Guiyang, China is positioning itself to be largest crowdfunding financial exchange on the planet, an exchange that is at the epicenter of what is expected to be a $50 billion disruptive industry. What was but a few short years ago largely viewed as illegal, is now coming to the forefront as a viable alternative financing path for the myriad of businesses that are sprouting up across the country. The proposal is a simple one, and as minor investor of the crowdfund exchange itself, I'm in a unique position to offer it:
1. Create a prototype platform that demonstrates how an accredited investor or individual/celebrity led syndicate crowdfunding platform would work for the China market.
2. Feature several qualified projects to showcase the possibility and benefits of using crowdfunding as a means of financing or leveraging.
3. Demo the platform to established F&B operators/investors, already lined up and prepared to finance the concept after successful demonstration of viability.
4. Tweak & Scale.
What problem does this crowdfunding platform solve? As an entrepreneur or even an established corporation, one of the biggest challenges of growing any business is the process of financing. For upfront capital intensive businesses, this usually results in resorting to discussions with angels, VC's or private individuals which have both clear benefits and downsides. Crowdfunding provides an alternative means of financing by reaching out directly to the future consumer(s) who collectively finance a project to maturity and who have a vested personal interest in the success of the project.
The current plan is to build a hybrid crowdfunding model with a AON reward based model upfront and a profit sharing model as a Collective Investment Scheme - this is subject to change dependent on what really works. The benefits for a co-founder are clear as I already have the funding and the legal structure for developing the prototype. In addition, I already have F&B investors who are willing to front RMB 10M (USD 1.5M) upon successful demonstration of viability, and have several viable projects which can be used as the initial feature projects to launch the platform. My greatest challenge is that although I have done some simple software development I'm not an advanced developer with fluency in both frontand back end software (web) development.
The risks to this endeavor lies in our ability to develop a proper crowdfunding model in reasonable amount of time (several months) and our ability to scale quickly enough to offset development and overhead costs. Another challenge is our ability to design and build an environment where consumers are absolutely comfortable entrusting their finances to the platform with confidence.