative, which is helpful. But this is the one I'm most worried about.
A few lessons I've found:
The rate of return is not the most important thing when choosing KF offers to invest in. It's all about sales, sales, sales. Does the company reliably move significant quantities of product year after year? Do they sell in many outlets, both retail and online (bonus points if they're on amazon)? Do they have a LOT of positive, non-incentivized reviews on 3rd party sites? I'd happily take a lower rate of return in exchange for lower risk.
If I put money in an offer with a smaller company with a lower track record in sales, I only go with products that are GREAT ideas that are UNIQUE and that I can understand and can even imagine buying. There are so many offers on KF these days you should wait until you find a company you really like."

"There's no doubt that investing in Kickfurther (as in any investment) has risks. There's a reason the potential returns are so high. I've invested in about 40 loans and I've only had two companies with significant delays, and another couple with minor delays. I've also had several companies that paid back early.
The best course of action to reduce risk is to spread the money around amongst as many offers as possible to minimize the risk of one individual offer having substantial impact on your returns."
 
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How many employees do you have?
3 Advisors
3 Senior Management
1 Full time Developer
6 Sales Marketing Support Staff

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Your web site says it is ok for non-accredited investors to invest with you because the money goes to buy stuff, or something like that.  I can't find the reference right now.  Don't take this the wrong way.  I don't have an opinion about whether that's right or not, but I would like a reference to an exemption in the law which you take advantage of here, so I can read and understand it myself.  I presume you have obtained a legal opinion on this subject.

That is correct. Investments on Kickfurther are purchases and sales of inventory. Investors maintain control over the transaction through a variety of mechanisms and it has been thoroughly vetted by our legal Advisor and Securities Expert Jack Donenfeld - http://www.donenfeldlaw.com/jack-a-donenfeld.html

Thank you again for your interest and engagement, and I assure you I will follow up when we've completed our efforts to aggregate offer performance data.

Fred93

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Re: Inventory Crowdfunding On Kickfurther
« Reply #6 on: November 28, 2015, 05:50:54 AM »
Kickfurther is so young that we haven't yet had a single default or loss of principle by a user. When business owners fail to pay inventory is seized for re-sale elsewhere this has happened in 2 cases so far. There are 8 offers currently considered "troubled"  where business owners are behind on expected payouts.

The data provided by bidfurther says that of 87 offers so far that have had a payment pass, they show that 42 are late.  This seems just incredibly huge and very troubling.  We've learned thru our experience with other P2P lending that once a deal goes late there is a high probability that the payments will just stop soon. 

You say 2 seized and 8 are late.  Bidfurther says 42 are late.  These are very different numbers.  How is it possible that we can have this level of disagreement?  Are we not all using the same vocabulary?

You web site is heavily graphical, and all the data on these deals is hidden behind a zillion mouse clicks.  It would take me hours to gather the offer performance data manually from you site.  The serious P2P sites make this sort of data available as a csv file or api so that we can all access the information without a zillion mouse clicks. 


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The 22% figure is based on offer projections, so it doesn't account for defaults or late payments,

then I believe you should not call it "return".   To do so is misleading.

Thru sloppy use of language it is easy to materially misrepresent your product. 

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but it equally does not account for early paybacks. ... 47.5% of our offers complete ahead of their predicted schedule.

This is a big deal.  In your system, early payments have a huge effect.  This definitely improves investor performance, but the effect could be easily swamped by defaults.  In other words, I would not agree with your use of the word "equally".


erikfurther

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Re: Inventory Crowdfunding On Kickfurther
« Reply #7 on: November 28, 2015, 10:40:19 AM »
@Fred93 Good points I hope I can clarify a bit

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The data provided by bidfurther says that of 87 offers so far that have had a payment pass, they show that 42 are late.  This seems just incredibly huge and very troubling.  We've learned thru our experience with other P2P lending that once a deal goes late there is a high probability that the payments will just stop soon. 

You say 2 seized and 8 are late.  Bidfurther says 42 are late.  These are very different numbers.  How is it possible that we can have this level of disagreement?  Are we not all using the same vocabulary?

