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Financing Inventory Purchases Through the Kickfurther Crowdfunding Platform
Sean De Clercq is the CEO of Kickfurther, a successful crowdfunding platform. Throughout his entrepreneurial career, Sean’s driving goal has been to create a solution to one of the most difficult problems that businesses face: funding the production of their inventory. Fittingly, Sean created Kickfurther to fund inventory for direct-to-consumer and major store brands such as Target, Amazon, Aldi, and more.
In addition to running Kickfurther, Sean also works as an Entrepreneur Mentor at Rutgers Business School.
Here’s a glimpse of what you’ll learn:
- Sean De Clercq discusses an opportunity to receive $250,000 in lending at no cost through a Kickfurther giveaway
- What is crowdfunding, and how does it work for an e-commerce or consumer product business owner?
- Sean explains the differences between Kickfurther funding and Amazon lending
- How often Kickfurther clients return to raise more funds for their inventory
- What kind of prep work goes into creating a Kickfurther campaign that is fully funded in a matter of minutes?
- The ins and outs of becoming a strategic and profitable investor on Kickfurther
- Sean talks about Kickfurther’s success and cancelation rates
In this episode…
Are you a business owner who is looking for a fast and effective method to fund your inventory? Or, are you an investor searching for low-risk and high-paying investment opportunities? If you answered yes to either of these questions, then keep listening!
Kickfurther is a successful crowdfunding platform that appeals to both business owners and investors. With Kickfurther, e-commerce and consumer product business owners can fund hundreds of thousands of dollars worth of inventory in mere minutes. Additionally, with its 97% success rates and 10-11% annualized returns on all investments, this platform is a lucrative opportunity for new and experienced investors alike.
In this episode of the Quiet Light Podcast, Joe Valley sits down with Sean De Clercq, the CEO of Kickfurther, to discuss effective crowdfunding and strategic investing. Listen in as Sean explains the ins and outs of raising funding for e-commerce inventory, the benefits of investing through Kickfurther, and how you can receive $250,000 in lending at no cost through his incredible giveaway! Stay tuned.
Resources Mentioned in this episode
- Sean De Clercq on LinkedIn
- Kickfurther’s $250,000 Giveaway
- Quiet Light Brokerage
- Joe Valley on LinkedIn
- Joe Valley’s Interview with Roy Morejon
Sponsor for this episode…
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Hi, folks, it’s the Quiet Light Podcast where we share relentlessly honest insights, actionable tips, and entrepreneurial stories that will help founders identify and reach their goals.
Joe Valley 0:29
Hey folks, Joe Valley here from Quiet Light Brokerage and the Quiet Light Podcast. Thanks for joining us again. Y’all know my story. I’m an entrepreneur, been self employed since 1997. A long, long time ago. I’ve built a lot of sold my own online businesses. I’ve produced a couple of television infomercials, I’ve done a ton of radio. I was at and I don’t think I’ve ever said this on the podcast before but I was actually the host of one of the television vision infomercials as well. And yes, I started to the whole thing my wife was driving and I studied lots of retakes. Everybody on the Quiet Light team has you know, folks is an entrepreneur. First and foremost, we’ve all built, bought and sold their online businesses. We actually just had somebody joined the team that was on Shark Tank got a deal from Robert back in 2014. And now is doing incredibly well ecommerce on Amazon. Lots and lots of licensing deals with companies like Marvel and Disney and things of that nature. So the quality and caliber of the team is pretty impressive. I personally have sold about $100 billion in total transactions. And I’m just one of 12 now so great team here and we love working with entrepreneurs. We’ve got one on the call today. It’s Sean De Clerq. Sean is the founder and CEO of Kickfurther, and it’s a crowdfunding platform. It’s not something I know a whole lot about. So I’m excited to talk with Sean today. But essentially what they do is they connect companies with individuals seeking to support businesses and earn a profit. sounds confusing a little bit. But businesses you know, that are consumer product based businesses can get funding for up to $2 million in inventory. For a cost it’s 30% cheaper than traditional lending. And funds are available when you need to pay your suppliers and you don’t need a purchase order or accounts receivable to access the funding. Everybody in the audience that runs a consumer products based business, ecommerce business has had an inventory funding problem in the past, they’ve run out of inventory, which they lose money in terms of profits, they lose money in the value of their business. And they’re just trying to keep up with the treadmill of trying to buy more inventory with a business that’s growing like crazy. That’s a problem. Most of you have, from the buy side, those folks in the audience that are buyers, this may be an opportunity for you to invest in e commerce businesses without actually having to operate them. You can help fund their inventory and return earn a very healthy return on investment. The third thing we’re going to talk about today was Sean is a promotion that Kickfurther is doing they’re giving away $200,000 in inventory lending at no cost. When the clarify they’re not giving away $200,000 $250,000 they’re giving it away at no cost. Right, Sean?
