Taking the uncertainty out of crowdfunding
First Funder, a new crowdfunding platform based in Boulder, launched recently with the goal of helping donors find and fund entrepreneurship programs and community organizations while taking the uncertainty out of the process.
First Funder — http://www.firstfunder.com — is pitching itself as a safer way for donors and potential investors to contribute to organizations. The company says it is building on ideas developed by micro-lending and crowdfunding websites such as Kiva.org, but it will have closer relationships with organizations trying to raise money.
First Funder focuses on building partnerships, not individual campaigns, First Funder chief executive Jonathan Beninson said. That means organizations using the site to raise money will get a portal that focuses on the organization and its track record. Potential donors can get to know the organization, its goals and its ability to attain them, and that will establish trust, Beninson said.
"We look at all of our partners to make sure they meet at least some basic criteria. Ultimately, our site is only as strong as our partners," Beninson said.
First Funder also does not let organizations use it for "one-off campaigns." Instead it hopes to help build organizations that will continue to have an impact.
The prohibition also closes one of the ways people with dubious motives can game the system.
"No crowdfunding platform that has any deal flow can vet all their deals. It takes too much time. There are a lot of people taking advantage of that," Beninson said.
When it launched on Sept. 14, eight organizations were on First Funder, but they have yet to launch fundraising campaigns. That should change quickly.
"We have a lot of growth in the pipeline in the next one to three months," Beninson said.
Partners include the Rocky Mountain MicroFinance Institute and Young Americans Center for Financial Education.
Initially, First Funder will facilitate donations to organizations that use it to raise funds. First Funder will transition to support equity-based funding in the future, after provisions of the JOBS Act regulating crowdfunding are finalized.
The idea for First Funder comes from Kevin Zell and Brendan Karp, two 18-year-olds. They developed the idea while taking part in a DECA entrepreneurship program for high school students.
First Funder is privately held and, according to the press release, has received angel investment from Joseph Zell, general partner with Grotech Ventures, among others.
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