Different Vocabulary and describing a different set of offers

Kickfurther offers are contractually tied to a revenue share of sales of the inventory funded. For this reason there is variability in the required payout based on actual sales. Kickfurther projects an "estimated" timeline assuming sales are evenly distributed across all the months the business projects the deal will require, but we know that for many businesses this is not the case.

My Statistics on lateness refer to offers that have passed their "Completion date", so they either did complete or were expected to complete. Bidfurther's figure is taking into account any offer for which a single payback has been owed. Historically Kickfurther offers finish stronger than they start, with first payouts often under performing due to manufacturing/production delays and sometimes just logistical issues connecting payment methods.

Also when I spoke I specifically referred to Troubled Offers, which is different from how Bidfurther assesses "lateness". This again relates to the question of "expected vs. actual" payouts.

Kickfurther considers an offer "Troubled" if any of the following occurs:
1.) A monthly payout is completely skipped regardless of explanation
2.) The total amount paid back to date is less than 50% of expected payout to date
3.) The offer passes it's final completion date without complete payout.

Bidfurther would consider an offer that has paid back $4950 out of $5000 dollars expected as "late" despite the fact that they are making timely payouts in line with their contractual obligations and are on track to close their offer within their projected timeline.

Also a separate note* On Kickfurther if a business owner stops payments the arrangement is still secured by the backers ownership of the inventory.

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You web site is heavily graphical, and all the data on these deals is hidden behind a zillion mouse clicks.  It would take me hours to gather the offer performance data manually from you site.  The serious P2P sites make this sort of data available as a csv file or api so that we can all access the information without a zillion mouse clicks.

Guilty as charged. You are correct and we are working on making this data more transparent and accessible all the time. Please look forward to marked improvement in the near future!

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then I believe you should not call it "return".   To do so is misleading. Thru sloppy use of language it is easy to materially misrepresent your product. 

Fair enough, we felt that since our actual data was exceeding this projection that it was a fair representation. I appreciate the feedback.

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This is a big deal.  In your system, early payments have a huge effect.  This definitely improves investor performance, but the effect could be easily swamped by defaults.  In other words, I would not agree with your use of the word "equally".

Fair enough. I meant that we were applying a consistent approach to unknown factors that would both help and hurt our performance assessment, because our goal is to provide as fair and accurate a picture as possible of what we do know while acknowledging the factors we do not have a good understanding of.

Regarding defaults, as I said their are two offers for whom we've canceled the consignment contract with the business owner and have seized inventory for re-sale. We are still hopeful to recuperate principle and possibly return. To date not a single user on Kickfurther has completed an offer with a loss of principle.

I hope that I've piqued your interest in Kickfurther a bit and at least given you reason to keep an eye on us. You've given me several things to think about. We'd really appreciate knowledgeable P2P players using the platform and giving us feedback on their experience vis a vis other experiences.

Best,
Erik




 


 

rawraw

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Re: Inventory Crowdfunding On Kickfurther
« Reply #8 on: November 28, 2015, 01:19:12 PM »
Companies that agree to this scheme must not have typical bank financing available.  So I expect credit quality to be suspect and not sure if 22% rate is going to be enough for the problems that will arise.

While I get it is important to talk about collateral, I'm suspect on how much protection it actually provides.  What are you advance rates on various types of inventory?

erikfurther

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Re: Inventory Crowdfunding On Kickfurther
« Reply #9 on: November 28, 2015, 03:46:48 PM »
Hello RawRaw,

The companies who use Kickfurther cross a spectrum. Some are doing less than 100k in revenue annually and have existed for 1 year, others are doing over 5 million or have existed for over 10. All of them were operating and financing their business in some way before they acquire funds from the Kickfurther platform. Many are financing PO's for established retailers. They have access to other forms of financing whether it's personal, institutional, or from investors. Some have bank loans, revolving door working capital loans with services like paypal/Amex, MCA histories, factoring relationships, etc, but they still find Kickfurther compelling for three reasons.

1.) Having access to financing doesn't mean having the amount you need, at the time you need it, to meet obligations and take advantage of growth opportunities. This is especially true for growing companies whose financing is capped by the sales figures of previous years. Kickfurther targets companies who can meet their existing cash flow needs, but who can use the additional cash flow to invest in growth.