Sean De Clerq 3:12
get that right. No cost of the finance, right.
Joe Valley 3:16
Financing. Awesome. Sean, I could talk about your impressive background and resume for a long time here. But let’s just jump right into it. How you doing today.
Sean De Clercq 3:25
Great. Joe, thank you for the excellent introduction. I think you did a sterling job of describing Kickfurther.
Joe Valley 3:29
Now we’re talking to you. You’re up in New York at the moment, but Kickfurther was originally founded back in 2015 in Boulder, Colorado. I think that right?
Sean De Clercq 3:38
Yeah. So we actually incorporated August 2014. And we went through an accelerator in the fall of 2014. We launched our soft launch was January 2015. And we we grew out in Colorado for four years. And then we won the 43 North competition, which brought me and half the team to Buffalo, New York, which is where I am now.
Joe Valley 3:57
Wow. And you’re from Jersey originally. So I guess it’s been cold pretty much wherever you’re going. Right?
Sean De Clercq 4:03
Yeah, Colorado is deceptively warm. It has a reputation for being cold. But that’s like the secret of Colorado. It gets warm during winter.
Joe Valley 4:11
And I think they have more sunny days than almost any other state in the country as well. So that’s probably one of Yeah, that’s why it’s
Sean De Clercq 4:17
exactly yeah, it’s nice though. The snow doesn’t stick here in Buffalo. If you’re on the East Coast, right? It’s just cold or warm for two weeks at a time. Like that’s the way it works.
Joe Valley 4:25
Trust me. I know I grew up in Maine and January is a miserable, miserable month. Actually, the entire winter is miserable. That’s why I live in North Carolina now. But let’s let’s jump right into this for the e commerce business owners that are currently struggling with keeping up with inventory purchases. Let’s first talk about your promotion. And then I want to jump into the details of how it works for somebody that’s raising funds. What’s going on with you giving away lending at no cost? $250,000. What is this promotion? What’s the deadline? Give us the details on that first
Sean De Clercq 4:59
Yeah. So you should be able to apply through the end of October, which is a pretty tight deadline from from where we are today. And what we’re looking at is $250,000, no costs financing, which means you’ll get up to $250,000 to fund inventory purchases, will, will produce the inventory, have it shipped to the business as you sell it back, you have to pay us back for the cost of the goods that we funded. But no more than that. So it’s essentially getting inventory that you can sell to drive revenue at no cost. That’s that’s what the promotion is. We have a bunch of really awesome partners that have added in 10s of thousands of dollars of services and different, you know, packages in terms of distribution. You know, fulfillment, all sorts of really, you know, we’re putting together a really great perk package. And it’s also an opportunity for entrepreneurs to get in front of an incredible judging panel. So we’ve got Bill Tai, legendary investor from ACTAI Global, he was the seed investor in Zoom and Canva. We’ve got Siri from Draper Associates, we have Tom Golisano, the Founder of Paychex, we have the Founder of RangeMe. And we have the CFO of New Era Caps, which provides the baseball caps for all the major league major league teams. So really, really strong judging panel, I think, I think it’s a great opportunity for anybody that’s, that’s running a product business. And what we’re looking for is the best growth story. So we want to hear from entrepreneurs that, you know, made it happen through thick and thin.
