Startup Spotlight: FreeFunder takes on Kickstarter with no-fee crowdfunding platform
Crowdfunding is designed to help people who are low on cash bring their ideas to life and finance big ticket items they couldn’t otherwise afford. It’s a valuable resource for innovators, creatives, and people who find themselves in a bind, but the five to nine percent service fee that most platforms charge can be a tough pill to swallow.
That was the experience of John Symonds, a Seattle developer who wanted to get funding for a short film a few years back.
“I wanted to avoid the fees on Kickstarter and GoFundMe, and knew that the success of the campaign was based on my network rather than the platform,” he said.
The experience inspired Symonds to build a site that allowed users to create crowdfunding campaigns without turning over a chunk of the returns. After a couple iterations, FreeFunder was born.
The site, which has been live since May, makes money from voluntary donations rather than a percentage of campaigns. When users contribute to a campaign, they’re prompted with an option to make a small donation to FreeFunder as well.
FreeFunder also donates directly to campaigns when they reach certain sharing milestones on social media. It’s a win for FreeFunder, as shares help the site gain exposure and it helps customers reach their fundraising goals.
Symonds shared details on FreeFunder for this Startup Spotlight, a regular GeekWire feature. Continue reading for his answers to our questionnaire.
Explain what you do so our parents can understand it: “FreeFunder is a crowdfunding platform very similar to GoFundMe, except there is no 5 percent platform fee. Instead of charging a fee to the campaign owners (who need the money most) we promote optional donations directly to FreeFunder when a contributor is making their donation to a campaign.”
Inspiration hit us when: “For the first version, it was when we needed to raise money for a short film. For the new version, inspiration hit when I saw that there were other crowdfunding platforms that had figured out different ways to monetize their fundraisers or encourage donations without needing to charge a fee.”
VC, Angel or Bootstrap: “Bootstrap! I began rebuilding FreeFunder on the side while I was still working as the CTO of a Green Building company from Seattle. It took a lot longer to do it that way, but the result was having a site built just the way I wanted it while avoiding the normal startup costs.”
Our ‘secret sauce’ is: “Something that makes FreeFunder different than any other crowdfunding platform, and the thing that has helped it grow the most, is that we actually donate to campaigns on our platform when they reach different sharing thresholds. This encourages people who visit the fundraising page to share it with their friends even if they can’t contribute themselves. Having that incentive out there has led to some campaigns getting shared much more often than they would have if the incentive wasn’t so explicit.”
The smartest move we’ve made so far: “Adding the sharing incentives. When a campaign gets 100 Facebook shares we donate $ 20, and when it reaches 500 Facebook shares we donate another $ 50. Most campaign owners will make this really clear to the people they reach out to, which gets the shares going much faster than they otherwise would. The cost, from an exposure standpoint, is minimal. $ 20 for 100 shares is $ 0.20 per (organic) share, which is a steal.”
The biggest mistake we’ve made so far: “Underestimating the willingness of contributors to donate to FreeFunder. Originally, even on the newer version of FreeFunder, there was a ‘Premium’ version that provided a few extra tools. On the premium version, there was a platform fee of 2.9 percent, and I expected that to be better than the completely optional donation rate on the free version. As it turns out, people willingly donate more than that to FreeFunder on average, so we eliminated the premium version and made all of those features available for free.”
Would you rather have Gates, Zuckerberg or Bezos in your corner: “That’s a tough one, but I have a sense that Zuckerberg would be more understanding of the scrappy bootstrapping type since he started out with some programming of his own, so I’ll go with Zuckerberg.”
Our favorite team-building activity is: “Well I’m the only employee, but I do consult with several techie friends and have had them do some contract work for me, so I suppose our favorite team-building activity is talking about FreeFunder over drinks.”
The biggest thing we look for when hiring is: “FreeFunder has almost doubled in volume each month this year, which is great. Although I haven’t hired anyone full-time yet I expect that it’ll happen fairly soon. I’ll be looking for people who like small startups, wearing multiple hats, and have growth-hacking mindsets.”
What’s the one piece of advice you’d give to other entrepreneurs just starting out: “Just get started. Everything will need to adjust, so don’t wait for the most perfect plan. Start working on something and just keep chipping away and making adjustments!”
Startups – GeekWire http://www.geekwire.com/2016/freefunder/