Edit: As of December 2021 I would no longer recommend this platform. I got burned on a couple of investments that went bad and there's little incentive for the platform to go after a company that doesn't pay. The send it to collections and then remove it from their website so you only see the hundreds of successful deals, not the couple dozen that went to collections or never paid out at all. If you accept that the risk of default may be 5-10% and spread your investments across multiple deals it could still provide a decent return. Just beware of first time deals or things like apparel which are historically more likely to have problems.
Bottom Line Up Front: Invest in inventory for eCommerce/retail businesses with KickFurther and earn up to 20% annualized returns for 4-8 month investments.
Kickfurther is a platform that was created to pickup where Kickstarter leaves off. Growing companies need funding to purchase inventory for resale. If they're eCommerce businesses or relatively new they'll be unable to get funding from a bank and have to rely on high-interest loans (25%+ annual interest rates) from Amazon, Kabbage, or other providers. eCommerce is a cash-intensive business because you have to purchase the inventory, wait for it to be produced, wait for it to be shipped (if it's from China that can be 30+ days), get it into whatever distribution channel, sell it, and finally get your original cash back plus profit. Meanwhile, you've had to place another order or two so you don't run out of inventory waiting to get paid for the first production run to sell through. This process from first deposit to finally getting paid for the last product selling can take 6+ months. So if you have $50,000 in product you might double or triple your investment but before you even sell through that production run you need to order more which means you might need $150,000 in cash for that year, a significant portion of which is tied up in inventory - not leaving enough cash to fund further growth.
Kickfurther lets businesses crowdsource funding and they offer very attractive returns with relatively low risk. They've been operating for a few years and they've gotten down to a delinquency rate of about 1% by improving their vetting process. The requirements for businesses seeking funding include $250k+ in revenue, generally a personal guarantee, and they limit the amount of funding until the business has established a record of paying it back on time. Typically these businesses offer 5-10% returns for about an investment that might be 4-8 months, so 10-20% annualized. That's still cheaper than using a factoring service or loans from online lenders.
For legal purposes you are purchasing inventory on consignment, not investing directly in the company. When the company raising money sells that product, they pay you back with a pre-specified amount of profit. Each co-op funding is setup a little differently. The minimum investment might be $25 for a pack of products or it might be $1,000. For instance there is a beauty supply company that recently raised money for buying a hair removal product. The price for one package is $864.99. The profit is $81.69 per package for a return of 9.44% over an expected period of 10.5 months, or 10.78% annualized. A co-op I recently invested in had a price of $24.86 per pack with a profit of $2.53 for a return of 10.17% over an expected period of 6.2 months, or 19.68% annualized.
One thing to note is that the supply of investors outweighs the supply of companies raising money. So those that offer the best deal typically fund in a couple of hours, or sometimes in a couple of minutes if they've got a high return or a short payback period (i.e. 20% annualized or payback in 2-3 months instead of 6-10). Each deal opens at 5 PM EST but you can also reserve a spot beforehand on a limited number of deals.
A bonus is that you can use a credit card for funding the purchases so it's a great way to manufacture spending for earning credit card rewards.
I've invested about $3,000 so far in 8 deals and should get a profit of about $250 on those deals - most of which start paying out in January and will be completed a few months later. The average payback timeline for those deals is 5.1 months and my weighted average return is expected to be about 22% on an annualized basis. Also, there are usually several payback periods so you aren't waiting the whole time to get your money back. Usually the first payout is in a few months then every 2-4 weeks after that.
The worst case scenario is the company can't sell the product and you end up getting possession of it (very rare). Usually if something goes wrong (sales aren't as fast as anticipated, production delays, etc.) instead of getting paid back in 6 months it takes 9 and so that 20% return becomes 13%. In some cases the return will actually be higher because they sell through faster and payback quicker. You can browse through every single past deal to see the results
https://www.kickfurther.com/coops Update: The second deal I funded back in September just made the final payment.
"You funded $306.12 of inventory and just received your last payout for a total of $335.62. You earned $29.50 of profit in 5.1 months, an annualized 23%."