Startup Turns To Crowdfunding To Build Tech For Nonprofits
A local software start-up is kicking off a crowdfunding campaign with a goal of raising $75,000—and it is hoping to net another $3 million later this year through more traditional investments.
Gemican, Inc., which is based in Minneapolis and was founded by a Hmong couple from St. Paul, pulled together $300,000 in 2013 from friends and supporters in Minnesota’s Hmong community to get the business rolling.
The company is developing cloud-based software that is meant to provide one-stop IT business solutions to entrepreneurs, small companies, and nonprofit organizations—and it’s currently focused on creating custom software designed specifically for nonprofits.
Gemican announced its crowdfunding campaign, which appears on the website Fundable.com, this week. It has until April 14 to meet its $75,000 goal.
The company said that, should the fundraising campaign prove successful, it will invest the funds in the build-out of its software for nonprofits, many of which can’t afford to hire an IT department.
Gemican said its product is designed to provide a “single-point access” to “a suite of fully integrated business software applications.” The company claims its nonprofit offering is distinct from the competition in that it gives organizations access to applications that track program data, create professional reports and documents, develop grant proposals, and simplify compliance documentation, among other things—all in one program. Some of its out-of-the-box solutions are free, and clients can pay a monthly fee for customized offerings.
Gemican is describing its $75,000 crowdfunding campaign as “phase one.” Ultimately, it plans to raise a total of $250,000, the company wrote on its Fundable campaign page.
And it has its sights set significantly higher in the traditional investor community: The company said it’s planning “a $3 million capital appeal to investors this year.”
Of course, campaigns for investments, including those on crowdfunding sites, bring no guarantee that a startup will raise funds. As of Tuesday morning, Gemican had raised $425, or a mere 1 percent of its final goal. That leaves 83 days to pick up the balance.
Popular crowdfunding website Kickstarter says that campaigns on its platform have a 43.6 percent success rate, and most “successfully funded” projects raise less than $10,000.
But Minnesotans seem to be tapping into the trend. In fact, the state ranked third (behind New York and California) for the most Kickstarter-funded tech startups, according to one recent study of U.S. crowdfunding.
Minnesota restaurants are among those turning to crowdfunding. And technology startup SmartThings—which is technically headquartered in Washington, D.C., but was founded by a Twin Cities native and employs the bulk of its engineers in Minneapolis—has been held up as a major success story, having raised $12.5 million on Kickstarter. (SmartThings' technology was also recently noted in the New York Times.)