Are you trying to start your own business and struck upon how to arrange capital for the business, then you need to have a look at crowdfunding model. In recent days the global crowdfunding industry has an exponential growth.
What is Crowdfunding?
Crowdfunding is a way of raising initial capital that is required to start a small business or upgrading one’s business. Any individual or an organization can explain their project and seek financial help from the crowd and avoid traditional lenders such as banks.
However, the funds raised on Africa-based platforms primarily went to funding startups and small businesses ($17.7 million/R240 million), real estate crowd invested projects ($13.6 million/R184.2 million), travel crowdfunded trips ($319 434/R4.3 million), and to donate to social causes and charity projects ($307 860/R4.1 million). On average, the rate for projects funded on Africa-based platform was at 67%, with business and personal loan projects being the most successful type of project (95% success rate) followed by social cause projects (84% success rate).
Thundafund
Thundafund is South Africa’s one of the best online Crowdfunding platform for funding creative and innovative ideas. So far Thundafund has funded 265 projects with the value of R15,397,527. It has ~13315 registered users who are backing the projects.
For regular projects, Thundafund collects 7% of the total project value and 5 % from registered NGO’s which is exclusive of VAT. Depending on the payment method, 3rd party and admin transaction fees can vary from 3 to 5.5%
For projects which are not reached their targets, supports can get their money back or can support another project in the platform.
Startme
StartMe was founded in 2011 by Lourie Nel and Ben Botes. It is incentive model crowdfunding where the funders can get small incentives from the project owners after 90 days. Initially, investors need to buy the credits from Payfast or Paypal to invest in any of the projects they like. 1 credit is equal to 1 rand. Startme charges 5% as their fee if it is successful if the project is not successful they charge 9% from project owners.
Jumpstarter
Jumpstarter is emerging crowdfunding platform in South Africa. They support different categories of projects ranging from agriculture, sports, and many others. So far they have supported 17 projects with the value of R439915.00. Jumpstarter charge 3.5% of the fee to the projects that are posted on their platform.
All images are taken from respective websites as given in the source, this is only my review crowdfunding platforms in South Africa.