Sylvia, if you feel that this is a viable undertaking, then by all means, go for it!
While the idea of microfinance isn’t new, taking “repayment” or “financial returns” out of the equation of early-stage funding, certainly is. So, if I got that right, you will be functioning as a matchmaker between micro entrepreneurs and people, who simply need a channel that would enable them to give their money away. Frankly, I think you will be facing some stiff competition on that end J
Just take a look at the fundamentals of your service offering. Going with what you said in an earlier post, I’m assuming that your average donation is about $100 (just for the sake of the argument). So, in order to be able to fund a single financing request of $5,000, you will need 50 donors.
If you have only 100 micro entrepreneurs subscribed to your site with similar requests for donations, which will make you $4,900 in subscription fees, you will need a staggering 5,000 people who are willing to give away $100 each. Do you really think that this is a healthy ratio?
With that being said, I certainly agree with you that it’s time for fundamental changes in the field of small business finance; however, if you’re running a small business and can’t get $5,000 from banks, family, friends, or fools, don’t you think that this says something about the merits of your business and/or qualifications as a small business owner?
Again, I’m not saying that there’s no way you’ll get a few donations from people who empathize with entrepreneurs; I just very much doubt that you will be able to scale this into “a new funding option” for small businesses.
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