iChuangye, a Kickstarter-like crowdfunding service previously known as 5ichuang, launched today its first-ever Demo Day to debut projects that are raising funds on the platform. TechNode got a chance to talk with its CEO Gu Bing, who prefers to name himself as chief service officer of the site, since he considers his works as offering services to entrepreneurs and venture capitalist in an effort to bridge their demands.
Since its establishment in December last year, iChuangye has selected nearly 100 projects from more than 1,000 applicants to launch fund-raising campaigns on iChuangye and two projects have finalized their campaigns on the platform, said Gu.
He added that they defined neither the industries nor the development stage the applicants should be in, but project creators have to submit detailed introductions of their companies for accreditation. Most of the companies are in the preliminary stage of their development and the fund-raising amounts of projects on iChuangye range between 5 million yuan (around US$800K) and 20 million yuan.
iChuangye adopts a mechanism which requires that individual investors only can follow institutional investors in investing in projects, but they can enjoy the same investment provisions as institutional investors. iChuangye adopts this model because it can protect the interests of individual investors to some extent, as Gu sees it, individual investors have their own insights in selecting projects with huge potentials, but their status does not grant them access to back-end data, which is accessible to institutional investors. More importantly, institutional investors will take over the tasks of project valuation, negotiation with the founding team of projects, as well as company operation after the funding.
For projects on iChuangye, financing from institutional investors have to account for 80% of the total investment, but the site has plans to gradually lower this percentage if capable individual investors, who can fulfill the responsibilities of company operation, financial monitoring etc., emerged, noted Gu.
According to him, the fund-raising process will be a optimal channel to attract die-hard consumers, since the ideal individual investors of a company are also the potential users of these startups.
As for its difference with other domestic crowdfunding platforms, Gu said iChuangye is an equity crowdfunding service, in which equity ownership in a business is given in exchange for investment capital, while DemoHour is transforming into a hardware presale platform, where users invest funding in a startup for its demoed product the platform.
An interesting project pitched at the event is Chelaille, an app which updates commuters about real-time information on bus locations in a bid to save users their precious time wasted in waiting for buses. The company has launched service in more than 20 cities countrywide and registered more than 1 million users.
image credit: iChuangye