Joe Valley 6:36
Okay, so they go to Kickfurther.com, there’s information on the site about the promotion where they can apply, they’ve got a short window to do it. So we want to get them to do it right away. Is there a Kickfurther link that we can share?
Sean De Clercq 6:48
We’re talking about? Absolutely. So it’s gonna be grow.kickfurther.com/2020-giveaway. So that’s what the hyperlink is. And I will make sure, Joe, that you and your audience get it for the podcast.
Joe Valley 7:01
Excellent. Excellent. Okay. Let’s talk about crowdfunding. It’s something I have not done before. I we had Ray Morejon on the podcast last week talking about crowdfunding, he’s raised over $300 million in crowdfunding money’s very, very high success rate. Can you just give us a quick summary, though? what it means in this situation, understand that people are raising money for inventory, but give us a little synopsis of crowdfunding and how it works for the e commerce or consumer product business owner that is trying to raise some funds here.
Sean De Clercq 7:33
Yeah, so there’s two types of crowdfunding that most people are very familiar with, right, right. One is rewards crowdfunding, which is Kickstarter, Indiegogo, where you get people to effectively pre purchase your inventory, right, and then you have to deliver it to them. And the other type of crowdfunding that people are familiar with is equity crowdfunding, where you’re selling pieces of your business to investors online, right, and you’re losing control, you’re losing ownership of your business. What Kickfurther does is relatively unique in the market, we provide inventory, crowdfunding. And so what that means is our community of users will buy your goods at your suppliers cost. And we’ll have the inventory produced and shipped to you, the business owner. And then as you sell through the inventory, it’s placed on a consignment contract, and you pay us back with a little bit of consignment profit on top of what the cost of goods is. And we distribute that to your, to your funders. And what this does is it means one, you get the inventory, you don’t have to deliver it to anyone like rewards crowdfunding. So if you need to deliver a target or you have customers that you’re selling to, you know, your inventory is yours to distribute as you need. You don’t have obligations to deliver it to, you know, a group of crowdfunding rewards backers. And unlike equity crowdfunding, you retain ownership of your business where non dilutive, we don’t take any ownership percentage of your business. So we just provide the inventory and then you pay it as you sell it. So it’s zero cost to the business owner zero cost to apply. You know, I was a product business owner before I started Kickfurther. And so we we built this platform to be very flexible, and to meet the needs of product business owners. So the first thing that comes to mind is loss of control of inventory being shipped into a 3PL their own warehouse or Amazon. Explain if that’s not the case, because there’s, you know, documentation that has to be done and it’s being shipped from China directly who actually continues to handle that. Is it the folks who Kickfurther or does the e-commerce business owner still have full control of the supply chain? Yeah, so as far as the product business owner is concerned, we come in to pay the supplier and then we just want information share. So we want to know where the inventory is. That’s really, really the extent of the control. We’re looking for. It’s more like oversight, right? So we want the information. But it’s our contract says using any reasonable means to distribute the inventory. So it’s your we give you the inventory, the reason we want to work with great product business owners is we want them to run their businesses, right? We don’t want to get in their way. So any reasonable means to distribute the inventory, you get the inventory, if you want to send it out as samples, if you want to sell it to wholesale, you want to sell it direct-to-consumer, you want to sell it at a discount, whatever. That’s, that’s up to the business owner. And all we require is that we get paid back the the consignment profit, which is, you know, a small increase on the cost of goods.
Joe Valley 10:39
When it comes to Amazon business owners, you know, eventually the mysterious Amazon machine will offer them lending. There’s no guarantee on how much it’s going to be or when it’s going to show up and so on and so forth. Can you explain the differences in terms of the costs and the benefits of working with Kickfurther versus waiting for that Amazon lending to come through if somebody’s running an FBA business?