2.) A significant portion of our companies are unbankable due solely to how young their business is regardless of their financials and other evidence of success and credibility

3.) Companies who do not need funding at all will use Kickfurther as a marketing play. Given that they have financing cost anyway, Kickfurther allows them exposure to thousands of users with disposable income.
It allows them to engage very personally with hundreds of backers who derive a financial benefit on a monthly basis from working with their brand. They can communicate with these backers directly, offer discounts, and the backers are incentivized/prompted to share about the brands on social media when they receive paybacks. In addition any user on Kickfurther can actually stock inventory for the brands they back and originate sales to their personal network - Here is my store http://kickfurther.com/store/estraub

An offer of 5-10k of inventory at 10% in 6 months would bear a cost to the business of 695-1390. That is an extremely sustainable marketing cost to derive the sort of deep engagement that comes when backers partner with your company on Kickfurther

Here are a few other Marketing initiatives we are running currently to support our brands:
http://info.kickfurther.com/kickfurther-holiday-store
http://info.kickfurther.com/kickfurther-new-years-contests

4.) The final factor is simply experience. If you had a choice between paying your hard earned margin to a lender who takes their vig and turns their back or to a group of supportive "cheerleaders"' who celebrate your business victories and mourn your struggles which would you prefer?

As to your question of collateral and the advance rate. Users are not making an asset backed loan. You would LITERALLY be purchasing the inventory at 100% of cost pricing and simultaneously placing it with a business owner that has a history of selling at a margin on consignment. You have some idea of this margin by looking at a figure we call the "PSR".

If the business owner fails to sell within the projected timeline the users can vote to cancel the contract and Kickfurther will provide options to backers to attempt to re-sell or liquidate the inventory. This blog post by our CEO details the process in this case - http://info.kickfurther.com/our-cancellation-process-in-a-nutshell

We currently have 2 active cancellations
1.) Covers about 300 unsold wireless bluetooth headphones
2.) Approximately 9 unsold Les Gibson Brand guitars

Now I'm being totally upfront when I say this model has to be proved out, but consider this.
These items were being previously sold at 100-500% markups, if we can liquidate them at even a 30% mark up on cost there is the opportunity that cancelled offers could be even more profitable than successful ones.

What I can say for certain is that my CEO's background is in retail inventory sourcing and merchandising.
I can also tell you that our Operational advisor is John Donovan who was the original COO of Lending Club.

We are committed to providing a uniquely compelling mix of financing and marketing benefits that will attract solid companies to use the platform responsibly. We are equally committed to doing what we can to defend our community's interests when bringing on brands and when pursuing options in the event of a cancellation.

Here are a list of brands that have funded purchase order backed goods on Kickfurther
http://kickfurther.com/offer/filling-large-purchase-orders-for-the-holidays
http://kickfurther.com/offer/sodo-apparel-rei-po
http://kickfurther.com/offer/help-motion-sound-get-in-motion
http://kickfurther.com/offer/ready-set-go-holiday-2015
http://kickfurther.com/offer/titin-tech-sept2015
http://kickfurther.com/offer/mirage-pet-products-amazon-expansion

Many more are very credible and backed by a mixture of wholesale orders or a history of strong online sales and wholesale orders. I'm not trying to paint an overly rosy picture, but what you can see for certain is that as we've been able to fund larger amounts of inventory we are recruiting significantly more established brands with significant number of offers by brands that are on their second Kickfurther offer so they have a visible history of performance on our platform.
Example: http://kickfurther.com/offer/vitajuwel-and-village-rocks

You have every right to be skeptical, all I ask is that you take a look, keep an eye on progress and if curiosity takes you this link will give you $10 free and you can back a brand for as little as $20 http://kickfurther.com/dsw

If you've read this far, I'm very appreciative of your interest. We value knowledgeable feedback very highly!

Best,
Erik





In the case of our first two cancellations they involve
1.) About 300 Wireless bluetooth

erikfurther

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Re: Inventory Crowdfunding On Kickfurther
« Reply #10 on: November 28, 2015, 03:50:22 PM »
To clarify that list of Purchase order backed offers is meant to be representative and not exhaustive. There are many other offers that fit this description out of the 145 offers funded so far.

rawraw

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Re: Inventory Crowdfunding On Kickfurther
« Reply #11 on: November 28, 2015, 05:00:05 PM »
So I'm buying inventory, someone is selling that inventory that I own at a mark-up, and I share in the profit?  And if the person cannot sell that inventory, I get my product back.  So what motivates the company to sell the inventory?  Seems like I bear all the risk?  There appears to be no negative consequences to the company.

