Monday, March 15, 2010

South African crowdfunding website raises $100,000

In five days
raised $100,000 by mistake (prelaunch)

Dan Oshinsky’s article for local news channel KENS 5 captures perfectly what a great idea, and great success, this private South African initiative is. I’ve taken the liberty of reposting it in full here, since it doesn’t have a permalink of its own. Do drop by his dispatches from SxSW in Austin, however. It’s well worth a visit, and is an excellent example of high-quality live online reporting by a news organisation.

AUSTIN HILTON, 11:55 a.m. Saturday — Five days ago, Eve Dmochowska thought she was ready to launch Crowdfund, a site looking to pool the financial resources of the web to fund online startups in South Africa. Her hope was that in four months, she’d be able to find enough investors to raise 1 million South African rand (about $135,000).

So she emailed 10 friends with a link to the site, and asked them if they thought Crowdfund was ready.

But one of those friends misunderstood the email, and thinking that Crowdfund had launched, sent out a Tweet about it.

Five days later — without having sent out a single press release or having officially launched the site — Dmochowska’s raised over $100,000. Soon, Crowdfund will use that money to try to get a dozen or more online South African businesses off the ground.

That’s the strange thing about South by Southwest Interactive. Some people here are looking to build their own brand, to launch “the next big thing” in tech.

But then there’s this other group of speakers, talking to half-empty rooms about ideas that could actually change lives.

“We are now motivating people, who, before, just had ideas,” Dmochowska said. Instead, they’re now telling entrepreneurs: “You have more reason to succeed now than you ever had before.”

What the five-member panel spoke of Saturday was a broken model for venture capitalists in South Africa. It’s a country that does not have an infrastructure to support entrepreneurs, so Dmochowska emphasized that Crowdfund is there to close the gap. She hopes that the site will not just provide access to money but also will give South African startups access to mentors and corporate help.

“Being an entreprenueral geek isn’t exactly cool in South Africa,” said Heather Ford. She said they’ll use GeekRetreat — an annual Internet conference in South Africa that she created with fellow Crowdfund panelist Justin Spratt — to get potential entrepreneurs on board.

Spratt spoke of a zulu phrase — umuntu ngumuntu ngabantu — meaning, “a person is a person through other people.” He said that it’s that connection to the community, and a drive to break the business model in South Africa, that gives Crowdfund a chance to succeed.

“The crowd that has done this has done it against all odds,” he said.

Technovated’s Gareth Knight said that Crowdfund will also have a chance to build on the emerging pool of talent that is starting to migrate back to South Africa.

“I’m seeing the brain drain reversing,” said Technovated’s Gareth Knight, referring to the exodus of talented South Africans to more developed countries. “Those people are deciding to come home.”

For Dmochowska, Crowdfund has been a project a year in the making, and she said she’s thrilled with the initial payoff — even if it wasn’t expected.

“We almost got a million Rand without even trying,” she said. “It’s an indication of how desperately we needed this in South Africa.”
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