Sponsume lets projects get off the ground with Groupon-style group funding model

[UK] Sponsume is a new online platform to help individuals and organisations promote and crowd source the funding of their projects.

The site soft-launched this week and is the brainchild of Grégory Vincent, an ex-financial analyst and fund manager for M&G Investments, the investment branch of Prudential Plc. The London-based startup is currently bootstrapped with funding from ‘friends and family’.

At Sponsume’s heart is the ability to let entrepreneurs, artists, charities, inventors, or just about anybody, raise funds for their idea through the sale of project vouchers, which can – should the project go ahead – be redeemed for various rewards. These can be almost anything, except equity and intellectual property rights, with the contract existing between the user and project owner, not Sponsume itself.

So, for example, an artist might want to raise money for an exhibition of their work. Sponsume users, should they want to support the artist and see the exhibit go ahead, would purchase vouchers in advance that would later see them gain entry and/or get a print of the artist’s work. If the total funding needed isn’t raised before the deadline and the exhibition doesn’t go ahead, users get their money back (minus any PayPal fees, according to the site’s FAQs). In this aspect, it’s very close to the model that Groupon-style group buying sites employ.

Similarly, project owners are encouraged to make their ideas go viral by sharing a link to their Sponsume project via social networks such as Twitter, MySpace, and Facebook etc.

A project owner gets their own profile on Sponsume and can upload a promotional video. While the amount of funding that projects can try to raise can be anything between £200 to £50,000. Sponsume also insists on keeping a 12.5% deposit to discourage projects that don’t deliver on their voucher’s promise, which is then released at a later date.

Right now Sponsume is free for project owners to use but at a later stage the company plans on charging commission of around five percent of the total raised. Other revenue streams include interest earned on accounts, sponsored placements and partnering with video production companies.

The kind of projects that Sponsumer sees itself attracting include new businesses, new products, charity events, exhibitions, concerts, new albums, documentaries, films, sporting events, classes and conferences. Currently, only UK projects are being accepted so that Sponsumer can vet all project applications, although the company hopes to expand the offer to EU and US-based projects in the future.

In terms of competitors, there are a number of US-based players, such as Kickstarter and IndieGoGo. There’s also purely music industry offerings such as the likes of Sellaband, which hasn’t been without its troubles.