Anyone can cash in on internet crowds
PUBLISHED : 04 Jun 2012 13:03:00 | Caitlin FitzsimmonsMelbourne’s Kylie Gusset holds the Australian record for the most funds raised by an individual using crowd sourcingafter she corraled $38,893 to buy a tonne of premium wool directly from a farmer in Tasmania.
On the same day Facebook floated on the Nasdaq stock exchange valued at $US104 billion, another technologystart-up smashed a record for a very different funding model.Pebble Technology, based in Palo Alto, California, raised $US10.27 million via crowd-funding website Kickstarter for itsPebble watch, which works with iPhones or Android phones.Crowd-funding websites allow entrepreneurs to get their ideas in front of a large audience and may enable them toraise small amounts of money from some of those individuals.In the case of Pebble Technology, it was able to go one step further, the 68,929 individuals who backed the projectactually bought a watch turning them into customers instead of just investors.The $10 million is the biggest amount raised so far by crowd-funding websites such as Kickstarter, Pozible, IndieGoGoand StartSomeGood.Australian-based Pozible is picking up more business and, while the US is ahead of the curve, Australia is set for an“explosion” in crowd-funding, a co-founder of the website, Rick Chen, says.So far the record on Pozible is held by news website New Matilda, which raised $175,838 for the relaunch of itswebsite, while Melbourne-based Kylie Gusset holds the record for the most funds raised by an individual.Gusset, a sole trader specialising in hand-dyed yarns and fibres, raised $38,893 last year to buy a tonne of premiumwool directly from a farmer in Tasmania and organise small-scale, local processing.A tonne of wool was the smallest amount the processors would accept and she needed at least $33,000 to cover hercosts.“There is very little yarn that is being processed in Australia,” Gusset says. “I wanted to educate end users, which isprimarily the hand knitting market, and encourage the production of slow textiles in the same way that we’ve seen slowfood happen in Australia.“As a result of the project, I’m now with the School of Social Entrepreneurs in order to build a viable business.”The founder of Perth-based Littlesweet Baking, Megan Henry, who raised $12,150 on Pozible at the start of this year,describes the project as a “great experience”.The money is to pay for the design of new packaging and a corporate identity so that Henry can realise her dream ofcreating products such as premium cake mixes to sell in retail stores.“There were so many more benefits to me other than just raising the capital,” Henry says. “It took on a life of its ownwith people sharing the project with me. Also, new customers found me through the project. I’ve had a 200 per centsales increase since then and I went from being reasonably busy baking for markets to running a full-time business andemploying a part-time worker.”Henry set a Pozible record for the fastest successful project by blasting past her initial fundraising target of $5000 in just nine hours. By the end of 30 days she had raised more than double that.Henry credits her success to the fact that she already had a product with great word-of-mouth buzz and she wasoffering tangible rewards, in the form of boxes of brownies and vouchers.She promoted the project on her company’s Facebook page, where she had about 1200 fans at the time, mostly peoplewho had direct experience of Littlesweet Baking.
Anyone can cash in on internet crowdshttp://brw.com.au/p/sections/emerging_companies/anyone_can_cash_in...1 of 36/6/2012 1:23 PM