When Heather Holst-Knudsen wanted to go Spain after college, she found a novel way to pay for the trip.
The recent Georgetown graduate, in the days before Amazon, wrote a cookbook. Then she sold it door-to-door to help get some extra cash for her journey. Says Holst-Knudsen: “I always had an entrepreneurial attitude.”
After a 20-year executive career in marketing, manufacturing and publishing, Holst-Knudsen has taken that attitude to a new place: a startup that's a platform for children and teenagers to build a business through crowdfunding, where capital is raised online in small increments in exchange for special perks.
The business Holst-Knudsen co-founded, based in Sarasota, is KidBacker. Her co-founder and partner is her 9-year-old daughter Carly, a precocious fourth-grader at the Out-of-Door Academy on Siesta Key who helps work on the business when she's not in school. The firm is run out of an office in the HuB, a downtown Sarasota business incubator. “I want to get kids excited about being an entrepreneur,” says Holst-Knudsen. “I see a real lack of work ethic, drive and wanting to be part of a solution in young people.”
KidBacker is essentially a portal that connects kids with business concepts and principles. The crowdfunding site can be used to help kids raise capital for everything from a business idea and charitable causes to school-based projects and trips for sports teams. Holst-Knudsen hopes that through crowdfunding kids will learn about personal finance, online marketing and reputation management. There will also be a mentoring side on KidBacker, where adults will work with the children.
“My vision,” Holst-Knudsen says, “is to create a positive effect on the American economy by creating a new generation of entrepreneurs.”
There are several potential revenue streams for KidBacker, says Holst-Knudsen. One is through a 5% fee on the total amount of money raised through a crowdfunding campaign on the site. Holst-Knudsen will waive the fee for nonprofits and schools.
Other potential revenue sources, says Holst-Knudsen, will come from three areas: partnerships and sponsorships with corporations and companies; an eventual e-learning component with an entrepreneur-based curriculum; and a white-label program she hopes to sell to schools.
Holst-Knudsen realizes those hopes and plans will take time and resources. She's spent the past year or so getting KidBacker ready for a November beta launch — an effort that includes around $100,000 of her own money in startup capital. She plans to invest at least $50,000 more, and she also seeks at least $1 million in angel funding.
“This isn't a small company,” she says. “This could be a large company with a national platform.”
There are several obstacles in the way of her goals, past funding. For one, there's competition from other crowdfunding sites, especially San Francisco-based Piggybackr. That firm was first to market with a similar model, although it focuses more on school and community fundraisers and less on teaching entrepreneurial skills. Another challenge, which could ultimately be a competitive advantage in that it's a high barrier to entry, is building a website where kids receive money is a complicated, highly regulated effort. “There are so many nuances in developing a website for children,” Holst-Knudsen says.
Those challenges have made Holst-Knudsen and her daughter more determined to succeed. Carly says she's already learned a lot about persistence while working with her mom.
“You have to try more than one time,” says Carly Holst-Knudsen. “If you fail, you have to try again. That's what makes a good entrepreneur.”
This story has been updated to reflect the correct spelling of Heather and Carly Holst-Knudsen's last name.
Follow Mark Gordon on Twitter @markigordon