Sean De Clercq 11:05
Yeah, sure. So probably the key difference is that Amazon lending, as far as I know, is based off of your Amazon traffic. So if you’re selling through the Amazon Marketplace, you’re selling through, you know, Fulfillment by Amazon, you have your inventory stored there, right? They’re looking at that data, right? The Amazon Marketplace data, the Fulfillment by Amazon data. And what that means is if you’ve got 30% of your distribution going to Amazon, but 70% is going to wholesale, or to other, you know, distribution channels, Amazon is often not enough, they don’t provide enough finance to cover all of the inventory needs for these product businesses that we work with. And so what we find is that Amazon capital typically has pretty good rates, but it’s restrictive and how much they offer and it and they don’t cover enough distribution channels for product businesses.
Joe Valley 11:58
Okay, and you said, Amazon capital and talked about the cost, how is the Kickfurther cost to the consumer product business owner? How does that compare to some of the other lending services that are out there, whether it’s Amazon or cabbage or somebody’s credit card, where they’re funding inventory? And I’ve seen I’ve seen people do that a lot. How the costs compared to other options? And
Sean De Clercq 12:25
yeah, so it depends on the option, right? So what we saw, I’ll tell you q1, on decks, you know, they were public in q1 of 2019. And so I know that their dollar weighted average was about 48.6%. annualized, which is relatively expensive with their origination fees, and, and the daily debit and all of that, that comes out of it. Right. So that’s in their q1 2019 data. Anybody else can look that up.
Joe Valley 12:48
We’re saying if somebody buys a dollar’s worth of inventory, it’s costing them $1.48?
Sean De Clercq 12:56
Yeah, so the way it works is that you get in a really aggressive payment schedule. So normally, what’s happening is you’re paying about, you know, let’s say 15%, in in four months, right? And then when you compound that out to a year, it ends up being 45%.
Joe Valley 13:09
I say, okay, okay. Let’s, and that’s, that’s, that was one of the competitors that you’re talking about. Right?
Sean De Clercq 13:15
Exactly. And so that’s relatively expensive. What we’ll see with Kickfurther is, we’ll come in at about a third of what a business’s current costs are, right? So that’s like on the high end, but wherever businesses, we like, we typically come to meet them. And what we say to our business owners is, hey, come to Kickfurther, make your first deal competitive with whatever your current financing is, whatever it is, wherever you’re getting it, right, we’ll meet your cost on your first deal. And every single deal thereafter, it’ll get better and better and better for you. Right. And so that’s, that’s the promise we make to business owners. And if we can’t win, right, and if our deal is worse than then go somewhere else, like, I think that we were willing to compete and willing to win.
Joe Valley 13:57
How many times does the average Kickfurther client come back? And raise funds again? And again?
Sean De Clercq 14:04
Yeah, so we we’ve been in a significant growth curve. And even with all the new companies, we’ve been onboarding, we have an average of four deals per business. And our deal length is 5.1 months long, on average. So you’re looking at, you know, on average, our businesses are with us for at least two years, almost. Right. And, and like I said, we’ve been in a growth curve. So we’ve added 100 companies in the last year that haven’t had the time to even do that many deals, you know,
Joe Valley 14:31
yeah, four times coming back four times is an indication. So the lifetime value of a customer or lifetime of customers is two years. What was the 5.1 months, that’s how often they come back for more inventory funding.
Sean De Clercq 14:44
On average, it’s the typical length of a consignment opportunity. So you could think about that as how long it usually takes one of our business owners to turn over the inventory that we’re funding.
Joe Valley 14:54
Okay. Let me just clarify the consignment because typically consignment is it’s a it’s a funny term, that I’ve sold 120 businesses or so. And I don’t think we’ve ever seen an inventory on consignment situation that wasn’t complex. In this case, again, though, the business owner has possession of the inventory. And when they sell it, they’re simply paying you a little extra on what they sold it for. Correct?
Sean De Clercq 15:20
Yeah, exactly. So it’s actually I would even make it more flexible that whenever the inventory is consumed by whatever means that the business owner decides right, but that they want to give it away samples, ship it to brought buyers, you know, whatever it is, that’s when the consignment contract is triggered. So they get to distribute, dispose of their inventory, however they think is appropriate.
