Mavencore is a web consultancy startup with the goal of introducing people in Kenya and to alternative financing options like crowdfunding, angel investing, venture capital, and grants. It is designed to let ordinary people invest in startups within their localities, which offer solutions for everyday problems. The website is already set up. What it requires is substantial marketing effort. Such marketing will help it reach people around the country who can present their proposals or those who can invest in the projects proposed.
The average Kenyan is hard working. Most earn a living from various small businesses that provide products and services that solve every day problems. However, access to capital, which can expand these businesses or lead to innovation, is limited. Some of the reasons for this include:
1. Most traditional financiers like banks do not consider running a small business as a source of income. Fintech solutions, which provide an alternative to banks, could have solved this problem, but they only focus on micro loans - usually at exorbitant interest rates.
2. People are not being familiar with the other forms of financing like Crowdfunding and Venture Capital. It's not uncommon to hear someone asking, "so how can I get this loan" after being told about Venture Capital.
MavenCORE is aiming to achieve three interrelated goals:
- To inform local entrepreneurs about venture capital, grants and crowdfunding
- To let local investors know they can fund local startups
- To provide a platform where the two groups can meet
We are capitalizing on cheap digital media platforms like WhatsApp, Email, YouTube and our Website to reach the targeted individuals. Apart from being cheap, some of the mediums such as YouTube and WhatsApp are very popular with people. It's a free service to guarantee accessibility for most of the people locked out from traditional forms of financing.
Why this Model Might Succeed
We developed the platform early this year (January 2019) and over the one year we have been engaging people, we have gained considerable insight on why venture capital, angel investing and crowdfunding for business is almost non- existent in Kenya and indeed most of Africa.
For example, issues like writing proposals and business plans are alien to most people.
Testing therefore helped us add features that will help the average user take a professionally approach when seeking funding for a project. For example, we have developed a simple proposal template and a scorecard to gauge the project. With these resources, we believe projects will attract local investment.
The website has already gained 300 members and 40 proposals which shows the idea is resonating with people. Projects have also received $13,630 worth of funding from direct local investments. With sufficient marketing, we will be able to reach the targeted membership of 10,000 users.
The Target Market
The concept targets any ordinary person who has an idea or project that can improve the lives of those around him or her. Unlike in other parts of the world, there are still many basic problems in African countries affecting almost every sector whether its education, nutrition, security, heath etc. The best approach to fix them is to let those affected find solutions – local solutions for local problems. The concept actually aims to boost the little that people are already doing in their respective areas. There is also great potential to find local investors considering how much money is lost every year when locals invest in ponzi schemes.
The Value to Members
The platform seeks to change the general perception people have that help can only come from society leaders or donors in foreign countries. By providing information on alternative sources of funding and publicizing provable success stories, we hope to shift the focus of members from looking outwards when seeking financial progress, to focusing on local solutions.
The platform also offers:
- Free guidance on how to pitch an idea to a prospective backer
- Paid proposal writing services
- Rating of all projects with a standardized scorecard helping investors identify opportunities
- Syndication of project proposals on social media
Reaching the Target Customer
We use a multipronged approach to reach the targeted users. Paying for PPC advertisements such as Google and Facebook ads help bring people to our website. On the website, a WhatsApp link allows visitors to initiate chat sessions with a representative immediately. Around 50% of all new visitors use this option, which gives us a chance for follow up without incurring additional costs since WhatsApp messaging is free. Fan gates and a voting feature also ensure that current members who submit proposals spread word further about our platform.
What's Different About Our Platform
Crowdfunding, Venture Capital and Angel investing are not new concepts and there are many platforms out there already offering these services. However, most do not resonate with an African setting.
Locally, crowdfunding is only relegated to unfortunate situations illness and death. Trying to crowdfund for a business venture is frowned at – people can't believe you want to get ahead on their dime. Our platform adopts pooled crowdfunding approach whereby the platform collects the funds, then distributes the money to projects that have proved to be deserving.
Venture Capital is considered something only available to IT projects such as App development. We'll train people to understand the option is available for any project that has potential to benefit the investors.
With the platform's goal being to make capital accessible, the main services are free. However, we still need to generate revenue for sustainable operations. We have indentified different revenue sources that can support the platform
- Selling Branded Merchandise to members
- Advertising products and services for businesses on our platform
- Listing professionals on our website and charging commission for the services they offer
- Charging commission for connecting investors to entrepreneurs