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Working Paper

Crowdfunding in Emerging Markets : Lessons from East African Startups

MARKETING STRATEGIES NEW MARKET EMPLOYMENT BUSINESS INCUBATORS PARTY PROTOTYPE BUSINESS COMMUNITY INTERNATIONAL CAPITAL SELF-HELP MATERIALS SYSTEM REQUIREMENTS E-COMMERCE MICROFINANCE SECTOR PARTNER INDUSTRY VIDEO REGULATORY ENVIRONMENTS EXCHANGE STRATEGIES PAYMENT SYSTEM CONSUMER GOODS INFORMATION ENTREPRENEURS DEVELOPING COUNTRIES BANK ACCOUNT EQUITY FINANCING COMPANIES LOAN BUSINESS MODELS PROJECTS SPONSORS CREDIT CARD SEED MONEY INSTRUMENTS CREDIBILITY BUDGET CONVERSION COMMUNICATIONS INSTITUTIONS DATA TECHNICAL ASSISTANCE COMMERCE BUSINESS INCUBATOR LICENSE TARGETS BUSINESS NEEDS TRAINING MATERIALS EMERGING MARKET DEBT BUYERS MARKETING MARKETS FIRM RETURN INTERNATIONAL DEVELOPMENT LEGISLATION BUSINESS INFORMATION VENTURE CAPITAL ENTERPRISES DEBIT CARDS FINANCE GRANTS ADMINISTRATIVE COSTS INFRASTRUCTURE TRANSACTIONS USERS TECHNOLOGY EMERGING MARKETS EQUITY GRANT INVESTORS OPPORTUNITY COST FIRMS GOOD ONLINE NETWORKS BUSINESS OPERATIONS CAPITAL TRANSPARENCY BEST PRACTICES RESULTS ACCESS TO CAPITAL PARTIES FUTURE BANK CREDIT NETWORKS FINANCIAL INSTRUMENT CONTRACT SOCIAL NETWORKS EMAILS PRIVATE SECTOR OPPORTUNITY COSTS ONLINE TRANSACTIONS MARKET COMPANY SECURITIES PROFITABILITY RESULT MICROFINANCE EXPANSION BANK LOAN GOODS INVESTOR PEER-TO-PEER BUSINESS BUSINESSES INVESTMENT NETWORK PHONES ID HUMAN RESOURCES SHARE PARTNERS PERFORMANCE DONORS BANK CUSTOMERS PRIVATE INVESTORS INNOVATION SITES MOBILE PHONES PROFIT LENDING TECHNICAL SUPPORT CHECK INSTRUMENT CUSTOMERS PHOTO ENTREPRENEURSHIP ENTREPRENEUR PAYMENT SYSTEMS GOVERNMENTS INFORMATION GAP SEE GROWTH POTENTIAL TARGET FINANCING SOURCES GUARANTEE USES BANK EXPOSURE CASH FLOW PLUG-IN
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World Bank, Washington, DC
Africa | East Africa
2016-03-02T19:30:01Z | 2016-03-02T19:30:01Z | 2015

The purpose of this paper is to capture lessons learned from East African entrepreneurs who were some of crowdfunding’s first adopters. Their experiences can serve as a practical guide for entrepreneurs looking to more effectively utilize crowdfunding across all emerging markets. In order to gather this data, the World Bank conducted interviews with a number of East African technology entrepreneurs who ran crowdfunding campaigns, both successfully and unsuccessfully. The following paper offers six key lessons for entrepreneurs in Africa and other emerging markets as they consider when, why and how to launch a crowdfunding campaign: crowdfunding is much more difficult than most entrepreneurs anticipate and is not for everyone. Opportunity costs abound; business needs should dictate platform choice; payment systems impact platform choice; quality and quantity of contributor networks are key; entrepreneurs should tap into complementary resources and organizations to increase their likelihood of success; and crowdfunding can have non-monetary benefits.

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