What are the minimum requirements for businesses to be listed?  I understand you are dealing with companies with bank relationships (I suspect factoring is more common than asset backed loans for these guys), but surely you still have some criteria?  Or are you letting the market decide a la Prosper 1.0?

bobeubanks

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Re: Inventory Crowdfunding On Kickfurther
« Reply #12 on: November 28, 2015, 05:00:23 PM »
Do people really pay $19 for shaving cream? Especially when they can get it direct from the company for $15?

Fred93

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Re: Inventory Crowdfunding On Kickfurther
« Reply #13 on: November 28, 2015, 09:20:37 PM »
Kickfurther offers are contractually tied to a revenue share of sales of the inventory funded. For this reason there is variability in the required payout based on actual sales. Kickfurther projects an "estimated" timeline assuming sales are evenly distributed across all the months the business projects the deal will require, but we know that for many businesses this is not the case.

My Statistics on lateness refer to offers that have passed their "Completion date", so they either did complete or were expected to complete. Bidfurther's figure is taking into account any offer for which a single payback has been owed. Historically Kickfurther offers finish stronger than they start, with first payouts often under performing due to manufacturing/production delays and sometimes just logistical issues connecting payment methods.

Whoa!  Complexity.  Is all this explained somewhere?

I'm not even sure I understand your little payback graphs.  The two solid lines I think I understand, but I'm unsure about the dotted line and the blue colored in region.

This is very unlike the P2P loans we've become familiar with.  I'll have to become more comfortable with these details before I can figure what metric makes sense to me.


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I hope that I've piqued your interest in Kickfurther a bit

Indeed.

erikfurther

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Re: Inventory Crowdfunding On Kickfurther
« Reply #14 on: November 28, 2015, 10:54:58 PM »
I will answer one by one @rawraw

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So I'm buying inventory, someone is selling that inventory that I own at a mark-up, and I share in the profit?  And if the person cannot sell that inventory, I get my product back.  So what motivates the company to sell the inventory?  Seems like I bear all the risk?  There appears to be no negative consequences to the company.

1.) @rawraw - Your assessment of the way it works is correct, but I think if you look closer you're glossing over some serious incentives at work.
- The business owner provides a lot of value to the relationship and does assume risk: They register a business, they develop, prototype, and oversee sourcing of the product. They invest significant time and energy branding the product and establishing sales channels for the product. They oversee warehousing and fulfillment of the product. They do accounting for sales of the product. They stand to gain significantly if things go well.
- I think your assessment understates the value of a digital brand. Many of these businesses have invested years of effort and hundreds of thousands of dollars in their digital brand and reputation, some less but still significant quantities. Kickfurther payback histories are public lasting records of how brand performed with regard to expectations. Beyond that the personalized, non-exploitative nature of Kickfurther arrangements have encouraged business owners to exceed expectations to meet obligations from their backers.
- User risk is distributed by the crowd. Business risk is centralized with the business and owners. This means the business owner generally has more at stake than any individual users.

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What are the minimum requirements for businesses to be listed?  I understand you are dealing with companies with bank relationships (I suspect factoring is more common than asset backed loans for these guys), but surely you still have some criteria?  Or are you letting the market decide a la Prosper 1.0?

2.) As to our "criteria". We require that the business (not just the owner) has experience sourcing and selling the product in mass production. No prototypes, no first production runs. Other than that we do "let the market decide" by including a variety of "credibility metrics", allowing direct interaction with the owner, and letting users decide. We are tightening these metrics and making moves towards steps standardizing and categorizing more. It is fair to say the past year which we have still considered our beta is "Kickfurther 1.0" . We provide high touch onboarding consulting our brands and guiding them as to what is appropriate on Kickfurther given their status.

Many of our brands were using factoring. We consider these offers desirable for users, and we believe they offer great value to backers on the platform.

Best,
Erik