Reply to Kickstarter/Crowdfunding to help finance a new business, What say ye?

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Reply to "Kickstarter/Crowdfunding to help finance a new business, What say ye?"

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[quote=Anonymous]I advise entrepreneurs. Crowdfunding for this type of business would only work if you offer a specific item in exchange for contribution, like a "free" dress for a $50 donation, etc. The complication is you can't use Kickstarter as e-commerce, so you have to be careful how you word it.

In other words, when you give an item for a donation, usually it's an item which can't be offered without the crowdfunding. Think like a titanium iPhone case where they need 30,000 orders/$3 million in order for the manufacturer to make them. Then, you're helping to get them to that goal, and in return you get the iPhone case.

But the cost to produce apparely isnt't really like that.

Also, you said you want to shun bank funding -- well guess waht, they'll be shunning you, unless you will give a personal guarantee on the loan and/or back it with assets (home equity line).

Sorry, but you're entering a business which is highly competitive, driven by price pressures, has a huge economy of scale, and with a customer that is extremely fickle.

Think of it this way - why should anyone fund you?

Here's why I would:
- You have X years in the apparel retail industry, including building a brand
- You have worked with suppliers and know cost structures
- You have a plan for your new brand, know your numbers down pat (margins, etc)

Are you all those 3? If not, it's going to be very tough.

Let's see the last few that came across my desk.. One was making handbags out of some recycled material, another was making stylish control pantyhose, and the third was some other type of bag or womens' accessories. I didn't fund them, nor did anyone I know. It's a WAY difficult industry.[/quote]

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