Author Topic: Thoughts on Kickfurther - potential opportunity, or snake oil?  (Read 2499 times)

EfficiencyNerd

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Thoughts on Kickfurther - potential opportunity, or snake oil?
« on: December 09, 2016, 11:31:46 AM »
Hi there - I recently discovered Kickfurther, a crowd-sourced investing platform of sorts. I'm cautiously optimistic about it as a whole, and was ready to bite the bullet starting out with a real small investment, but I just started looking at the KFTalk sub-reddit and it's made me throw on the brakes.

I'm mostly looking for anyone who has tried out the platform and can share their personal results on returns, rate of failure, etc. Others who are interested can chime in as well.

As a whole I understand that it's a risk-ridden investment and has the obvious pitfall of 100% potential loss. I'm just wondering if anyone out there has been using the platform for a while and can share their experiences. I've read some good reviews of the operation, and some bad, but none from the MMM crowd that I'd be more apt to trust.

Thanks!

theolympians

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Re: Thoughts on Kickfurther - potential opportunity, or snake oil?
« Reply #1 on: December 13, 2016, 08:23:47 AM »
It's hard to say. Looking at the page, kickfurther is just a third party to connect "investors"with companies. That said, I don't know how much of a cut kickfurther will take, or how they will take it.

So, if the above is true, you are investing (they call it "partnering", which is a euphemism) with a company. You would have to checkl out the specific company to know if the company is a good investment.

This begs the question, why not buy the company's stock (if they have any)? Really check out the fees associated with it.

HAPPYINAZ

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Re: Thoughts on Kickfurther - potential opportunity, or snake oil?
« Reply #2 on: December 22, 2016, 07:58:50 AM »
I have invested in 15 companies through Kickfurther, starting about a year ago.  Five have been paid back completely, and the rest are still in payback phase.  The ones that have paid back have earned between 10-17% APY. 

The idea with Kickfurther is that your loan is secured by the inventory.  So if the person doesn't pay you back you end up with inventory that you can sell on your own to recoup cost.  Since all mine so far have paid back, I haven't had to test this step.  But I did have one company that initially had a problem with their inventory (the factory created faulty product) and it made me realize that although they say it's secured by inventory, if the inventory isn't actually created, then you have no collateral. 

Some of the companies have been great to work with (ie, great communication, payback exactly as promised) and others have been frustrating (ie, poor communication, late payments).

But overall, it's been enjoyable and a fun way to diversify.  Whether it's truly worth the risk is up to you.  If you can find companies that have already proven they can payback (some have used Kickfurther multiple times to expand their inventorY), then those are likely a more secure investment.   

fyi, I used Kickfurther to earn rewards and meet minimum spends on credit cards, so I am getting a higher return than the regular APY listed above.  Kickfurther tries to encourage people to fund with ACH rather than credit cards by offering an additional 1-2% on your money transferred to Kickfurther.  They are currently running a "holiday special" now for 2% on ACH transfers to Kickfurther.  You do lose 1.5% when you transfer money out of kickfurther, but you can reinvest earnings rather than withdrawing and just keep it earning there if you like.  And Kickfurther tells me they don't report any earning to the IRS.  I imagine that might change in the future though.     

 

« Last Edit: December 22, 2016, 08:04:36 AM by HAPPYINAZ »

EfficiencyNerd

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Re: Thoughts on Kickfurther - potential opportunity, or snake oil?
« Reply #3 on: December 22, 2016, 10:19:35 AM »
I have invested in 15 companies through Kickfurther, starting about a year ago.  Five have been paid back completely, and the rest are still in payback phase.  The ones that have paid back have earned between 10-17% APY. 

The idea with Kickfurther is that your loan is secured by the inventory.  So if the person doesn't pay you back you end up with inventory that you can sell on your own to recoup cost.  Since all mine so far have paid back, I haven't had to test this step.  But I did have one company that initially had a problem with their inventory (the factory created faulty product) and it made me realize that although they say it's secured by inventory, if the inventory isn't actually created, then you have no collateral. 

Some of the companies have been great to work with (ie, great communication, payback exactly as promised) and others have been frustrating (ie, poor communication, late payments).

But overall, it's been enjoyable and a fun way to diversify.  Whether it's truly worth the risk is up to you.  If you can find companies that have already proven they can payback (some have used Kickfurther multiple times to expand their inventorY), then those are likely a more secure investment.   

fyi, I used Kickfurther to earn rewards and meet minimum spends on credit cards, so I am getting a higher return than the regular APY listed above.  Kickfurther tries to encourage people to fund with ACH rather than credit cards by offering an additional 1-2% on your money transferred to Kickfurther.  They are currently running a "holiday special" now for 2% on ACH transfers to Kickfurther.  You do lose 1.5% when you transfer money out of kickfurther, but you can reinvest earnings rather than withdrawing and just keep it earning there if you like.  And Kickfurther tells me they don't report any earning to the IRS.  I imagine that might change in the future though.     

Interesting, thanks for your input. I've decided to throw a little money into it, and really be specific about the companies I want to support. I'll definitely look at if they've done previous co-ops before, but I've also heard of some doing small runs initially and paying back early in order to get a better rate, then having trouble paying back a huge second co-op. Just another thing to consider.

I'll also probably take into account whether or not I believe in the products. In theory, with the whole KF store option, it could become a lucrative side-gig of sorts getting both a commission and the return on investment. It's only an additional 5% commission, but it's 5% on the retail price, so depending on the markup that could be an additional 10% return or more if you happen to sell the products to someone through your store, and you don't have to wait for the co-op itself to finish. In order for that to really work well though, I think KF needs to better guarantee that the money you're putting in is actually going directly to manufacture those products. I've seen some companies actually say outright that they plan to use the money for something else.

