Audio Startup Exogal Launches Cash Money Crowdfunder

Image titleEagan-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.

The company was launched in 2013 by a team of industry veterans, has raised three hundred thousand equity, and is a one time Minnesota Cup contender.


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  • Zach Robins

    Very interesting twist on alt-financing. Curious how Kickfurther skirts around accredited investor req’s, but nonetheless a very unique way to fund product-based businesses. Best of luck to Exogal!

    • Jeff Pesek

      I chatted with the founder, he referred to it as “inventory-based crowdfunding” – and was clear that it’s not a debt instrument.

      Certainly differs from your typical crowdfunding and a space to watch, although reserved for tangible product companies with proven delivery, therefore limited in application for most.

      After speaking with the CEO of both Exogal and Kickfurther, it’s clear that startup businesses are hungry for new avenues of capitalization and I think there will be a big niche for Kickfurther, et. al.

      Regardless of what it’s called, if it works as advertised and is accessible to the unaccredited — 8% (20% IRR) is a competitive rate of return compared to the volatility of manipulated public markets that are disconnected from promising early stage ventures.

      If the trend is for more capital to move locally given the means, then Kickfurther may be one to watch…

      • Zach Robins

        It’s very novel and I’d love to recommend it to product-based clients as an alternative means of financing, but I think they are walking a fine line in claiming it’s not a security since they are “involving the user” through each step…read more here

        • Jeff Pesek

          And therefore you would -or- would not recommend it, Zach?

          Kickfurther is saying that because they are involving the user that they are not a security in the traditional sense…ok…go on we’re listening…then author writes:

          “But other investments also can be considered securities if they fall under the definition of an investment contract per the “Howey Test.” Essentially, if you invest money in a business enterprise with the expectation that you’ll receive a profit through the efforts of others, it’s considered an investment contract and, thus, a security.”

          Question: is is the backer investing into Acme Widgets, or are they investing into
          Kickfurther, since they hold title to Acme’s inventory? That’s the first real test I see here

          …and it’s interesting in observation that CO state securities chief is allowing them to operate and expand ;)

          It’s new and novel forsure, and with that there’s real money at stake (to be made or lost!) in such gray areas – not just in finance – in our economy overall…seems to be how things happen in this country, by pushing limits and challenging the norm, old industries evolve and new pioneers are made.

          Depending on oh so many factors, we have villians and we have heroes, but the lines are often as fine as this one.

          Keep in mind that we’re talking about laws dating back 50-75 years governing what entrepreneurs can and cannot do in the own enterprise, in their life and time.

          Things have changed too much to even draw correlations to reality anymore!? What’s that about the new JOBS act and pending securities reform? Yes, it’s still as gray there as anywhere else, despite best intentions.

          But creating legal limbo is a fantastic way to ensure that only the chosen ones who pay the price are allowed to go and grow! Fine lines and gray areas are an attorney’s lifeblood, not to mention the best way to systematically rig a game when you can create (and modify) the rules along the way. OK, I digress ;)

          Inconclusively as the Kickfurther situation is, my general takeaway would remain constant: you don’t need to be a lawyer to see it as a net positive for entrepreneurs to have more creative options in terms of capitalizing their businesses in pursuit of prosperity when faced against regulatory barriers.

          Furthermore, someone who has earned their economic keep (whether that be one dollar or one billion) has the right to risk what they want how and when they want, I posit.

          There is no inherent fraud occuring here, no malicious intent, or white collar crime here.

          For those elements, we look to Wall Street, which is repeatedly proven to be corrupted with lies and fraudulent activity of the highest order (if we are to even believe in financial rules and regulation anymore?)

          TLDR; one attorney might interpret and advise opposite of another on this matter, but it’s worthy first of close examination to understand where lines are drawn and where they fade. Ultimately, it’s up to the entrepreneur to make their best informed risk/reward assessment in pursuit of goals and objectives.