FringeBacker pulls in crowds and quick funds
There was a time when one had to find an angel investor or a private equity fund to translate a great idea into a great business. Now, one can just click a mouse and rustle up millions of dollars by pitching to small-time investors on the internet.
Welcome to crowd funding, an online fundraising mode that has become enormously successful in the United States and has been brought to Hong Kong by FringeBacker.
Despite being a new concept, FringeBacker has already raised HK$560,000 for four successful projects in the eight months it has set up shop in Hong Kong. The number of inquiries has jumped fivefold to more than 100 a month since opening in September.
"I don't see why crowd funding won't be popular in Hong Kong when it has been such a success in the US. The question is whether you have the creativity and know how to market your products," said FringeBacker founding director Maryann Hwee.
Those who have approached FringeBacker range from aspiring novelists and filmmakers to an injured equestrian who sought to raise money for overseas training.
The applicants submit their proposals to Hwee for assessment. If approved, they are posted on FringeBacker's website for 60 days.
People from all over the world can contribute funds in exchange for rewards such as a role in the novel, a part in the film or even just a meal with the owner of the project - the latter works a lot better if the owner happens to be a celebrity.
If the fundraising target is achieved, the company gets a 5 per cent share of the funds raised. If not, all pledgers get their money back and the website gets nothing.
Hwee, a veteran investment consultant, acknowledged the business will not be profitable in the short run but said she had reasons to be optimistic as FringeBacker's US version, Kickstarter, drew more than 3.8 million people who pledged a total of US$568 million for more than 39,000 projects since 2009.
Crowd funding is not just for creative start-ups. An American restaurant owner, for example, raised thousands of dollars to relocate and renovate his restaurant. He was looking to build a so-called art wall in the new kitchen to inspire his chef to make new dishes.
FringeBacker will be among the 126 exhibitors showcasing their business models in a two-day entrepreneur fair starting on May 31. More than 13,000 guests attended the fair last year.