Happyinaz, since you've been at this for a while now - when a co-op is first being funded, is there any way that you know of to tell if a co-op's items will be available for a buyer to sell in their own store? From what I understand, I don't think all co-ops have to let buyers sell their items on the KF store, but I don't know how to determine that from the co-op page.

I did also notice that they're doing a 2% Holiday special for ACH... I actually have a card that gives me universally 2% back, so I used that for my initial funding. I definitely considered for a second transferring money back and forth to slowly gain 0.5% (2% extra in, 1.5% taken on the way out)... but I figured they'd catch on soon enough lol.

HAPPYINAZ

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Re: Thoughts on Kickfurther - potential opportunity, or snake oil?
« Reply #4 on: December 22, 2016, 10:53:45 AM »
Sorry, I haven't really been interested in selling the item in my KF store.  So I can't tell you how to tell the difference between offers that allow it or don't. 

And yes, you definitely need to consider the size of the loan for the first offer vs second offer on companies that do multiple loans.

ChpBstrd

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Re: Thoughts on Kickfurther - potential opportunity, or snake oil?
« Reply #5 on: December 22, 2016, 01:34:21 PM »
The alternative to this investment would be to buy junk bonds from lending companies / payday lenders. Their APY is close to your expectations, their creditworthiness is equal or greater, and in the event of bankruptcy, you'll likely end up with $0.40 on the dollar rather than a shipping container of stuffed animals or something.

EfficiencyNerd

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Re: Thoughts on Kickfurther - potential opportunity, or snake oil?
« Reply #6 on: December 22, 2016, 03:14:17 PM »
The alternative to this investment would be to buy junk bonds from lending companies / payday lenders. Their APY is close to your expectations, their creditworthiness is equal or greater, and in the event of bankruptcy, you'll likely end up with $0.40 on the dollar rather than a shipping container of stuffed animals or something.
Haha, I suppose that's true, although much less "fun" in my opinion. While in general, I'm a fan of boring ol' ETF index funds and that's where the vast majority of my investments are, I thought Kickfurther looked interesting as a fun investment. Right now I'm just checking it out with significantly less than 1% of my net worth.

For me personally, I only plan to invest in products I'd actually support. For example, the portable solar panel company currently about to go open for funding - now THAT is a cool product, and definitely something I could see myself buying and using (for example, on backpacking trips or the like). Versus a company a few days ago that was looking for funding for ultra-expensive perfume... I don't care how good your company or offer is, I likely wouldn't support something like that because I think the product is likely a waste of money and contributing significantly to consumer debt.

Perhaps I could lose out on some good investments by including this in my selection criteria, but this is just play money and I highly doubt it will ever be any substantial part of my investment strategy. I see your point that junk bonds would be a good alternative from an investment standpoint.

Maybe the way I should rationalize it - and actually one of the reasons I was initially interested - is the ability to support cool products I like, in a Kickstater sort of way. Except instead of getting the products themselves, I hopefully get a return on the investment.

HAPPYINAZ

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Re: Thoughts on Kickfurther - potential opportunity, or snake oil?
« Reply #7 on: December 22, 2016, 04:54:15 PM »
I am the same way....I only support companies with interesting products that I would like to buy...and yes, it's like kickstarter in that way.  Like you, i can't stand the perfume companies or clothing companies.

here is one I supported and like: http://www.brewjacket.com/

My husband is a homebrewer and keeping his stuff at a constant temp in our house is a challenge.  In the summer he has to put wet towels over his jugs to keep a cool enough temp for his yeast to do their work.  If we go out to do fieldwork for a few days, he has to carry his fermenters up to our neighbor's house to keep them cool enough.  We know several home brewers that would buy this product, so if they don't pay me back, I will be happy to get the product.  The same is true for a coffee roaster and a wine and cheese maker that I supported :)   There was a good art supply company that unfortunately pulled it's offer at the last minute.  I think they found cheaper source of funding. 

if you ever see Kinderlift asking for funding, you should strongly consider it.  They are making a great product that helps kids on ski slopes as well as elderly people that need to be moved.  and they were great to work with....excellent communication and paid off on-time.  http://kinderlift.com/

You will enjoy it this!  Of course you have to be willing to accept loss, if it should occur.     
« Last Edit: December 22, 2016, 05:43:21 PM by HAPPYINAZ »

HAPPYINAZ

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Re: Thoughts on Kickfurther - potential opportunity, or snake oil?
« Reply #8 on: December 22, 2016, 05:04:21 PM »
I hadn't seen the solar panel company offer yet....thanks for mentioning it.  It looks pretty good with over half million in sales this year.  They have lots of good reviews on Amazon for that solar panel and other products they make.  And potential to earn 11% over 6 months....nice!

« Last Edit: December 22, 2016, 05:15:53 PM by HAPPYINAZ »

EfficiencyNerd

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Re: Thoughts on Kickfurther - potential opportunity, or snake oil?
« Reply #9 on: December 22, 2016, 07:28:11 PM »
I just looked into both brewjacket and kinderlift - they look like pretty cool companies/products!

Perhaps at some point it would be worth setting up a thread on here with referrals for KF companies. That would be awesome, particularly for companies seeking repeat coops. At this point though it doesn't look like there's enough Mustachians interested however.