P2P Lending / NFT Lending Forum

Hi All,

Disclaimer, I work and invest at Kickfurther.

Kickfurther has a new take on p2p where investors crowdfund inventory for businesses at cost pricing. The business sells the inventory at retail and pays the backers a profit out of the margin(usually 15-30% annualized) on what they put in. If the business cannot sell the inventory it is seized by Kickfurther and sold at discount to recoup the investment.

It's been around for a year and after funding $2 million+ of inventory the initial results are pretty impressive.

Here is a user quote: "I've invested in over 50 companies on Kickfurther. Of those I have one company that is two months late, one that is one month late, and four that have paid off at least one month early. The rest are on-time."

Recent Press: http://www.personalincome.org/interview-with-sean-de-clercq-kickfurther/
http://www.marketwatch.com/story/how-to-make-money-from-a-companys-inventory-2015-02-27

Get $10 Free to start investing ($20 minimum) by singing up through this link - https://kickfurther.com/dsw

If you want to learn more go to https://kickfurther.com/learn or our active subreddit community - https://www.reddit.com/r/getgrowing/

Best,
Erik S.
CMO at Kickfurther
[email protected]

I see a statement on the web site that says "22% averaged annualized return for backers". 

Do you share historical data to back that up?

Your web site gives no evidence that you have a physical existence in the United States.  There's no address.  No phone number.  Nothing. 

You are incredibly arrogant to think I'm going to send money somewhere into cyberspace when I have nothing on which to base a belief that your organization exists.

I did find an address in NJ on your privacy statement.  That could be headquarters, or could be address of your lawyer, I have no idea.  Guessing that it means you are in NJ, I searched NJ corporation records for "Kickfurther", and got nothing.  Perhaps you are registered in another state.  I dunno.  I'm not going to check all 50 of them by hand to find out.  You have to help me out here.  This information should be on your web site.

I checked the domain records for "kickfurther.com" and found that it is registered to someone in Panama.  May be a service that hides names of folks who don't want us to know who they are. 

I understand everyone's desire for privacy these days, but when you are operating a business, and asking people to trust in you and SEND YOU MONEY, you can't hide behind anonymous web sites, anonymous domain registrations, have no address or telephone, etc. 

A high school kid in China could have registered a domain name anonymously, built a web site with stock photography, etc.  How would we know?

You may be very real, but you've done nothing to show us your reality.

Hello Fred93

I assure you we are very real and I apologize if I appeared arrogant. Our legal name is Ouiby inc. we DBA as Kickfurther since a business model pivot in our accelerator program a year ago. We highlight a number of third party press pieces on our home page in order to establish credibility. We are physically based out of the Boomtown accelerator space where we graduated from a year ago in Boulder Colorado. Their website is linked in our footer. We are very responsive by email at [email protected] and there is a phone number for interested businesses on our "List Your Business" Page. 

Here is a recent article heavily referencing our location
http://www.inc.com/zoe-henry/startup-hot-spot-boulder-colorado.html

We won the 2015 pitch competition at the Lendit Conference.
http://blog.lendit.co/overview-of-lendit-usa-2015-day-1/

We have an active community where our users discuss their experience and communicate with us about the platform. They are not affiliated, our comments are demarcated by "flair" https://www.reddit.com/r/getgrowing

We were recently named one of Extreme Tech Challenges top 25 Semi Finalists
http://bizwest.com/kickfurther-sphero-among-local-startups-vying-to-pitch-at-consumer-electronics-show/

As to your Question about our historical data, I'll be the first to admit it's limited given we've only been in operation for 11 months, however we have done 150 deals to date. This is third party data put together by a user of our site. Keep in mind many of the ROI's listed are not annualized and the numbers do not take into account compounding benefits of monthly pay outs. http://bidfurther.com/2015/11/25/3-things-weve-learned-from-analyzing-kickfurther-data-thus-far/

I can tell you historically our investors have a 90% reinvestment rate on the platform and that 995 non-institutional users to date have funded 2.1 million dollars in inventory.

Happy to answer any other questions you may have.

from: erikfurther on November 27, 2015, 11:19:50 PM

@Fred93

Thanks for taking the time to engage and thank you for your feedback. We are young and care deeply about creating the best platform for users. We haven't had offer performance data aggregated on the site, because we have 42 offers completed to date with 20 or so completed in the last 10 weeks. Individual offer performance is 100% transparent on the site.
Click on any of our completed offers to see a graph of actual vs. expected payouts. http://kickfurther.com/offers/complete

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from: erikfurther on November 28, 2015, 03:47:54 AM

@Fred93 Good points I hope I can clarify a bit

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Companies that agree to this scheme must not have typical bank financing available.  So I expect credit quality to be suspect and not sure if 22% rate is going to be enough for the problems that will arise.

