Group items tagged

[1] The platform focuses on a specific vertical; film and music are the most common at this time --suresh2323 July-15-11 9:24:36 AM[2] There is a focus is on for-profit ventures. Note that a platform can support for-profit ventures without them being the primary focus. --suresh2323 July-15-11 9:21:58 AM[3] There is a focus on creative projects; art, music, film etc. Note that a platform can support creative projects without them being the primary focus --suresh2323 July-15-11 9:22:37 AM[4] There is a focus on projects designed to bring about social change. Note that a platform can support social change projects without them being their primary focus --suresh2323 July-15-11 9:22:53 AM[5] The funder/fundee relationship is structured so that compensation for funders might be in the form of future revenue, equity or profits --suresh2323 July-15-11 9:23:07 AM[6] The full amount of the funds being sought needs to be pledged in order for funds to be released to the fundee. --suresh2323 July-15-11 9:23:22 AM[7] Whatever amount of money is pledged at the end of the campaign is released to the fundee regardless of whether they accomplished their funding target --suresh2323 July-15-11 9:23:37 AM[8] A threshold amount somewhere below the target for the campaign is determined. Once this threshold is reached, funds are released. --suresh2323 July-15-11 9:24:09 AM[9] The platform has community and/or collaboration features built in --suresh2323 July-15-11 9:24:51 AM[10] The funding process is not one time. It is set up so that the fundee receives money on a regular basis --suresh2323 July-15-11 9:25:16 AM[11] Provides infrastructure and/or processes to coordinate investors so that they invest in projects together --suresh2323 July-15-11 9:25:30 AM[12] Provides infrastructure or resources to coordinate the funding of projects so that they can seek funding together. Currently no one is doing this. This is what is proposed in the Ecosystem Pooled Fund Model: http://www.slideshare.net/sureshf/ecosystem-social-ventures --suresh2323 July-15-11 9:25:42 AM[13] The model is structured with a view to cultivating a relationship between funder and fundee. This is to be contrasted with one time project financing --suresh2323 July-15-11 9:26:03 AM[14] Support very small donations (under $1, fo example) --suresh2323 July-15-11 9:26:19 AM

Here is a collaborative matrix of existing crowdfunding platforms dedicated to small business, startups...

40Billon

SiamoSoci is a marketplace that allows Investors to search through innovative Startups and fund them in exchange for a stake in the companies.

Mr. Hardy is among a small but growing number of small-business pioneers already cracking open those doors, by raising capital through the online social-networking process known as "equity-based crowd-funding." Nine months ago, Mr. Hardy and three co-founders raised $41,000 from 17 investors on a fledgling equity crowd-funding site called ProFounder to launch Fargo Beer Co. in Fargo, N.D.

the state agency issued a formal consent order to ProFounder to "desist and refrain" from engaging in securities transactions

some critics believe they may increase the chance that unsophisticated investors will get scammed by people who aren't really starting new businesses

The future of crowdfunding is allowing investors equity in an idea or business. If we can fund ideas from friends who want to see us become successful, imagine if those friends actually got to participate in the revenue stream. Wouldn’t you give a little extra if, instead of receiving a simple return, you had the opportunity not only to make a profit but also to own a percentage of the company itself?

In recent years, hundreds of crowdfunding sites have sprung up worldwide, covering everything from games and mobile apps to performing arts and businesses, including a number in the UK such as Crowdcube and Crowdfunder.

Rubin outlines four key reasons why people contribute to crowdfunding projects: "The first is because they care about the person, or the cause, or the campaign. The second is because they want the product or the experience. The third is because they want to be part of something bigger than themselves. And the fourth is because they want profit. The first three are serviced on Indiegogo in a dynamic way; the fourth is illegal right now [in the US, although not in the UK]."

"I have very little doubt that 10 years from now, crowdfunding will be embedded into the financial fabric of the world, just in the way credit cards are

these laws now make it almost impossible to invest in small businesses in our communities and pretty much compel us to invest in the New York Stock Exchange. In the name of protecting investors, securities laws now make it very difficult to raise money with crowdfunding.