Joe Valley 15:38
Okay, let’s talk about terms because everybody sitting there has been waiting and listening, man, wait a few minutes ask, what are the repayment terms? length of the, you know, the repayment of the inventory? And or the cost of the inventory in this situation? Does it simply matter? How, I guess I’m going to answer this myself. It’s all about how quickly their inventory turns. I assume that right?
Sean De Clercq 16:01
Yeah. So the number one thing, it’s impossible, really, for me to answer and give you like a number, right? Because each of these businesses is so different, right? They’ve got such different attributes. So I can’t give you a number.
Joe Valley 16:13
I badgered him, I think I answered it myself. It’s they’re getting, you’re getting paid. I mean, if somebody takes nine months to sell through all that inventory, that’s the term of the loan, essentially, that you’re giving them, if they turn it in two months, it’s, that’s what that’s when you’re getting paid the investors getting paid. And that’s when they’re paying you back.
Sean De Clercq 16:31
So, exactly. So we asked the business owners to provide an estimate of how long they expect the inventory to sell through. And then that’s kind of what we, we look at their data, their distribution data. And that’s kind of what we use to set an expected selling time.
Joe Valley 16:45
Okay, I just want for those listening that haven’t gone to the website yet, I just want to read a couple of things I’m seeing on the website, which is fascinating, because I want everybody to understand that you can use Kickfurther for a ton of different types of businesses. And these are on your website. So So Mike can read them. But Evolution Salt company raised $210,000, four days ago in 11 minutes, stunning numbers, and I’m sure it takes time to set that up. I want to talk about that in a couple of minutes. Then there’s a unity laundry Systems Corporation that raised almost $60,000 a week ago in two minutes. Brute Force, a Kickfurther co op training program raised $554,000. In one week. I’ve had people on the podcast, we’ve done quiet giant episode series on people that had a business that took off and went out and raised $100,000 in a week through cabbage and applying for five different credit cards all on the same day so that the different lenders didn’t see what the others were doing in terms of credit checks. This seems honestly, like such a better option. So thank you for creating it, because I think it is a tremendous tool that people can use. I’ve got a somebody that was on the podcast just three or four weeks ago, I talked to him, he’s raising a couple of million dollars for more inventory purchases on new skews and expanding his 3PL or his own fulfillment center. Of course, we couldn’t raise money for him for the fulfillment center, I assume. But can people use Kickfurther on new SKUs, versus existing SKUs to raise capital for inventory? So I’ve got Yeah, you know, I’m doing $5 million a year in revenue, and I’ve got 20 SKUs. I’m going to launch SKU number 21. Instead of my own funds, I want to use the Kickfurther funds. Can I do that?
Sean De Clercq 18:42
Yeah. So I mean, this is where I would say we can, we can make sure that you have the funding for that. Right, our preference would be to fund your top selling SKU, right. So you get your cash from that inventory that you don’t need to spend on that, right, we funded the top selling SKU, and then you can use your cash to do product development underneath you. Okay, that’s the way we would prefer to operate.
Joe Valley 19:02
And it honestly, as we talked about, it’s logical, because Kickfurther is going to get there, you know, the investors are going to get paid back sooner. And then you can go back and as the e-commerce business owner can’t go back and raise more funds again. I like it. I like the logic of it. So thank you for that allowing me to ask that dumb question. Let’s let’s talk about the size of monies that people raise. Because as I look at your side, there’s 210,000 34,000 59,000, little over half a million. And it says, you know, Ray six days ago and 38 seconds, first talk about the size, the average size that people raise, if there is one or the highs and lows, and then what kind of prep work goes into creating the Kickfurther campaign that actually funds something in 11 minutes, because I’m sure it’s takes more than 11 minutes to put it together.
