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Crowdfunding has become a viable alternative for financing business ideas in Jamaica. In addition to the well-known crowdfunding websites like Kickstarter and Indiegogo, Jamaican businesses can access funding from local and regional crowd funders.
Local angel investors, financial institutions, and entrepreneurs made crowdfunding possible for local businesses.
Crowdfunding comes in two forms – donation-based funding, and investment type crowdfunding. The main difference is that the contributors to the investment based model also has an equity stake in the business or project being pitched.
In 2013, the Jamaican National Group (JN Group) introduced its iSupportJamaica.com crowdfunding website. This platform is described as the first crowdfunding website in the English speaking Caribbean. Administered by the JN Small Business Loan Limited (JNSBL), this crowdfunding platform helps micro, small and medium-sized enterprises that have difficulty raising funds through formal lending institutions.
Since its inception, the iSupportJamaica crowdfunding website has raised funds for sixteen projects related to education, health, and community development.
Donors can visit the website, explore the projects found there, and donate to the project or projects they prefer to support. There are no restrictions to the amount donors can contribute. On this site, no donation is too small for the projects. Creating an account on this website is free for donors.
Entrepreneurs and project developers can create and upload their idea pitch. The upload also includes relevant project description. In addition, the funding request includes the goal amount of funds required, a video showing the project idea, and other information that will persuade donors to contribute. The website provides guidance and resources for the project creator to put together a well-coordinated information package that includes perks for contributors. Jamaicans living at home and abroad, persons from the wider Caribbean, and friends from other countries may use this platform.
The FirstAngels Jamaica network was established in 2014 as a means for startups to connect with venture capitalists who are looking for good business ideas in which to invest. The FirstAngelsJa Network also offers a platform through which high net worth individuals (Angels) can invest directly in such business ventures in a structured manner. They invest in the startup enterprise in exchange for a defined stake or equity in the business.
Importantly, members of FirstAngelsJa must meet a clear set of net-worth and income requirements to be qualified as “accredited investors”. Also, they act as advisors and mentors to help the entrepreneur grow and develop.
The angel network does not operate in the same way that crowdfunding platforms do. It, however, represents an alternative source of financing for entrepreneurs who may have difficulties raising the capital needed to get their businesses on a good start.
To date, the FirstAngelsJa Network has invested in thirteen viable business ventures. It also has a waiting list of 390 applications for funding.
Startups wishing to access funds from this angel network must prepare themselves rigorously as though they are facing a shark tank. The business pitch is a crucial component of the process and much preparation is required to convince the potential investor to support the startup.
Caribbean Investment Network
Interestingly, another Caribbean based angel network, Caribbean Investment Network (CIN) offers capital financing for startups or businesses needing a capital injection. It operates similarly to the FirstAngelsJa Network with the exception that investors do not have to satisfy the same high net worth requirements as the FirstAngelsJa members. It is easy to sign up on the Caribbean Investment Network, and both investors and entrepreneurs can connect directly once investors are satisfied with the pitch loaded on the site.
Entrepreneurs needing funds can register in three easy steps. First, register for free. Second, add a pitch. Third, connect with the network of potential investors. The Caribbean Investment Network has a growing list of investors of all sizes (amounts willing to invest). Currently, there are more than 200,000 investors looking for viable business projects to fund.
Investors wishing to support viable Caribbean businesses and projects on this platform can also register quickly and easily. First, register for free. Second, browse and filter business and project ideas. Third, connect with an entrepreneur.
Currently, there are more than 160,000 investment opportunities listed on this platform. These business opportunities represent eighteen diverse sectors including Agriculture, Education and Training, Media, Entertainment, Technology, Software, and Transportation.
Other Crowdfunding Options to Try
Of course, there are other crowdfunding options that Jamaican entrepreneurs can try. Here are the four top options.
- Kickstarter supports creative projects to get off the ground through donations. These projects are mainly new creative ideas such as film, art, literature, and music. Kickstarter has been around for a long time, having been among the first crowdfunding platforms established for this purpose. Kickstarter offers two models for fundraising – the fixed funding where a goal must be reached in order for the funds to be released. The second model is the flexible funding model in which the project creator can keep the money raised whether or not their goal was met. Kickstarter continues to grow as a popular crowdfunding option.
- Indiegogo supports a wider range of business and project opportunities than Kickstarter. Whatever the business or creative idea, Indiegogo will support it. This crowdfunding platform is also donation-based. It is also open to businesses and individuals worldwide. Because this is a donation-based platform, Indiegogo does not offer investment type funding.
- Crowdfunder.com supports businesses through investment type funding. It offers equity crowdfunding from individual investors (like angels) and venture capitalists looking to support sound business ideas. While Crowdfunder is a UK based platform, anyone from around the world can start a fundraising campaign.
- Crowdrise, unlike the crowdfunding platforms discussed already, this platform specialises in charitable causes. It also uses a donation-based model for fundraising. If your business is involved in charity or community development work, this site is worth trying.
Going Beyond the Pitch
Crowdfunding is an alternative way to raise much-needed capital for Jamaican businesses. Evidently, not many business ideas make it beyond the pitch stage. To boost your business idea’s chance of success beyond the pitch, careful planning, preparation, and execution are necessary. Take nothing for granted. Therein lies the difference between success and failure with crowdfunding.