We believe that great ideas should go far. It is our mission to provide the space for that to happen, says Karl Grech, Zaar crowdfunding platform manager.
Zaar is Malta’s first crowdfunding platform. With various international crowdfunding platforms available, why did you feel the need for a local one?
Not all international crowdfunding platforms are easily assessable. Some require a company to be registered in the country the platform is operating in and also a bank account in that country.
At Zaar, we will be facilitating the process by being more accessible, approachable and seeking to fulfil local needs. We aim to create an ecosystem that will support ideas that need access to finance. This has started by a partnership agreement with the Arts Council Malta and a support agreement with Grant Thornton.
Grant Thornton will be supporting Zaar.com.mt by providing training and toolkits for project initiators and start-ups, as well as one-to-one assistance and business advice to project initiators considering crowdfunding as an alternative source of finance for their innovative ideas or projects.
Arts Council Malta is partnering with Zaar.com.mt as part of the Arts Council Malta strategy that will be rolled out later in December. Together we aim to support and offer the best space for idea creatives and supporters to share their idea on the Zaar.com.mt platform and get great ideas funded.
How does Zaar work?
People or entities with ideas can visit our platform, register at a non-refundable fee of €250 and submit their idea through a complete online application process. Once the idea or project is accepted following some due diligence checks, the project owner will run a campaign for up to 60 days to raise donations towards their project. If the project reaches its target, Zaar will keep a five per cent commission on funds raised.
The platform will take an all-or-nothing approach and therefore there will be a mechanism in place for refunds should a project not meet its funding targets. The rationale behind our decision to adopt an all-or-nothing model is that if the start-up or project initiator did the correct budgeting and identified the need for a particular funding goal of, let’s say, €10,000 and they only reached €8,000, the likelihood is that they do not have sufficient funding to achieve the objective, and the project will consequently fail. In this case the funds will be returned back to the funders.
What are your main aims?
We aim to see 30 successfully funded projects through our platform within our first year of operation. In the process we will educate our audience on crowdfunding, promote entrepreneurship in Malta, and support local start-ups and entrepreneurs to raise finance for their projects and business ideas.
What projects do you aim to attract?
While our scope is to promote entrepreneurship in Malta and support local start-ups, the platform will accept ideas from all economic sectors, social enterprises and NGOs, encouraging projects which relate to innovation, technology, entertainment, design, arts and culture.
Start-ups and platforms also need the support of established businesses. Are you attracting such support?
Yes and we are considering some innovative approaches such as CrowdTuesday, usually a small to medium sized event, characterised by an informal and welcoming atmosphere. CrowdTuesday is a perfect occasion for anybody interested in crowdfunding to do some networking or to listen to an interesting presentation, while enjoying a drink after work. This will be done with through the support of the European Crowdfunding Network, an organisation we are members of. The objective of CrowdTuesday is to help building local crowdfunding ecosystem.
For investors and businesses supporting start-ups, what return on their investment can they expect?
We are launching a rewards-based crowdfunding platform where early products and services would search for groups of people who believe in them to donate funds to get an idea off the ground. It serves as the validation for the idea and presales of the future product, which many traditional sponsors ask for. This means that anyone giving a donation could receive a reward commensurate to the donation given.
You recently organised a series of training sessions on Zaar. What level of interest did you register?
The response we received from our training sessions as well as various presentations and engaging on social media have been very encouraging. We are planning another session in December and more sessions next year aimed to develop the skills any individual needs to prepare an action plan, budget and campaign.
What other forms of funding can start-ups attract?
We know that there is a gap in the market for enterprises that require financing in the region of €20,000 to €50,000. We are being conservative and guiding project owners planning a campaign on our platform to have stretched goals. This essentially refers to any financial target that is set above and beyond the original funding goal of their campaign. In this way project owners have the freedom of breaking up their funding requirements into a number of blocks with ever-higher perks in direct correlation to ever-higher crowdfunding goals being met.