Armstarter: Crowdfunding for Armenians

By Karen Petrosyan

Armenians and crowdfunding: the two words are unfortunately rarely used in the same context. For those who do not know, crowdfunding refers to the alternative financing of projects by a large number of people with small contributions. With the development of crowdfunding platforms, the process of fundraising has been simplified, allowing project creators to find support almost anywhere in the world.  In 2018 alone, the global money turnover of reward-based crowdfunding is estimated to be more than $9 billion.

Karen Petrosyan recently set up a crowdfunding platform called Armstarter, which is now almost ready for launch (Graphic: Armstarter)

But money is just one part of this phenomenon.

Such websites give a unique opportunity for ordinary internet users to present their ideas to a wide audience—whether it’s a music album, social initiative, mobile application, photo exhibition, handmade product, book, etc. The final result of the project often becomes a reward for the sponsor. That is how crowdfunding differs from traditional charity.

So why doesn’t the Armenian world, which is constantly searching for “effective” unity, have such a platform to call their own? In Belarus, for example, which has a population of just under 10 million—about the same number of Armenians around the world—the was recently launched. In just 20 months, individuals have collected $200,000 for their projects through the website and more than 80 projects such as films and theatrical performances, books and other goods have come to life. It is the contributions of ordinary Belarusians that have turned their fellow compatriots’ ideas into reality—not special funds, grants, or loans.

Why is a special Armenian platform needed when there are existing ones? Even a simple analysis of popular American crowdfunding websites shows that most of the campaigns from Armenia do not achieve their financial goals. Due to lack of experience, their initiators rarely engage in serious promotion of their own projects and, as a result, go unnoticed. In turn, the Western public is reluctant to invest in local Armenian projects, as they are not interested in the restoration of pulpulaks (drinking fountains), the debut album of a jazz musician from Gyumri, or apps made for learning Armenian. The exception applies where the projects initially aim at the global market. One of the striking examples is the Volterman smart wallet, which raised nearly two million dollars on last year.

The Armenian world needs a platform for direct interaction in the context of uberisation, which reduces intermediate links between the participants of the economic process. I recently set up a crowdfunding platform called Armstarter, which is now almost ready. Anyone can register on the site and draw up their own test project using a convenient multilingual editor with tips.  The interface fully supports Armenian, English, and Russian and allows creators to write titles and announcements to the projects and perks in three languages at once. This approach is intended to increase the number of potential backers, as every user can view the project page in the desired language without using machine translation.

But to launch Armstarter, we need a working payment system for card payments on the site and a powerful marketing promotion to break into the Armenian world. We, as an Armenian legal entity, unexpectedly received refusals from local banks to connect, partly due to the fact that the Central Bank of Armenia does not regulate crowdfunding, and  because conservative credit institutions do not want to deal with a little-known client and their “bizarre” project. According to unofficial information, though, the Central Bank is already working on a crowdfunding draft law.

International payment systems, including Russian companies, also refused us, citing the Armenian origin of the organization. Apart from the possible review of the position of Armenian banks, registration of a legal entity either in Russia or in the West and the connection of the payment gateway under the new state jurisdiction might be a solution. To do this, as well as to promote the project, we need strong and serious partners who believe in the new opportunities of the Armenian world.

Traditionally, the investment contribution of the Armenian Diaspora is presented in the form of charity. Alternatively, Armstarter offers Spyurkahyes (Diasporan Armenians) to invest even a few dollars in the republic. In return, they can get a unique bonus and, more importantly, become involved in the creation of a new project. From my experience, public gratitude from the creator of a project and the thought that you help to create a new product or service is very motivating. I recommend it to anyone who has not tried yet to take on the role of a crowd project backer.

We already have a preliminary list of projects, the authors of which are waiting for the launch of the platform. Communicating with them, you realize that there is a need for such a platform in the country, which will give any Armenian citizen the opportunity to take their initiative to the next step.

I am certain that Armenians and crowdfunding are more than compatible. Help make it happen.

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