Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      World Bank set to back South Africa’s big energy grid roll-out

      20 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Sita hits back at critics, promises faster, automated procurement

      20 June 2025

      The transatlantic race to create the first television

      20 June 2025

      Listed: All the MVNOs in South Africa – 2025 edition

      19 June 2025
    • World

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » News » S Africans turn to crowdfunding sites

    S Africans turn to crowdfunding sites

    By Thalia Holmes21 October 2013
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    money-640

    Caitlin Clerk, 24, has porcelain-white skin, big grey-green eyes framed by long lashes and dark, flowing hair. She extends a slender, soft arm in greeting. Her voice has a melodic timbre to it. As she settles next to a piano and sight-sings tunes for an upcoming stage show, it’s easy to see she’s a performer.

    A few months ago, she was one of a sea of struggling entertainers in South Africa. A psychology and English graduate from the University of the Witwaters­rand, she decided two years ago to pursue her passion ­– a career on the stage.

    With Phantom of the Opera and Annie under her belt, Clerk was looking for meaningful things to add to her CV when she came across an advert for an audition for the New York Film Academy. Six South Africans would be chosen to participate in a four-week course at the world-renowned artistic training hub.

    “When I found out I had been accepted, I didn’t know how to react,” she said. “I never thought for a moment that would happen. Once I knew I was in, I couldn’t not go,” she said. But she needed R70 000 to do it.

    She petitioned “hundreds” of organisations for sponsorship, with no success. Eventually, a family friend suggested crowdfunding, something Clerk had never heard of. After Googling the concept, she came across startme.co.za, a local crowdfunding website with a similar business model to its American-based counterpart, Kickstarter.

    Last year alone, Kickstarter helped 18 000 businesses to raise US$320m.

    The concept is simple. The website gives entrepreneurs, artists and other project owners a platform to present their ideas and convince possible contributors of the worthiness of their cause.

    Donors can give amounts as small as R50. And project creators offer rewards for those who buy in, which grow in size as the contribution amount increases. In some cases, contributors make donations in exchange for the first versions of a new prototype or product.

    A plan to produce glow-in-the-dark plants advertised on Kickstarter proved wildly successful in the US, with 8 433 donors donating almost $500 000 in just 44 days, Time magazine reported.

    Contributors, it turns out, were rather excited about the glow-in-the-dark seeds being offered as tokens of thanks.

    Locally, the Ybike Evolve, a combination tricycle and balance bike aimed at helping children to develop their gross motor skills, raised R47 000 instead of its hoped-for R30 000 on a new local crowdfunding site, thundafund.com.

    Almost all of its contributors bought the final product at a discount as their reward.

    According to Ben Botes, one of the founders of StartMe, it’s a virtuous circle. Contributors create a market for the product or an audience for the artist.

    But, for the most part, contributors are “usually friends or family” of the person doing the project, Botes said.

    Clerk has found the same thing, although some of her largest contributions have come through second-tier connections.

    And, in many cases, the “rewards” offered to contributors are a token rather than a real incentive to donate.

    A R250 donation to Clerk’s cause will earn you a mention in her travel blog. R500 will get you a beaded ornament with your name left “somewhere special” in New York.

    In order for your project to be featured on StartMe, it must go through a simple vetting process.

    “We make sure the ideas being posted are real, that they are ethical and that they comply with legal requirements in the country,” Botes said.

    The project owner sets a time limit by which their funding goals must be met, usually 60, 90 or 120 days.

    Contributors are only required to pay if the funding goal is reached. If the goal is not met, the project owner gets nothing.

    “The idea is that, if that amount is not raised, then it is questionable whether the project will succeed,” Botes said. StartMe takes a 5% fee from those projects that reach their target. “It’s really a pay-on-success-based model,” he said.

    Since the company started in 2011, it has featured 125 projects. Of them, 15 have been successful. StartMe hopes to double its success rate next year and eventually see about a 30% rate.

    There are other crowdfunding models, such as the American Indiegogo, which allows project managers to keep whatever funds are raised, even if they miss their target.

    And then there’s the South African CrowdInvest, a site that offers investments in start-ups and, in some cases, shareholding.

    The website has more than 300 registered investors, who receive a 5% return after a month. Start-ups have 60 days in which to reach their goal. Investors only pay up if the target is achieved.

    Although these options spell hope for many, crowdfunding is not the solve-all some might believe it is. New York-based start-up specialist Ari Zoldan said, in fact, it is a “bad idea for a lot of start-ups”.

    “It lets you kid yourself,” he wrote on the business site inc.com. “Convincing real investors that you’ve got what it takes is your company’s first reality check. Crowdfunding can let you postpone reality but not indefinitely.”

    Besides that, it stops you from interacting with seasoned veterans who could give useful tips for your business, he said. “I would never recommend investing in a crowdfunded model. What does that tell you?”

    Both Clerk and Botes agree that those who see crowdfunding as a passive way to earn money will inevitably fail.

    “I think a lot of people make the mistake of thinking that crowdfunding is the easy way out. It’s not. It’s really, really difficult,” Clerk said. “Instead of convincing one big company to donate, you have to convince hundreds of people to believe in you.”

    Most of her time in the past three weeks has been spent phoning and e-mailing people she knows asking for help, blogging, tweeting and facebooking about her project.

    “I’ll ask people to share the message more than I ask them to donate,” she said. The result is that her project has moved towards its goal quicker than most others on the site.

    But putting herself on the line has been an emotional experience. “You don’t realise how much it takes to speak to people’s hearts and get them to invest in you.”  — (c) 2013 Mail & Guardian

    • Visit the Mail & Guardian Online, the smart news source


    Ben Botes Caitlin Clerk Indiegogo Kickstarter StartMe startme.co.za
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleTechnology the fly in Loeries’ ointment
    Next Article ZATS: Ep 280 – ‘The gadget boys’

    Related Posts

    New film chronicles the rise and fall of Commodore

    23 January 2018

    Past, present and future of crowdfunding

    3 August 2014

    Facebook’s Oculus deal is not all bad

    31 March 2014
    Company News

    Making IT happen: how Trade Link gears up to enable SA retail strategies

    20 June 2025

    Why parents choose CambriLearn for online education

    19 June 2025

    Disrupt first, ask questions later – the uncomfortable truth about incident response

    18 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.