Eagan-based Exogal is going beyond Kickstarter and entering the future of financially incentivised crowdfunding.
Using Kickfurther, a service based in Boulder, the venture is seeking to raise ~$54k from backers who want actual return on their investment for dropping a dime.
“We looked at Kickstarter, but since our hardware products are so unique and expensive, we had no cheap spiffs,” says Jeff Jeff Haagenstad, CEO.
Kickfurther partners with companies that have a proven track record to fund their manufacturing inventory in exchange for a consigned rate. If the funding goal is met, Kickfurther buys the inventory and gives it to the business while holding title. If the business sells said inventory, a fixed percentage goes to the backers every period depending on the amount of inventory sold (along with a fee to Kickfurther).
In Exogal’s case, this is their fourth production run having sold ~700 analog-to-digital “Comet” units already. The Kickfurther deal offered now is an 8% return over 4.5 months (about 21% annually); there is no minimum or maximum investment, says Haagenstad.
In essense, he says their cost of capital is 11% — a significantly less rate than they could find elsewhere, including factoring. Unlike equity crowdfunding, Kickfurther’s investment opportunities are open to both accredited and unaccredited investors.