While I get it is important to talk about collateral, I'm suspect on how much protection it actually provides.  What are you advance rates on various types of inventory?

Hello RawRaw,

The companies who use Kickfurther cross a spectrum. Some are doing less than 100k in revenue annually and have existed for 1 year, others are doing over 5 million or have existed for over 10. All of them were operating and financing their business in some way before they acquire funds from the Kickfurther platform. Many are financing PO's for established retailers. They have access to other forms of financing whether it's personal, institutional, or from investors. Some have bank loans, revolving door working capital loans with services like paypal/Amex, MCA histories, factoring relationships, etc, but they still find Kickfurther compelling for three reasons.

1.) Having access to financing doesn't mean having the amount you need, at the time you need it, to meet obligations and take advantage of growth opportunities. This is especially true for growing companies whose financing is capped by the sales figures of previous years. Kickfurther targets companies who can meet their existing cash flow needs, but who can use the additional cash flow to invest in growth.

2.) A significant portion of our companies are unbankable due solely to how young their business is regardless of their financials and other evidence of success and credibility

3.) Companies who do not need funding at all will use Kickfurther as a marketing play. Given that they have financing cost anyway, Kickfurther allows them exposure to thousands of users with disposable income.
It allows them to engage very personally with hundreds of backers who derive a financial benefit on a monthly basis from working with their brand. They can communicate with these backers directly, offer discounts, and the backers are incentivized/prompted to share about the brands on social media when they receive paybacks. In addition any user on Kickfurther can actually stock inventory for the brands they back and originate sales to their personal network - Here is my store http://kickfurther.com/store/estraub

An offer of 5-10k of inventory at 10% in 6 months would bear a cost to the business of 695-1390. That is an extremely sustainable marketing cost to derive the sort of deep engagement that comes when backers partner with your company on Kickfurther

Here are a few other Marketing initiatives we are running currently to support our brands:
http://info.kickfurther.com/kickfurther-holiday-store
http://info.kickfurther.com/kickfurther-new-years-contests

4.) The final factor is simply experience. If you had a choice between paying your hard earned margin to a lender who takes their vig and turns their back or to a group of supportive "cheerleaders"' who celebrate your business victories and mourn your struggles which would you prefer?

As to your question of collateral and the advance rate. Users are not making an asset backed loan. You would LITERALLY be purchasing the inventory at 100% of cost pricing and simultaneously placing it with a business owner that has a history of selling at a margin on consignment. You have some idea of this margin by looking at a figure we call the "PSR".

If the business owner fails to sell within the projected timeline the users can vote to cancel the contract and Kickfurther will provide options to backers to attempt to re-sell or liquidate the inventory. This blog post by our CEO details the process in this case - http://info.kickfurther.com/our-cancellation-process-in-a-nutshell

We currently have 2 active cancellations
1.) Covers about 300 unsold wireless bluetooth headphones
2.) Approximately 9 unsold Les Gibson Brand guitars

Now I'm being totally upfront when I say this model has to be proved out, but consider this.
These items were being previously sold at 100-500% markups, if we can liquidate them at even a 30% mark up on cost there is the opportunity that cancelled offers could be even more profitable than successful ones.

What I can say for certain is that my CEO's background is in retail inventory sourcing and merchandising.
I can also tell you that our Operational advisor is John Donovan who was the original COO of Lending Club.

We are committed to providing a uniquely compelling mix of financing and marketing benefits that will attract solid companies to use the platform responsibly. We are equally committed to doing what we can to defend our community's interests when bringing on brands and when pursuing options in the event of a cancellation.

Here are a list of brands that have funded purchase order backed goods on Kickfurther
http://kickfurther.com/offer/filling-large-purchase-orders-for-the-holidays
http://kickfurther.com/offer/sodo-apparel-rei-po
http://kickfurther.com/offer/help-motion-sound-get-in-motion
http://kickfurther.com/offer/ready-set-go-holiday-2015
http://kickfurther.com/offer/titin-tech-sept2015
http://kickfurther.com/offer/mirage-pet-products-amazon-expansion

Many more are very credible and backed by a mixture of wholesale orders or a history of strong online sales and wholesale orders. I'm not trying to paint an overly rosy picture, but what you can see for certain is that as we've been able to fund larger amounts of inventory we are recruiting significantly more established brands with significant number of offers by brands that are on their second Kickfurther offer so they have a visible history of performance on our platform.
Example: http://kickfurther.com/offer/vitajuwel-and-village-rocks

You have every right to be skeptical, all I ask is that you take a look, keep an eye on progress and if curiosity takes you this link will give you $10 free and you can back a brand for as little as $20 http://kickfurther.com/dsw

If you've read this far, I'm very appreciative of your interest. We value knowledgeable feedback very highly!

