Aussie crowdfunding platform OzCrowd has been instrumental in bringing young Queensland man Jordan Darney home after suffering a terrible accident in Prague. While OzCrowd is one of the more recent entrants into the local crowdfunding market, unlike some others, it offers a variety of funding models. This was a huge advantage to friends and family of Jordan when his insurance company refused to pay his medical expenses due to the fact he’d been drinking when he had his accident. The Sunshine Coast community rallied around Jordan and amazingly enough raised over A$30,000 to help pay expenses to bring him home.
The quick facts
OzCrowd is open to a range of crowdfunding projects, ranging from causes or social enterprises, to business projects, creative to entrepreneurial. OzCrowd operate both All or Nothing OR Keep All (Flexible Funding). Their administration fee is 2.9% and For All or Nothing campaigns the fee is charged only if the funding goal is met. Credit card fees charged by the payment provider are also passed on – 2.5% plus $0.30.
OzCrowd enables users to discover projects under Personal or Business Projects. Personal projects currently have categories of animals and pets; babies and family; charity; education and schools; holidays; medical; memorials; music and film; sports; technology and weddings. They also list a ‘catch-all’ category of other. Business projects have the categories of adult; entertainment; new business ideas; retails/shops and video games. They also list an ‘other’ category in the business section.
OzCrowd have entered what is now becoming an established crowdfunding market, but believe they have several points of difference to appeal. I spoke to Director Nick Karolidis to find out more about their platform.
Crowdfund it: What made you want to launch a crowdfunding platform?
Karolidis: We have been following the industry for quite a while, having pledged towards many projects and working in a number of other crowd-based online models. Personally, the decision to enter the crowdfunding industry was off the back of a number of years of exposure to the start-up industry as well as a background in the legal profession dealing with clients in both start-up mode and non-for-profits seeking funding. We were eager to develop an Australian crowdfunding website which would be a one-stop-shop for those seeking funding for personal, business or charitable purposes and provided service that Australian expect but find little of these days!
Crowdfund it: Isn’t Australia, for our population size, already well served by existing platforms?
Karolidis: Whilst we acknowledge that there are crowdfunding options for Australians with recent entry by the international giants, we identified a clear gap in the market which we are servicing.
Firstly, as our name suggests, we are 100% Australian owned and operated, exclusively for the benefit of Australian projects. Most of our clients are in love with our name and Aussie focus and it tends to fit either their business model and/or personal preferences. Separately, we noticed that most crowdfunding platforms are either US/UK focused, very picky with their application process, only cater to a particular segment of the market or a combination of the three. This is why subject to legality, OzCrowd allows all Australian personal causes or Australian businesses on our site.
The other key point of differentiation is the service we provide. Whilst our fees tend to be lower than most of the market, we provide personalised feedback and one-to-one support for campaigns. We contact all our clients to assist with campaign creation, marketing and general guidance. All campaign creators also receive the direct and/or mobile number for their OzCrowd personal campaign manager – which we feel really sets us apart and gives our clients the best chance of raising the funds they’re after.
Crowdfund it: You run both keep all and flexible funding. Why did you choose to run both types of funding?
Karolidis: As evidenced by the millions raised using both models – they both have advantages and are suited to different types of campaigns. Given we allow people to crowdfund for personal causes – such as medical expenses or weddings, flexible funding allows people to keep funds which will obviously help them along. Fixed funding is also advantageous for products or start-up businesses that need the goal amount to accomplish the project they are seeking funding for and also provide the rewards people are contributing towards. We discuss and guide our campaign contributors towards the model most suited based on our expertise in the industry.
Crowdfund it: With some projects you will donate up to five per cent towards a project. Can you explain how you select projects to support?
Karolidis: We have no fixed criteria in terms of supporting campaigns – similar to other corporates and organisations, we contribute towards campaigns we believe are worthy of the support, and at the end of the day it is quite subjective. We would love to fund all our projects but unfortunately, the practicalities of life mean we have a limited (but growing!) budget.
Crowdfund it: Social media validation is important when you decide to support a stranger’s crowdfunding project. I noticed that not all of your projects are currently linking – is this on the roadmap?
Karolidis: At the moment users can create an account by using Facebook to login or creating an account separately. Those that choose Facebook are “FB verified” and links are posted.
We will be implementing some changes in this space, but we believe the biggest validation and credibility a campaign can get is contribution and support from their friends, family and network. From our understanding, this support is what tends to give the public comfort about the validity of a project.
Crowdfund it: Can you tell us about the campaign on OzCrowd that has, to date, raised the most money?
Karolidis: We’ve had quite a few very successful campaigns since we launched in July 2014, the most successful has to be “Bring Jordan Home” which was a donation-based campaign and raised over $10,000 in 24 hours and over $33,500 in a week! “Bring Jordan Home” is a campaign that helped 21-year-old Jordan’s family pay for expensive medical bills and flights to bring him home after having an accident overseas and suffering serious injuries.
The campaign is a great example of the community coming together to support one another, and has been featured on channel 7, WIN and numerous newspapers both home and abroad. Other than funding, the campaign has helped bring the community together and educate many Australian’s about the limitations of travel insurance. Personally it’s great to be running a platform that helps causes such as Jordan’s and reading the messages from all his supporters to help him recover is very encouraging.
Crowdfund it: How do you think we can encourage innovation in Australia?
Karolidis: There are a number of key structural changes we can make to further innovation as well as keep it here post-establishment. Our tax system is likely the most significant, given the comparatively high tax rates we impose on start-up and technology-based companies, compared to countries which understand the importance of encouraging innovation. Our top tax rate presently sits at 49%, which is excessive and discourages entrepreneurs and innovators from basing their operations here particularly when selling out of a venture might incur a cost of almost half the value. Separately, given the global economy it is very easy to change your domicile to a jurisdiction that has encouraging tax rates and legal structures.
Legalising equity crowdfunding is also an obvious idea which will breathe life into ideas and innovation that otherwise would have limited chances of success under traditional funding sources.
Personally, I’d like to see more government action and funds in the tech start-up space, particularly given other industries have been taking a hit in recent times and the resulting increase in unemployment. Australia has a great opportunity to become a tech-hub with some changes in government policy and tax rates and this brings with it job numbers and standard-of-living increases across the board!
Crowdfund it: What do you hope is the future of crowdfunding in Australia for 2015 and beyond?
Karolidis: We hope and expect that the industry will continue to grow at a very rapid rate, as the Australian market become accustomed to the model and the associated efficiencies and opportunities crowdfunding provides. In particular, with the pending reforms to provide for equity crowding in 2015 Australia has a great opportunity to become a leader in the crowdfunding space. Together with the Crowdfunding Institute of Australia, OzCrowd will be advocating for changes which allow businesses to access this new funding model in an efficient way, whilst still providing for investor protections.
You can find out more about OzCrowd on their website, on their Facebook page, or by following them on Twitter.
Anna Maguire, January 2015
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