Failure to comply with these requirements can, at a minimum, result in having to return all your investors’ money. At worst, there could be civil and even criminal penalties.

Ask for donations!

His crowdfunding proposal would require the government to relax the rules around accredited investors (i.e., wealthy individuals) being the only ones allowed to invest in private companies. Some crowdfunding proposals out there would allow anyone to invest up to $10,000 in a private company without being an accredited investor. “It seemed crazy to me that you have to be an accredited investor to invest in a company,” says Case, “but you can go to Las Vegas and lose $10,000 at the table in an hour but you don’t have to be an accredited gambler to do that.”

In over four years of operation, leading crowdfunding site Indiegogo reports virtually no fraud. U.K. crowdfunding leader Crowdcube (which does allow equity finance) reports no fraud.  As is the case for U.S. based peer-to-peer lending site Prosper or AngelList, the popular site for angel investors searching for deal flow from entrepreneurs.  Never let the facts get in the way of a good FUD story.  If you commit fraud online, your life is over.

Fraud feeds on opacity and on small groups, because those factors increase the probably of not being "found out".  Ironically, that would well describe the environment of the traditional investment paradigm.  But in the social networking sphere, the more viral any story gets, the more the chances that fraud will be exposed by the people who would know.

If we make it hard for Americans to invest in crowdfunding, then entrepreneurs will tend to get funded with larger percentages of foreign money.

IndieGoGo, a crowdfunding platform that was founded in 2008, has raised a $1.5 million funding round led by Metamorphic Ventures and Zynga cofounder Steve Schoettler

The site also uses an algorithm, dubbed the ‘GoGoFactor’, that determines which campaigns are featured on the homepage and the site’s outreach (the more engaged your users are, the higher you rank).

IndieGogo makes money by taking a percentage of the money that’s contributed: if you create a campaign and meet your stated goal, then IndieGoGo charges 4%; if you don’t meet that goal, IndieGoGo charges a higher 9% fee, but you get to keep the remainder of the money

The values transformation is the result of a number of different forces including climate change, rampant distrust of and disillusion in the political process, the collapse of the financial markets, the introduction of species extinction risk into the discourse, alienation and fragmentation within western culture, global economic inequity, terrorism and war, the erosion of the importance of spirituality and a sense of higher purpose in western culture etc...the list goes on. The conjunction of all of the above is leading a massive sense of discontent that is permeating our collective consciousness.

The values transformation is the result of a number of different forces including climate change, rampant distrust of and disillusion in the political process, the collapse of the financial markets, the introduction of species extinction risk into the discourse, alienation and fragmentation within western culture, global economic inequity, terrorism and war, the erosion of the importance of spirituality and a sense of higher purpose in western culture etc.

This transformation in values that is taking place is simultaneous with, and in part the result of, the rapid evolution of the technological infrastructure that is substantially increasing connectivity and communication across the world.

The role of nonprofits as a middleman is changing. The donors can more often support a specific project rather than the organization as a whole. Nowadays the donors can also easily have a direct contact with the beneficiaries.

The crowd can organize themselves around goals, campaigns and projects even without the structures that nonprofits have traditionally provided. People don't need a middleman, a nonprofit, to create the impact they want to see.

Startups don't just need money -- they need expertise. In the current scheme of things, investors often provide that expertise. They became wealthy because they know something about how to run a successful business.

But in a crowdsourced model, no one investor has substantial money in the venture. So there's no one who could insist on a board seat as part of their deal, or otherwise make an entrepreneur take their ideas seriously for how to grow the business. That makes the startup a riskier venture, both for the investors and the entrepreneur.

ON NOVEMBER 3rd, surprisingly, a bill was passed by the House of Representatives with strong bipartisan support. The Entrepreneur Access to Capital Act aims to make it easier for small businesses to raise money through “crowdfunding”. For the first time ordinary investors would be allowed to put up to $10,000 in small businesses that are not registered with the Securities and Exchange Commission, enabling Joe Schmo to win big if the company becomes the next Google.

