Fundable

Fundable

URL = http://www.fundable.org

"Fundable is a new service that lets groups of people pool money for various purposes in what are called “group actions." Similar to an online auction, a group action has its own page, describing how much money will be collected and what the money will do. No participant takes a risk: if the collection for a group action falls short of its target on deadline, all money is refunded. Fundable’s all-or-nothing approach to collecting money lets you participate in a group purchase or fundraiser without worrying about what other people will do. You will either get what you paid for or get your money back."

Profile

May 2007 profile from Open Business at http://www.openbusiness.cc/2007/05/20/the-emergent-field-of-p2p-finance/

"Fundable allows groups of people to pool funds to make purchases or raise money. Similar to online auctions, Fundable’s pages, called “group actions,” are created by people who use the service. Each group action gives a description of how much money needs to be collected and what it will do. Once enough pledges (not payments) have been collected, Fundable turns them into real payments and sends the total to the group action’s organizer.

Who: Louis Helm and John Pratt co-founded Fundable in 2005.

Group leaders: Group leaders may receive money they have collected either through their paypal account or (for a $10 flat fee) by cheque.

Community: Social transactions are at the heart of Fundable, and many users will be dealing exclusively from people drawn from their own social network. Typical transaction: The majority of the group actions tend to be fundraisers, such as sponsored walks or pleas for charity. There are also people doing things like recording albums, and promising a CD to investors in the style of Sellaband.

Fundable sets no limits on how many people a group leader expects to recruit, and if the group leader permits, people can pledge more than the contribution amount. The value of the average pledge has risen since the service launched. The first completed pledges were for amounts between $50 and $1000 — with most in the range of $200-500. Recently completed group actions have been for greater amounts: the typical action raises around $1000, and rarely less than $500. The smallest individual pledges are typically for $10 or $20.

Business model: Fundable acts as an escrow between groups of people and the person who collects their money. It is for-profit, and makes money by charging an 8.9 percent fee for its services. No fee is charged if a pledge expires without reaching its goal, and it is free to register and to set up a group action.

Establishing trust: Fundable allows group leaders with an established online auction reputation to display a link to their eBay rating on their group actions. In most cases, the weight of 20 or 25 waiting contributors creates considerable pressure for organisers to deliver on what they promise. However, as in eBay, people are expected to ask questions and verify the trustworthiness of the organizer before making a pledge.

Fundable holds pledges until the group action reaches its collection goal, and then collects payment. If a group action’s collection falls short of its target pledge amount on deadline, Fundable deletes the pledge and no money is collected. This lets users participate in a group purchase or fundraiser without worrying about what other people will do. No one pays until and unless everyone else makes a pledge. As a further measure to ensure trust in the system, Fundable reviews most group actions that seek over 40 contributors.

Performance: Fundable is still in its infancy, but there have been hundreds of successfully completed group actions, and the engagement and enthusiasm of users suggests great potential for growth.

Problems or limitations: If you are recruiting from your immediate social network, it is very hard to get more than 20-25 people involved in a group action. Collecting pledges from more people than this involves planning and effort, and if a group action seeks more than 40 participants, the organiser must have access to a large audience. This is a reflection of the difficulty of raising money within real-world social networks, an objective for which Fundable is nonetheless very helpful.

Where Fundable falls short is in providing series of feedback mechanisms between group actions and funders, and degrees of involvement between group leaders and contributors." (http://www.openbusiness.cc/2007/05/20/the-emergent-field-of-p2p-finance/)