Sean De Clercq 19:55
Yeah, absolutely. Um, so the, you know, in terms of campaigns, We actually don’t have a minimum, what we do is we have a minimum fee. So we charge our minimum fee of $600. That kind of works out to where, you know, if you’re doing a deal under $20,000, it ends up being kind of like expensive, right for the business owners. So that’s what you’re gonna see is about 20 K is like the smallest deals you’ll rarely see on the platform. And, you know, we’re happy to support entrepreneurs at that level, right? Obviously, we’re not making a huge amount of revenue there. It’s just about as much work to put together a $20,000 deal as a $500,000. deal, right? Yeah. But I also think that those are the entrepreneurs that needs support the most. And so we’re very happy to remain relatively flexible. And over the years, we’ve created some amazing relationships with excellent entrepreneurs by coming in early supporting them when they needed it, and then they just stick around, you know, so. So that’s something that we want to keep going. So minimum is 20K, the largest we’ve ever done was $663,000. That was funded in I believe, 11 minutes about three weeks ago. And we have a current record breaker on the site right now, we’ll see if we can make it at 1.1 5 million. So that would be a 500 tag increase over our last biggest deal. So we’ll see how that goes. In terms of the amount of time for setup it is, it takes more time you’re on your very first deal, every deal thereafter is easier and easier. And the reason for that is because like I said, we want information share. So we get plugged in with, with your business where you are, whether it’s at a 3PL with your manufacturer, with your free port or so we’re looking to, to establish the same relationships to build those communication channels. That’s the hardest part is is building those, making those connections with the various service providers that a business owner works with. On the shortest timeframe, we’ve been able to get a business from first touch meeting us going into our onboarding program, launched on the website in 48 hours. So that’s a guy that’s super on the ball. He had his suppliers were domestic they were able to respond, you know, in the same timezone. Right. So that was super easy. On average, it takes a little bit longer, let’s say about, let’s say 10 business days, right, about two weeks. And it’s typically based on the business’s needs, right, so they get to a certain point, they have an understanding of what they’ll qualify for on that business platform. And then they wait to finalize their application, you know, until they’re ready to launch, right, and they need the finance, they need the funds.
Joe Valley 22:34
Okay, so if somebody’s trying to plan ahead for inventory purchases and needs, they should do a minimum of two weeks it sounds like but maybe back it up another couple of weeks just for education purposes, studying the site learning getting prepared.
Sean De Clercq 22:49
Yeah, yeah, absolutely. And as we continue, you know, I would say, as you head into the major inventory funding seasons, it’s a better it’s a, it’s an advantage to get there early, right. So it’s like we see a huge amount of volume coming through, it’ll start dropping off in the next few weeks, as we head into the selling season. But this is we just came out of the biggest inventory finance, you know, period of the year. And so in that time, it’s it’s best to act quickly to make sure that you can get what you need.
Joe Valley 23:14
Gotcha. Okay, let’s shift to the third part of this. First, we’ve covered the $250,000 in finance free $250,000 that you guys are giving away again, folks, the deadline for that is October 31. So get to the Kickfurther website, check it out, do the search and apply. Second, we’ve talked about how consumer product brands, not just ecommerce business owners, but consumer product brands can raise funds, I think it’s in a simple but incredibly ingenious model. So thank you for creating it. And congratulations. Third, look, we’re all investors in life in some way, shape, or form. We own a car, we own stocks, we own a business. And a lot of people want to get involved in e-commerce and owning an e-commerce business, but can’t quite find the right one. This seems like a really good fit where they can invest in funding inventory purchases for e-commerce business owners. How involved do they need to be in terms of vetting? Or do you do all of that? And just investing 100 200 1000 2000 $5,000? And what kind of return on investment? Am I getting? A lot of questions?
Sean De Clercq 24:32
Yeah, so there’s a there’s a few there. So how involved do they need to be? What we have is, you know, typically, the way we talk about that is the more involved you are the more rewarding it’ll be right. So if you want to interact with the business owners, we have multiple ways that and channels that you can talk to the business owners. I think that the education component learning about e-commerce, you know, interacting with these entrepreneurs is a very valuable piece of what we offer. He Kickfurther to your point about people that want to invest, but don’t know how to get started. This is a great way to get your fingers into a bunch of little industries and kind of see if there’s one that that is a fit. But, you know, that’s that’s what I would say is that it’s a if you’re more involved, it’s more rewarding as a user, I think, but you know, that there’s no, there’s no requirement that you, you know, go visit the business’s store, you don’t have to take delivery, you don’t have to purchase their products, right.
