The Internet provides sellers with new ways to raise funds to grow their business. One is a type of financing called “working capital advance” made popular by Kabbage, which assesses risk by looking at sellers’ activity on ecommerce platforms, payment-processing accounts, shipping carrier accounts, and even social networking sites.
Another way to raise funds is through crowdfunding, made popular by sites like Kickstarter.
On Tuesday, Etsy announced it was getting into the crowdfunding space with the launch of a new pilot program called Fund on Etsy that lets buyers invest in seller businesses.
Etsy positions the new program as much more than a business endeavor, writing, “Fund on Etsy is not just about raising money. It’s about connecting people in a meaningful way, bringing to life the very human story of production and furthering Etsy’s support of the business lifecycle of shops.”
The pilot program is available only in the U.S. and will run from June 16 to August 15. The company explained:
Etsy has selected a limited group of sellers to launch campaigns during this period. The individual campaigns will last between 15 and 60 days and conclude on or before August 15. Only invited sellers will be able to launch campaigns during the pilot. If you’re interested in creating a Fund on Etsy campaign in the future, please let us know by visiting the landing page and hitting “I really like this idea.”
Etsy explains to would-be investors that if a campaign doesn’t reach its funding goal, all campaign orders are canceled and their credit cards will not be charged. And, it warns, “By funding a campaign, you are entering into a direct agreement with the seller. Etsy is not liable for any loss or damage that may occur with your use of Fund on Etsy.”
Etsy spokesperson Nikki Summer said, “More than 20 million buyers come to Etsy looking for unique, meaningful items and stories, and with Fund on Etsy, now they’ll be able to invest in Etsy sellers they love and also buy a unique product that wouldn’t have otherwise been created.”
You can find more information on the Fund on Etsy website.
