Need help finding a loan?
- Date Established
- Boulder, CO
- Good for retailers
- Good for popular brands
- Low fees
- No paid subscription required
- Somewhat niche appeal
- Investors bear risk
- Skimpy help materials
Launched in 2015 by Sean De Clercq, Kickfurther takes a unique approach to crowdfunding. It’s a platform for businesses that want to raise money to purchase inventory. With Kickfurther, instead of raising money from backers in return for gifts or equity, you, the retailer, give people the chance to buy inventory on consignment. You then offer a specified rate of return and a timeframe in which you expect to sell your inventory and pay back your supporters with dividends.
I’ll use a real-life example to explain further how it works. The Vaportini is an alcohol vaporizer that lets you deliver alcohol right into your bloodstream, bypassing all those silly mediating organs that never did anyone any good anyway. With its Kickfurther campaign, the company solicited funds from The Crowd for 12 months, offering a 16% profit margin and a stipulation that 88% of the inventory must be sold before those who helped fund the inventory purchase could earn back their principal and payout.
One aspect of this unique crowdfunding arrangement is that all backers get their own Kickfurther store in which they can sell the product inventory they just helped to finance. Every backer of the Vaportini got the chance to sell Vaportinis via their Kickfurther store and make a profit from each unit sold.
It’s a distinctive arrangement, to be sure, and one that makes sense if your company produces goods to sell, it requires money to finance an inventory order, and it has a brand that commands enough visibility and loyalty to inspire customers to become a part of the sales process.
In actual fact, this arrangement was initially found to be lacking — too many of these consignment ventures were failing, leaving backers high and dry. As a result, in 2017, Kickfurther introduced its Pay As You Go financing system. Through the program, companies can raise funds as a percentage of their total income over the previous 12 months and sell through multiple sales channels. In general, customer feedback so far confirms that companies employing this system have been quite successful in their campaigns. Stricter vetting measures have also been implemented to make investing through Kickfurther a safer prospect.
Let’s delve further into Kickfurther’s unique brand of consignment crowdfunding.
Table of Contents
Kickfurther gives small businesses the ability to crowdfund inventory purchases. According to its website:
Have a strong brand but not enough cash to pay for your next order? Kickfurther helps you grow with inventory fundraising from your supporters and fans. When you sell your inventory successfully, you pay your buyers, not the bank.
Unlike some crowdfunding platforms, Kickfurther has a screening process to weed out companies that aren’t a good fit for the platform. The vetting process includes:
- Sales history and reporting, including revenue documentation
- A credit report
- Personal credit check for the business owner
- Verifying the business’s legal name with the Secretary of State in the state the business is located
- Verifying the soundness of the business’s supply chain
- An internet search for negative/criminal news associated with the business
- A BBB lookup of the business to check for complaints
- Any pertinent purchase orders or any other information listed in the Credibility Metrics on the business’s Co-Op
Businesses using Kickfurther are also required to “adhere to different protections for our community depending on the dynamics of their supply chain.” They must also communicate with their backers at each stage of fulfilling a purchase order. Additionally, a business must have at least one successful production/sales run under its belt, and its inventory must have a shelf life of at least one year.
Launching a Kickfurther campaign isn’t something an entrepreneur can do on a whim. It’s a narrow-casted service targeting a very particular slice of the market. Lots of preparation is required to use this platform.
Terms & Fees
Kickfurther’s crowdfunding campaigns are fundamentally different from Kickstarter and Indiegogo campaigns, so it’s hard to make a direct comparison. A Kickfurther crowdfunding campaign can last as long as the company desires. Once over, the company must specify a time frame for producing the goods, offer a specified rate of return, and layout a schedule of payout dates on which the company must report on inventory levels and pay its backers (or “buyers”) for the products sold during the period covered by the payout date.
The only point in the process where Kickfurther takes any fees out is during the sale of the consigned goods when a 1.5% service fee is assessed.
As I said, companies get extensively vetted before being allowed to use Kickfurther’s platform; they must have a demonstrated record of success and a product with a shelf life of at least one year. And although I warned against making direct comparisons between Kickfurther and other crowdfunding platforms, I’ll break my own rule to note that with competitors such as Indiegogo and Patreon, there is no process to endure whatsoever — just set up your campaign and launch it.
On the other hand, once a company has its campaign up and running, the nature of the platform means that running a Kickfurther campaign requires much less of a business’s time than running a crowdfunding campaign on one of the big-name crowdfunding sites.
Sales & Advertising Transparency
Customer Service & Technical Support
As far as direct support goes, Kickfurther is reachable by email and through its various social media channels.
Most companies raising money on Kickfurther describe the company as being very helpful and attentive to their needs.
Negative Reviews & Complaints
User reviews of Kickfurther reveal a number of investors who were burned by companies using the platform, with many investing in campaigns that ultimately faltered, paying out a negative ROI. However, many of these investor complaints arose from the time before Kickfurther enhanced its vetting procedures and refined its offerings.
- Tax Inefficient: Kickfurther profits are taxable as ordinary income, not capital gains.
- Risky: Some backers may end up with a negative ROI. There are numerous complaints that Kickfurther removed its “canceled co-ops” page, which critics claim gave a more balanced view of the risks.
- Questionable Due Diligence: While the screening process no doubt mitigates some of the risks, a lot of users weren’t entirely convinced.
Kickfurther currently has a TrustScore of 4.4 out of 5 on Trustpilot and an A+ rating with the BBB.
Positive Reviews & Testimonials
There are also plenty of satisfied Kickfurther customers. Here’s what they liked:
- Communication: Kickfurther’s communication with campaigners is frequently praised as being top-notch.
- Low Fees: Kickfurther won’t grab too much of your fundraising haul.
- No Subscription Needed: You can use Kickfurther as you need it.
For the business that finds itself in the platform’s sweet spot — popular brands that need $$$ to fund an inventory order — Kickfurther is an interesting value proposition. It’s not the most straightforward way to raise money, and it’s a platform that had teething problems as it established itself, but it has seen lots of retailers achieving funding success as of late.
That’s not to say that there’s no risk involved, however. Find yourself unable to compensate your buyers properly, and what remains of your inventory will be taken by Kickfurther, which may then liquidate it at discounted prices. We’re not playing touch football here. That said, the increasing success rate for retailers on the platform has led me to keep Kickfurther’s rating at 4-stars. Its conception of crowdfunding may be difficult to explain succinctly, but it has begun to bear fruit.