Flush mob
Crowd-funding can connect the masses to promising investments, but beware the pitfalls, writes Benjamin Robertson
Interested in building a platform for product design and distribution, Jonathan Buford turned to a novel solution: online crowd-funding. Like many start-ups worldwide he saw the potential of crowd-funding to connect with thousands of design-conscious consumers who might help back his concept (see box).
Last year Buford took HK$7.8 million in sales and is targeting HK$39 million for 2014.
A modern-day variant on the old theme of pooled investment, online crowd-funding allows hundreds of people to come together to support a fledging company, sponsor a good cause, or launch a product.
Though still in its infancy, crowd-funding has transformational potential. Promising firms can use it to raise capital without going through expensive intermediaries. Individuals can get access to private-equity investments that would otherwise be out of bounds.
"The potential to disrupt business is huge - in a positive way," said property crowd-funder Saeed Hassan. The chief executive of Crowdbaron, Hassan has created an online platform to crowd-invest in London property.
"If you cut out the institutions and middle men we can achieve much better returns than high-net-worth individuals have been able to achieve just by grouping resources together," said Frazer Fearnhead, the founder of The House Crowd, another site focused on crowd-investing in UK property.
The forum for this is simple.