left corner left corner
China Daily Website

Crowd funding fueling creative projects in China

Updated: 2013-05-06 10:17
( Xinhua)

Zha Li, founding partner of venture capital (VC) funds "Istartvc" and "Dragonvest Partners" in Shanghai, regards crowd funding as a necessary alternative to existing forms of investing, such as private capital (PE) and VC.

"PE and VC will only go to projects with significant returns. But many creative projects are not supposed to develop into big businesses, and that's where crowd funding fits in," said Zha.

But there are worries about the potential risks that crowd funding faces. Some are concerned that a swindler could use the platforms to raise money for fabricated projects.

"Our team members review the projects very carefully before putting them online. Only about 10 percent of the projects we receive can be displayed on our website," said Zhang.

To avoid legal risks, Demohour prohibits project initiators from rewarding supporters in the form of cash or equity. It doesn't accept projects involving drugs, alcohol, cosmetics or real estate.

Demohour has received more than 6,200 creative projects since its establishment. About 700 projects have been listed online and 50 percent of them have successfully collected funding.

However, compared to their foreign counterparts, Chinese crowd funding websites are far from influential.

"A single project on Kickstarter can raise millions of US dollars. But in China, raising over 500,000 yuan for a project can be very difficult," said Zhang.