Crinkling News, Australia’s only national newspaper for children, is in one sense a publisher’s dream.

In just 12 months the family publishing venture based in the Blue Mountains has cultivated a growing national subscriber base, a band of adoring young readers, grateful parents and rave reviews from teachers.

But the latest issue, Crinkling News No 51, will be its last if a crowd-funding appeal launched last week fails to raise $200,000 by Thursday.

Husband and wife team Saffron Howden and Remi Bianchi, who both used to work for the Sydney Morning Herald, have run out of seed funding at the last hurdle. They say they have been so busy putting out the 16-page newspaper filled with original reportage and photography every week they haven’t had the time or the expertise to expand the business and make it self-sustaining.

“The paper itself is going well in terms of reading it, in terms of subscribing, in terms of people re-subscribing,” Howden told Guardian Australia. “We have an over 60% re-subscription rate.

Press gang: The editor of Crinkling News, Saffron Howden, celebrates the paper’s first anniversary in print. Photograph: Jeremy Piper

“We’ve showed there’s a market for this. We’ve showed that it’s worked and it’s wanted. It took us a year of blood, sweat and tears to do that. In the process of doing that, we haven’t had a whole lot of time to sit around having meetings with people.

“And of course while we’ve been having some discussions with potential investors, we haven’t wanted to go public [and] say we need help with our seed funding.”

She insists it’s not a matter of “woe or financial mismanagement, just urgency”.

“It’s not as though we said, ‘We’ll see how that goes’. In that sense it’s a very common story of a start-up. Traditionally in Australia people don’t invest in this type of thing. They invest in property and resources but not a vision and an idea and a kids’ newspaper that we haven’t had before.”

Unless the crowd-funding plea, which was launched by Crinkling board member Peter Fray last week, reaches its goal by Thursday at 1pm there will be no issue No 52.

So far the pledges have reached $86,557 in six days and the campaign is running strong across social media.

Former Sydney Morning Herald editor-in-chief Peter Fray says he is gutted at the idea Crinkling News might close. Photograph: Paul Miller/AAP

Fray, a former editor-in-chief of the Sydney Morning Herald and now the head of journalism at the University of Technology Sydney, said he was gutted at the idea Crinkling would close and he donated the last $2,000 from his own Fairfax payout.

“I am simply not prepared to accept that our kids should grow up media illiterate,” he wrote in Crikey. “[Crinkling News] does real news, proving that there’s more to preteen and teen media than cats and Kardashians. Eight to 14-year-olds actually enjoy the news. Who knew?”

Further down the food chain, children who read the paper have been helping out too, selling cupcakes and lemonade to raise money and even offering their pocket money.

“It’s adorable but of course we don’t want to take children’s pocket money,” Howden says. “Children holding lemonade stands to keep the paper going really shows how much the paper has meant to them in a short space of time.”

They are still hoping to reach the goal but are realistic about the prospects their dream may all end this week and they will have to go out and find paid employment.

“It’s an all or nothing prospect and we did that deliberately,” Howden told Guardian Australia. “This crowd-funding money is for investing to make sure we can survive indefinitely. We didn’t want to take a small amount of money and then have to come to a similar situation in six months’ time.”

Howden insists that they haven’t actually run out of cash and if the goal isn’t reached and the paper folds every subscriber will be refunded in full.

“I think the amount of money that we’ve raised so far shows that the work that we’ve done in the last 12 months has really hit home with a lot of people,” she says.

Journalist Howden and designer Bianchi, who have one child, pooled their redundancy payouts from Fairfax Media to start the newspaper, and have not been drawing a wage from the venture.

They passionately believe Crinkling News can help a new generation of young Australians to appreciate the importance of quality journalism to democracy and the importance of intelligent engagement with the news.

State of play: A copy of Crinkling News explaining that it is at risk of closure. Photograph: Jeremy Piper

“We did use our Fairfax redundancy money to set it up and I am proud of that,” she says. “We’ve both worked in the media industry our whole adult lives and it’s an industry that needs reinventing in a way; we need to connect with the audience more. We thought we could use this money to forge a new path for quality journalism.

“Along the way we’ve been keeping former Fairfax, ABC and News Corp people in employment.”

Crinkling News is proud of the fact that they use senior journalists, photographers and artists to create the paper and they pay everyone professional rates.

The business model is a mix of paid subscribers and display advertising but Howden says they haven’t been able to spend enough time lobbying governments, schools and private interests to invest and or advertise.

“We have been seeking funding through the life of the paper and we knew we had a limited amount of seed funding to keep us going. But time has been our enemy as anyone who’s worked in the news industry knows.

“If you’re putting out a weekly paper, that deadline takes priority every single week. What we haven’t been doing is flying around the country, speaking to every potential investor. We’ve had a number of conversations with a number of people over the last year but we haven’t been able to put a lot of energy into that.

“Also our growth has been organic and we haven’t spent a single cent on marketing.”