Start-ups are especially needy now, since many banks are loth to lend even to well-established companies.

Jack Herstein, president of the North American Securities Administrators Association, says the only jobs created will be “more jobs for securities investigators”. The current bill does not require start-ups to give detailed information about their business plan, and since stakes in businesses are illiquid, investors will not be able easily to get their cash back.

A majority of our contributions came from people we know. Our enthusiastic team of Tweeters, Facebookers, and staff who supported the campaign and alerted their friends and followers brought us a strong a first-tier network of funders.

The IndieGoGo staff selects campaigns they believe exhibit a high “GoFactor” to highlight on the first page of results

There are loads of articles on the web with ideas for perks from successful campaigns, but keep in mind that those benefits should be thoughtfully tied to your core project.

The hope is that crowd funding will give kitchen-table investors the ability to buy in to a much broader range of opportunities, and will give start-ups access to a whole new pool of capital—the money sitting in every American’s checking or savings account. Advertisement placeAd2(commercialNode, 'midarticleflex',false,'') One site that is experimenting with something like this is SlowMoney, profiled by journalist Amy Cortese in her 2010 book Locavesting. SlowMoney facilitates investment clubs that evaluate proposals from farmers and other purveyors of local agricultural goods

It gives a massive pool of investors—basically everyone—access to a wide range of companies. And it gives that wide range of companies access to a massive pool of investors.

1.  More than 50% of companies funded by angel investors fail, with most returning nothing to investors.  And, less that 10% of these angel-funded companies are home runs, providing exciting returns on investment to angels.  These home runs often take a decade or more to mature to the point that investors can exit.  Since investing in startup companies is very risky, the only winning investor strategy is to pick well and invest in many companies.

downsides to crowd funding.

Crowd investors will not be in a position to demand board representation on new companies and will likely suffer from lack of feedback from funded companies.

What makes Kiva “social” are some of the typical features you would have in a social network, like pictures, profile, updates; but more than that, it’s that sense of personalisation that originates from knowing what you’re doing with the money you’re giving.

One of the first peer-to-peer lending site to launch was Zopa, a London-based company providing an online money exchange service. Zopa operates within the UK, Italy and a service is being developed for Japan.

 In 2006, Prosper was launched in the US, following the same model.  In 2007, LendingClub launched the second peer-to-peer lending site

The bill provides a crowd funding exemption from Securities and Exchange Commission registration of securities offerings, with certain limitations: A $10,000 limit per investor (or 10 percent of annual income, whichever is less). A cap on the amount a company can raise of $1 million per offering (and up to $2 million if audited financial statements are provided). No limit on the number of accredited or unaccredited investors.

newer (and crowd-based) tools to monitor online reputations are emerging. Either way, the potential to unleash untold numbers of new ventures is certainly exciting for would-be entrepreneurs.

crowdfunding is different to many funding models in that it is based on the widest possible participation and tapping into “The Long Tail.” To do this, it has to reduce the barriers to participation, so it must reduce the friction and cost in the process and leverage the power of the networked engaged world where individuals are less constrained and able to re-imagine themselves into new roles, in this case as investors.

For the entrepreneurs looking for investment, you need to register also and submit a proposal, which then undergoes a checking process on the part of Crowdcube, who will decide to accept or reject it into the portfolio on offer.

So, the real innovation in crowdfunding beyond tapping into your tribe or casting the net a bit wider comes with the advent of turnkey platforms that open the field up to much wider groups of investors beyond the “certified high net worth” individuals- in other words, you and me.

To catch the eye of potential funders, you’re going to need to stand out, engage your community and close the sale.

Are you a creative? Be sure to check out Kickstarter or IndieGoGo.Looking to start more of a traditional, albeit entrepreneurial, business? Head over to ProFounder.Does your idea have a social bent? You might do well at Buzzbnk or 33needs.Non-profits can fundraise at sites like CauseVox or FirstGiving.

Many of the successful projects on crowdfunding sites target a specific, narrow audience.