Historically, entrepreneurs and businesses in need of capital to bring their ideas to life had limited options, such as venture capital, bank loans and credit cards. But thanks to crowdfunding services like Kickstarter and Indiegogo, it's now possible for entrepreneurs and businesses to raise money from consumers willing to pre-order their wares.
As crowdfunding has grown in popularity, an entire ecosystem has formed around it. One of the companies in this ecosystem, BackerKit, aims to help entrepreneurs and companies utilizing crowdfunding by providing them with tools that alleviate the often-tedious administrative and logistical tasks that come after a successful crowdfunding campaign – administrative and logistical tasks BackerKit refers to as "post-crowdfunding mayhem."
To date, BackerKit's service has been used to manage more than $40m in pre-orders. In an effort to ensure that the entrepreneurs and companies using its service can scale as that number increases, BackerKit this month unveiled a Crowdfunding Partners platform designed to allow third party service providers to support the BackerKit customers who need their services to successfully deliver what their backers have been promised.
At the core of the Crowdfunding Partners Platform is an API that service providers can use to efficiently interact with the data associated with crowdfunding projects. For instance, using the BackerKit API, partners like ecommerce order fulfillment provider Fulfillrite can easily obtain the data they need to fulfill orders for crowdfunded projects. Currently, that data is often not available in a structured, programmatic fashion. For some providers, the hassle is simply too great, something BackerKit's co-founder Maxwell Salzberg learned first-hand. "When I ran a large crowdfunding project three years ago, fulfillment companies wouldn't touch my project with a ten foot pole," he explained.
A new way to build a business
BackerKit believes that crowdfunding is going to produce the "next wave of business owners" and the growth of the market certainly suggests that the future is bright.
Crowdfunding is now a multi-billion dollar source of funding for entrepreneurs and businesses, and Kickstarter, one of the most popular services, generated more than $500m in funding pledges alone in the past year. This week, Oculus, a company that raised $2.4m from 9,500 backers in 2012 on Kickstarter to build a virtual reality headset, was purchased by Facebook for $2bn, suggesting that crowdfunding could, for some companies, become the most attractive source of capital available.
If BackerKit has its way, the company's Crowdfunding Partners platform will give crowdfunded entrepreneurs and businesses access to the services that can make their lives easier and their projects more successful. "Whether you need a fulfillment company, mailing lists, an e-commerce store, or other services, BackerKit's partner platform is the engine that is going to help you get there, so you can focus on making new stuff," Salzberg stated.