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February 2017

Analysis of Two Years of Investing on Kickfurther

By | Universe | No Comments
I originally wrote this as a review of Kickfurther for the site, Trustpilot. I’m sharing here for posterity’s sake. Kickfurther is a crowdsourced, inventory-backed investment marketplace. Non-accredited investors can put money into co-ops to support small businesses who need cash to order, produce, or manufacture products for their business. 
After reading all of the mixed reviews here, it’s time for someone to step up and share actual numbers, preferably from a depth of experience across multiple consignments. Being a former finance guy, a lifelong spreadsheet jockey, and an investor on Kickfurther since 2015, I suppose that falls on me.
I stepped into Kickfurther with the idea of taking a portfolio approach. I knew that some deals would go better than others, and so set aside money in my budget to begin investing as broadly on the platform as possible. One of the early mistakes I made was tying up too much capital in any one consignment. After that, I committed to invest smaller amounts, preferably around $100, in multiple campaigns.
I have invested in 17 consignments total. Five in 2015, ten in 2016, and two so far in 2017. What follows is my annual report.

2015

In 2015, I invested $850 which returned $917 for a 7.9% return. The APR’s on individual investments varied from 27.9% to 6.6%. The weighted average APR across all five was 15.3%.
One investment was refunded in whole by Kickfurther after they discovered fraud by the consignee. On another consignment, Kickfurther took possession of the inventory, and I opted to receive one item of inventory as partial repayment. The value of that inventory (at cost) is included in these calculations.

2016

In 2016 I invested in 10 consignments, putting in a total of $948. When I am repaid on all ten consignments it will net an 11% return.

Three consignments have completed, returning $332 on $300 invested. The APR’s for these were: 12.9%, 17.8%, 65.5%. Or a weighted average APR of 32%.

Seven consignments are still outstanding. Two are significantly behind in repayment, but both are communicating and repaying, even small amounts, as quickly as they are able. Four have begun repayments. Of those, three are on track, and one came up short on their first payment. The final one is not scheduled to start repaying until May.
I have $837 in active investments from 2016 & 2017 combined, of which $215 has been repaid, leaving $622 in outstanding inventory.

Projections

Let’s assume four are delayed in 2016, that they are all delayed significantly (i.e., 540 days or more), and that the others deliver as promised. Even with delays, I’m looking at a 17.1% APR equivalent.

Analysis

The hardest part of this is the fear of losing everything you put into a consignment. This has yet to happen to me after 17 consignments, including two that did actually go belly-up.
By diversifying and being patient, investing in Kickfurther has been excellent.
I certainly can’t say I pick great consignments. But I can say I will continue to invest on Kickfurther, and continue to diversify my portfolio through numerous, small investments. I like beating the stock market and supporting good businesses with my money.

Spreadsheet & Disclaimer

Supporting documentation in a Google Sheet. This review is not investment advice. Investing in anything, including Kickfurther, is risky and you should evaluate the risks yourself before taking any action to invest.