Joe Valley 25:35
So it really is all I want to do is sit at home and invest some money and get a good return on my investment. Is that too simplified? Or is that what a lot of your, you know, investors experience?
Sean De Clercq 25:48
Yeah, I would say that that is absolutely one way that you can participate on the platform.
Joe Valley 25:52
And what is the average investment that people are making when they’re an investor? Or is that what you call them? clients? investors? What do you call them?
Sean De Clercq 26:00
We call them inventory funders. So there’s funding inventory, then.
Joe Valley 26:03
So what’s the buyers? Okay, inventory investors or buyers, funders, what’s the average amount that they’re investing?
Sean De Clercq 26:13
So it’s, what we find is that our users pick a level of comfort. And that’s where they are, right? So we’ve got users that are hundred dollar users, they’ll buy as close to $100 as they can. We’ve got users that are $500 users. And then we’ve got what I call the five percenters, which are we limit all of our users to buy no more than 5% of the deal in the first 24 hours. And then the five percenters are the guys where if they like a deal, they’re taking down 5% doesn’t matter what the ticket sizes, so you’ll see transactions come in of like $30,000 sometimes, which is pretty crazy.
Joe Valley 26:46
Okay, so I can invest $30,000, occasionally, what kind of return investment Am I gonna get?
Sean De Clercq 26:53
You are looking at, depending on portfolio month, anywhere between 11 to 14%. It’s pretty solid and annualized,
Joe Valley 27:02
Annualized, that’s okay. And how do I get my money back?
Sean De Clercq 27:08
Through a CH so you, you take your funds we put it into we turn your capital into physical goods, that those physical goods are placed on consignment with the business, they pay, they sell it, we we know whether they’re selling the inventory, we draw the funds through a ch, and then we distributed pro rata. So if you bought $1,000, versus somebody that bought $100, right, you’re gonna get back 10 times the amount of the payout? Sure, sure.
Joe Valley 27:38
On your website, and on the intro that I’ve read, it looks like you’ve got a 99% success rate in terms of getting things funded. What about the getting the money back as an investor? What kind of risk is associated with it? Of all the deals you’ve ever funded? How many, you know, investors didn’t get their their money back and things of that nature?
Sean De Clercq 28:02
Yeah, great question. So we have a 4% cancellation rate. So our cancellation rate is the number of inventories that we fund that are not successfully distributed. And so the consignment contract is cancelled. And we call the inventory back. And at that point, you one of the buyers, one of the thunders can choose to take delivery of the inventory that you’ve funded, right? So if you’ve funded, you know, 1000 sweaters, right? And then half of themselves, you might get an email from tick for that says, hey, do you want to take delivery of 500 sweaters? Right? We also offer a liquidation option. You know, you can imagine that there’s a lot of people that don’t want a pile of sweaters to arrive at their house. Yeah. And so we can provide liquidation but you know, liquidation goes the way you would expect liquidation to go. So it’s not a that’s generally not a great outcome, right. But that happens about 4% of the time, right? So one out of 25 deals, which we actually were pretty happy with, I’m sure in your experience with product entrepreneurs, right? Like, the the hit rate on inventory is not that high. So we think that we do a really good job on our selection. And even in the case where the 4% get cancelled, we normally get about 30% of the payments, come back prior to cancellation. So we get about 30% of the deal gets paid out. And then there’s that little bit of liquidation. So we’re actually looking at all in about a 2.2% cancellation loss rate with a 4% cancellation rate.
Joe Valley 29:25
Just spinning that and explaining it from layman terms. So essentially, I’m going to make an investment have roughly a 97% success rate in terms of my investment, and I’m going to be earning 10 or 11% annualized return on my investment.
