China’s largest equity crowdfunding platform is under construction by the nation’s leading direct sales company.
JD.com is the Chinese equivalent of Amazon, with massive online sales and a huge delivery network worldwide.
The company has announced a number of measures to finance and mentor startups in China.
The company’s equity crowdfunding platform is expected to easily outperform any other crowdfunding platform online in China.
Besides gathering funding for startups, the platform will also help fledgling companies to grow by helping with training and business support for entrepreneurs.
JD Equity Crowdfunding leverages other parts of the business to help entrepreneurs sell their products and services through the company’s other platforms.
The move is a copycat of a recent announcement by Amazon to foster entrepreneurs and startups.
Amazon will also mentor entrepreneurs and offer to sell products through the US corporation’s worldwide network of web sites.
JD.com has already selected the first batch of startups for equity crowdfunding – including Thunderobot, a gaming designer; Fastwheel, which will manufacture personal transport devices and WeBuzz, a social media company.
“I know how hard entrepreneurs have to work to find funding because I had to go through the process as well,” said JD founder Richard Liu.
“As we are the leading online retailer in China, I want to give something back to help a new wave of entrepreneurs establish a foothold on the web.
“Fresh ideas and new faces are important commodities, but pushing through the crowd to secure the money to take an idea to market is harder than it sounds.”
Liu also explained that launching an equity crowdfunding project was also part of business diversification for JD.com and a natural progression for the company.
“Chinese entrepreneurs are no different to those in the rest of the world,” he said. “Securing finance is a problem.
“Now they have a shop window to display their ideas and the means of selling their products through our network.”
The JD.com crowdfunding model allocates a professional business angel to each project pitching for funds. These mentors help form the proposal and if the pitch is successful, will work with the entrepreneurs to take their business to market.
Liu says JD.com will also take a small equity stake in each project.
The firm already operates a hugely successful reward crowdfunding platform in China which has helped 90% of projects pitched to backers off the ground.
JD.com has grabbed a 33% market share in reward crowdfunding in China.