I saw this question on BGLH; I thought it was a pretty decent topic that needed to be explored – and I will tell you why. Crowd Funding, or “Go Fund Me” campaigns are now one of the most popular ways businesses of all types approach declining cash flows and debt that can pretty much cripple any organisation.
In the natural hair world, we have been seeing a few campaigns and on BHI, we get emails about a variety of products that are being launched, which need support. In many cases these campaigns are pretty successful, for example the CWK Straight Plates campaign that went way over the amount that was needed, in comparison to other campaigns like AfroVeda, who desperately needed money but were not so successful.
This is what AfroVeda said in their campaign:
“My name is Mala Rhodes. I am the owner of AfroVeda Hair Products in Los Angeles, CA, and I am here to ask for your help. I’ve been active in the natural hair care community for over a decade and specifically in the natural haircare business for the past 6 years.
It has been quite an intense labor of love, and I’m grateful to have found my calling. But in the 6 years that AfroVeda has been open, things have never looked so bleak as they do right now.
Business has been devastatingly slow for the past 6 months of 2014 since moving from Dallas to Los Angeles in February, causing tremendous shipping delays that I have not yet been able to overcome. A perfect storm of bad luck, bad economy, divorce, and yes, bad decisions have left the company on a terrible financial footing.
I agree with many; the GoFundMe campain by AfroVeda was pretty bold, but probably not the best move. My opinion is that a product that solves a problem or improves something we are already doing will ultimately do well. However, if you are just blatantly looking for cash to fulfill orders, or just for everyday expenses, you might not get very far.