Need Money to Fund Your Business? Try Crowdfunding
After years of planning and hard work, a young entrepreneur in Bali finally managed to launch his vacation package platform business. He put up a nice website and got tour providers as well as individuals who enjoy tour-guiding to advertise their adventure-filled trip packages on the platform, which has since been matchmaking them with travellers with unquenchable wanderlust.
He is doing well, but getting his business off the ground was just step one. Now the big question on his mind is how he can expand. The bigger question is, where does the money come from?
Most entrepreneurs are grappling with this question all the time. One of the most straightforward answers is bank credit or loan. Unfortunately, many small businesses are not eligible for a loan from the bank. The vacation platform owner is now looking for an Angel Investor. Alas, the latter is not always easy to find. But small business owners like him now have an alternative to the conventional sources of funding.
Technology is bringing people closer to each other than ever before. Fintech companies like Mekar are using technology to do exactly this, bringing entrepreneurs and investors together in one platform so both can realize their dream –building a business for the entrepreneurs, and financial freedom for the investors.
Mekar’s peer-to-peer lending platform, Mekar.id, lets businesses find people who will fund their ventures. Owners of micro-sized businesses can benefit from Mekar’s microlending service, while those running small and medium-sized businesses can use Mekar’s new service: Crowdfunding.
Crowdfunding could be the solution to your fundraising woes
For many businesses, especially those that are deemed unbankable or in need of quick access to capital, crowdfunding could be the light at the end of the tunnel. In the olden days, the concept of crowdfunding would have been called a whip-round, or “kolekan” in Indonesian slang. Fintech startups are now offering the modern day version, whereby, using the power of internet and technology, many people invest a little amount each in a business in return for profit or other kinds of benefits.
Mekar’s crowdfunding service, launched in early November, lets businesses that are expecting to see sizeable growth in the near future and those that produce innovative products raise from Rp 500 million up to Rp 2 billion to fund production or business expansion. Keep in mind that this money has to be paid back; the businesses can offer their investors (also called funders in Mekar) a share of revenues or early access to their newest product.
In Mekar, crowdfunding is easy and practical
If you are new to the world of digital fundraising or used to seeking financing the old ways, you might think crowdfunding is difficult or impractical. Au contraire, crowdfunding takes the hassle both out of fundraising and investing at the same time. In fact, its practicality is what attracts businesses to launch their first crowdfunding campaign. In Mekar, making your own campaign is easy. All you have to do is fill in this simple Google form.
After your application is approved, Mekar will create a campaign page for your business. You can choose from two crowdfunding schemes: revenue sharing and product pre-order. In the revenue sharing scheme, you make periodic payments to the funders who support your campaign based on a percentage of your sales. In the product pre-order scheme, you reward your funders with your product in exchange for the money they have pledged to help you fund the production.
Once your campaign page is live, you can start raising money for the next 30 days. During this period, you will want to promote and share your campaign page to as many people as you can so you can reach your crowdfunding target.
If your campaign is successful and your target is met, Mekar will release the fund and you can use it to finance your production or business expansion plan. Your next responsibility is to reward your funders with the benefit you promised them in your campaign.