Best,
Erik





In the case of our first two cancellations they involve
1.) About 300 Wireless bluetooth

To clarify that list of Purchase order backed offers is meant to be representative and not exhaustive. There are many other offers that fit this description out of the 145 offers funded so far.

So I'm buying inventory, someone is selling that inventory that I own at a mark-up, and I share in the profit?  And if the person cannot sell that inventory, I get my product back.  So what motivates the company to sell the inventory?  Seems like I bear all the risk?  There appears to be no negative consequences to the company.

What are the minimum requirements for businesses to be listed?  I understand you are dealing with companies with bank relationships (I suspect factoring is more common than asset backed loans for these guys), but surely you still have some criteria?  Or are you letting the market decide a la Prosper 1.0?

Do people really pay $19 for shaving cream? Especially when they can get it direct from the company for $15?

from: erikfurther on November 28, 2015, 10:40:19 AM

I will answer one by one @rawraw

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Thanks for the replies.  If you aren't versed in what happened in Prosper 1.0 (I mention this because IIIRC you said you are new to P2P somewhere), I'd do some reading since it's seeming semi-similar approach.  Prosper eventually changed after a lot of headaches and a class action lawsuit.  Your structure is much more complex than consumer credit, which generally isn't conducive to the market (esp retail) getting it right.  I'm fairly versed in lending (much more than a typical investor), and this is a lot to think about for me to get a grasp on.  But I am rather slow   I'll go look around the website

@BobEubanks

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from: erikfurther on November 28, 2015, 11:02:14 PM

Let me save you some time, Erik.  The users here want to ach xfer in some money on X date and ach xfer out some more money on y date.  They do not give a rat's ass about the brand, the story, the product, the business owner, your platform (except to the extent that you will be acting as their fiduciary agent for their funds).  The demographic here is an investor demographic, not a multi-level marketing userbase.  Most of us are too old and too lazy to bend over to pick up a nickel, unless we think we can find a way to scale it (while hiring someone else to do the bending over part).  The exact moment that I tuned out and stopped navigating your website was when I saw that to "invest" I had to become a social media sales rep for whatever hippy-dippy crap (which I'm sure sells, but I'm sure as hell not paying for the  'privilege' to sell) was being financed.  "You must twit, tweet, facebook, email, blah blah, at least six or seven friends regarding the junk you financed".   I'm para-phrasing, but, you get the point.  It's not the first time I've seen that idea;  Prosper played around with investors "sharing" the news that they had just invested in X loan - btw, John Donovan should have known that and warned you that it sucked.

That said, I think the model is interesting and I know tons of money is made off of factoring/MCA.  I just think you guys have to iterate the model.  I'm still not sure what the hell your differentiator is supposed to be.  Mostly, we get pitched "very special social algorithm" underwriting models as differentiators, these days (before passing).  In your case, the differentiator is...?  This is why Fred93's asking about what regulatory advantage or provision you're operating under and wanting to get down to the moving parts of the model...

Anyway.   That's all you get for free.  Good luck.

I've been reading this site for a little while now, but felt compelled to register so that I could leave a message about this so-called opportunity.

This seems to me like the quintessential developer solution (they recently pivoted their business model) to a business problem that the developer has little to no understanding of.  I'm speaking both of inventory financing and investing practices.

I suspect that these developers are good at developing.  But, as a former asset-backed lender and a current active investor, I wouldn't touch this "opportunity" if it were the last one on earth.  The data is non-existent (not just because the investment vehicle is new, but because the data isn't available as so appropriately noted by a poster earlier).  The incentives appear misaligned (again, as noted earlier).  It just feels like a gamble rather than an investment at this stage.

And before people say I'm being too risk-averse, I'm not.  I want to be compensated appropriately for the risk that I'm taking.  But in this case, I can't even dimension the risk or returns given lack of data.

I think those posting before me in this threat did a fantastic job of challenging the investment and business rationale, and for that I'm glad I took the time to read through everything. 

I am hopeful that more investing opportunities come along.  That said, those opportunities need to be fully-baked for them to compel me to invest.  What we have here are a few raw ingredients. 

When you click on the Brand, you're then taken to a screen that shows more information on the company. You can see the percentage sold for completion, which is the amount of inventory that needs to be sold for buyers to earn back their principal and pay out (which is 67% for this particular company.) You can also look at the company overview and growth, past Kickfurther Co-Ops, Kickfurther score and reviews.

Quote"> from: Fred93 on November 28, 2015, 09:20:37 PM