Two weeks after its successful launch, Crowd Supply has announced an innovative early payment policy for project creators. Crowd Supply, which launched on March 20 and saw over $40,000 worth of project backing in its first week, will release backer funding to project creators as much as two months ahead of Kickstarter.
Crowd Supply is the first marketplace that supports project creators from crowdfunding through product delivery. On top of funding, creators use Crowd Supply to accept pre-orders, access warehousing and fulfill customer orders. By recognizing the time-sensitive nature of product development, Crowd Supply is giving creators the financial head start they need in order to successfully deliver their products and help them launch a sustainable business.
Time is Always Money
Other sites, including Kickstarter, require that project creators to wait up to 30 days after a successful crowdfunding campaign ends to receive even the first dollar of pledges. Kickstarter’s stated position is that a project delivered late doesn’t diminish its value to backers [1]. This may be an appropriate position for artistic projects, but for most high tech consumers, the statement is preposterous. For project creators that are designing compatible accessories for popular electronic items like smartphones, time is always money. The short product life of these consumer electronics products requires a time-is-of-the-essence approach to all aspects of product design.
Delays Shouldn’t Be Normal
With 84 percent of its projects shipping late, the timing of Kickstarter’s payments puts creators at a disadvantage before their funding campaign is even finished [2]. Larger projects are more likely to be delayed, and the delays are longer.
“Historically, one of the main shortcomings of crowdfunding platforms is the inability of creators to complete high-demand projects on time,” said Lou Doctor, co-founder and CEO of Crowd Supply. “Projects that reach their funding goals early in their campaigns are often generously overfunded. Then, due to the unexpectedly high volume of interest, creators end up struggling with fulfillment and deliver late. On Crowd Supply, when a project reaches its funding goals early in its campaign, creators will receive funds to immediately jump start their development. Overfunded projects on Crowd Supply will have a much better chance of staying on schedule.”
Fast Funding with Crowd Supply
Backers’ pledges are processed immediately after a Crowd Supply campaign reaches its funding goal. Five business days later, funds are available to project creators. In the case of a 60-day crowdfunding campaign, that could give creators their funds much as a full two months ahead of other sites. For those developing products where time-to-market is important, that difference is critical.
A real-life example of the need for urgency can be seen in the Reactor for iPhone 5 project, which launched on Crowd Supply last month. Reactor is a patent-pending micro-generator built into an iPhone case that provides a back-up power source when no wall outlets are available.
“A two-month difference in the ship date of a product like Reactor can make the difference between a product that turns a profit or one that ends in a financial loss for its developers,” said Jim Clark, inventor of the Reactor. “We chose Crowd Supply for the crowdfunding of Reactor because they care deeply about the success of project creators, and have built features that are important to us into their platform.”