It has been quiet a while that I’m researching all kind of unusual and sometimes bizarre business ideas on the web. And I’ve found out that there are many people out there who have great, potentially successful business ideas which can’t be realized due to the lack of finances. In this post I’ll present you the idea of an online business that can help such people to find money for their startups as well as enrich its owner.
In early 2005 Louis Helm and John Pratt launched Fundable.org, a for-profit website that lets anyone raise money for anything: to make a movie, organize a concert, start a company or make a trip of their dream. Users can solicit donations from friends, family, or strangers while offering donors a credit in the film, a copy of the album, or tickets to the event they helped finance. Similar to online auctions, Fundable’s pages are created by people who use this site. Each project has a description of how much money needs to be collected and what it will do. Once enough pledges (not payments) have been collected, Fundable turns them into real payments and sends the total to the project’s organizer.
No one takes a risk when making a pledge: if a collection expires before reaching its total in pledges, Fundable deletes all pledges and never charges money. This lets you participate in a group purchase or fundraiser without worrying about what other people will do. No one pays until and unless everyone else makes a pledge.
So far, a Miss Sun Fun USA winner used Fundable to raise $800 for a pageant gown, friends collected $1,200 for a Cayman Islands dive trip, and some open-source programmers fetched $2,300 to upgrade their e-mail management application. In the biggest Fundable campaign to date, residents of a Katrina-ravaged New Orleans neighborhood raised $9,260 to buy a newspaper ad demanding better flood protection. “I knew from experience that there was a need for something like Fundable,” says Helm, 24, “but I never predicted the diversity of need.”
In fact, Fundable seems like the natural consequence of two important trends: the popularity of social-networking sites and the growth of online fund-raising, which generated roughly $3 billion for nonprofits in 2004, according to consulting firm Kintera.
Preventing scams could be a challenge, to be sure. But Helm notes that most campaigns involve donors and organizers who know each other, and donors can always take steps to verify that organizers are legit.
You wonder how these guys earn on their online business? Well, starting a collection or making a pledge is free, but… Completed collections have a 7% fee taken from their totals. So, if you were searching for your own, personal small business that doesn’t need a lot of startup investments – this one is for you! But if you decide to use some other ideas and to raise capital to start them, now you know where to turn.
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