Sean De Clercq 29:42
Loss adjusted. Yeah, exactly. So that 10 that that 11% includes those cancellation deals. And then the last thing I’ll say, Joe is, you know, you’ve been a product entrepreneur, right, the one thing that all entrepreneurs are is optimistic. So we have a 4% cancellation rate. We also have an 8% You know, slow to pay rate, which means they’re outside the terms of how quickly they thought they could sell through the inventory. But they’re still in good standing, they’re communicating. And they’re providing the payouts for the inventory that’s sold as it sells, right. And those are deals that will take a little bit longer to complete. Often, those business owners offer a bonus payout, because they recognize that by taking longer, they’ve created some, you know, additional obligation, and so they’re happy to meet their funders, and they want to do more business with us. So that happens a little bit as well. And I would say, you know, what we look for is for businesses that are communicating, and for businesses that continue to meet their contractual obligations.
Joe Valley 30:39
Okay. And I’m just looking at the website for those listening and thinking, maybe I’ll invest some money through Kickfurther, there’s company details past co Ops, that they’ve done reviews all sorts of information on the businesses themselves. And I’m assuming Yeah, in addition, people can visit the websites, look at them, look at the LinkedIn profiles of the owners really figure out who it is they’re investing with before they wire funds or commit anything to Kickfurther and that inventory, perhaps.
Sean De Clercq 31:04
Yeah, yeah. And I think Joe, one of the things that we’ve done really well is thread the needle between providing a lot of information that that makes people that are buying the inventory, the funders feel good about who they’re entering into a transaction with, while also protecting the business owner, and making sure that there’s no key competitive information that’s getting out there in the public realm, that that might create a risk to their business. So I think we’ve really done a good job of threading that needle and meeting both parties where they need to be,
Joe Valley 31:37
well, I gotta tell you, what I think you’ve done a really good job at is like you care about my opinion, at the moment, we don’t know each other that well, but helping first, right, so you’ve created a business model, where you’re simply helping you are earning a return on your own investment, and you’re earning profits for your company. But you’re helping people with a definite need. When they’re growing, they need more money for inventory. And accessing capital, as a small business owner is incredibly hard. There are so few options. And then as an investor, people that want to buy an online business, finding that right business and having it in a situation where they can buy it with all cash, they’ve got to save an awful lot of money for that. The other option is SBA. And those are a small percentage of the deals, especially with, you know, what’s going on with a pandemic and PPP lending pushing things back and making things more complicated and COVID, bumps and all this other stuff. So I applaud you, I think it’s fantastic that you’re helping investors or people that want to invest in consumer product goods and inventories, or online businesses and those that need the capital. So kudos to you very impressed. It’s a need folks that is out there. You know what, if you’re listening, go to Kickfurther, check it out. And one more time on the URL for the $250,000 of, you know, finance free monies that you’re giving out. And I know we’re gonna put that in the show notes. But for people listening, I want to hear it one more time from you.
Sean De Clercq 33:06
All right, it’s grow.kickfurther.com/2020-giveaway.
Joe Valley 33:14
Simple, I think we’ll put that in the top.
Sean De Clercq 33:18
We’re gonna put a banner across our website too, because like, that’s where it should be. So to make it easy.
Joe Valley 33:22
Thank you, Sean. This is fantastic, very, very exciting information. Hopefully, lots of folks will enjoy getting some finance free money from you. And that investors will earn a good return on investment and you can help a lot of entrepreneurs raise money for inventory as well. Anything else that you think you want to share before we jump off?
Sean De Clercq 33:44
Joe, you’ve done a terrific job. Thank you. This was super exciting,
Joe Valley 33:47
And I appreciate your time.
Sean De Clercq 33:49
All right. Thank you so much. Have a great day.
today’s podcast was produced by Rise25 and the Quiet Light content team. If you have a suggestion for a future podcast subject or guest, email us at [email protected] Be sure to follow us on YouTube, Facebook, LinkedIn, Twitter and Instagram and subscribe to the show wherever you get your podcasts. Thanks for listening. We’ll see you next week.