Crowdfunding | Startup Owl. Social networking comes to finance Crowdfunding may be a big disruptor. The arcane world of Wall Street and the City of London have kept a tight grip on world of finance for so long and has become so incestuous and expensive (in the US, the legal fees alone for a ‘direct public offering’ could run to $100,000), it is no surprise that people who want to start an enterprise are finding many ways to side-step them. Crowdfunding, sometimes called crowdfinance or crowdsourced capital, is in the process of reinventing finance $100 at a time. Rather than imagining that you can develop a fat business plan to convince a single investor, crowdfunding allows you to pitch to a large number of people simultaneously and get small dollops of investment that can add up to the amount you seek.But there are some limitations. If you want to know where the industry is at in 2012, you should see the abridged research report on Market Trends, and Composition and Crowdfunding Platforms.
Crowds of crowdfunders. Crowdfunding Your Startup, Case Example CINTEP. By: Markus Lampinen “I started a company in a country I’ve never been to, in an industry I’ve never worked in, making technology that’s never been built before in the biggest financial crisis for 100 years.” – Nick Christy We talked with Nick Christy, the founder and CEO of Cintep. Cintep has gone all the way from setting up with many challenges, to joining Grow VC and successfully raising nearly $100 000 via crowdfunding, to winning nearly $700 000 in the Green Challenge this year.
Nick joins us in our podcast to talk about how he got here and what the path has been like so far. Listen to the episode for Nick’s story, for how he utilized crowdfunding and raised a seed round, how he manages his relationship with the crowd investors and what that relationship is like. Listen to the episode on iTunes or directly here (“save as” for mp3 version) Here is the link to the Green Challenge 2011 award ceremony, where Nick and his team are awarded the grand prize. Join Grow Venture Community. The Wild Wild West of Startup Crowdfunding. Editor’s Note: This article is a revised version of an article that appears in the May 2012 issue of The Social Media Monthly. If you like it, you might want to download The Social Media Monthly iPad app or iPhone app and subscribe, or order a print subscription. If you believe the naysayers, 2013 will usher in an age of snake-oil salesmen masquerading as high-tech startups and duping ignorant investors.
Real startups will become bloated with funding, another tech bubble will burst, and we’ll all lose a boatload of money. And, as usual, it’s Congress’s fault – this time, for not bickering enough. In March, both the House and the Senate passed versions of the JOBS Act with bipartisan support, opening up a new avenue of funding for entrepreneurs: crowdfunding. Crowdfunding allows businesses to raise money from non-accredited investors – i.e., you and me, not just venture capitalists or angels. Which companies will be affected the most? Startups outside the in crowd. Crowdfunding via customers is the new startup capital. When the JOBS Act was signed in April, the startup community gave itself a collective high five.
Crowdfunding would enable startups to reach out to the whole world to get access to funding, not just a small cabal of investors living in a 20-mile radius of Menlo Park. But hidden in the headlines was a much more powerful underlying trend. With the JOBS Act came the creation of an entirely new class of capital that could be far more valuable to startups: customer capital. Meet the new investor class: Customers. Instead of raising capital from VCs to build a product, entrepreneurs can skip the line and reach out to customers before the product is actually produced. We’ve all dealt with pre-orders before, whether it’s the new iPad or a blockbuster summer movie. A big, juicy new fund. While there is a big, amount of capital available from VCs, angel investors and private equity folks, the amount of capital available for entrepreneurs when you count the customer market is much larger.
How To Run a Successful Crowdfunding Campaign. Looking for advice on how to run a successful crowdfunding campaign? This article lays out some of the most important considerations you’ll need to take into account if you want to build your crowd, get them engaged, and drive them to a rewarding conclusion. So first things first: you’ve got to have a crowd to crowdfund something. Who are you going to reach out to with your pitch? How do you know if they’ll care about what you’re doing? How will you identify your early adopters, those precious individuals who step up first and get the process rolling? And how much money should you ask for from your community of potential supporters? To answer these questions, you’ll need to: What Are You Trying to Accomplish? Figuring out who’s in and who’s not is all about identifying a shared purpose. What Can You Achieve This Time Around? With every crowdfunding campaign, you’ll want to start out with a set of realistic expectations that fit your situation.
How much money should I ask for? Best of luck! How to Pick the Best Crowdfunding Platform. Heather R. Huhman is the founder and president of Come Recommended, a content marketing and digital PR consultancy for organizations with products that target job seekers and/or employers. You can connect with Heather and Come Recommended on Twitter and Facebook.
The recent JOBS Act has made it easier for small businesses to use the Internet to raise investments from family, friends, the community, and even complete strangers interested in their venture. The process, affectionately known as crowdfunding, helped raise $1.2 billion globally last year and the number is expected to double in 2012. SEE ALSO: 6 Crowdfunding Mistakes That Can Kill a Campaign Variations of this phenomenon are flooding the internet, with new platforms being created and launched every day. As crowdfunding platforms become more prevalent, more niches are being defined. Below are six online crowdfunding platforms, each targeting different users in specific industries. 1. Cost: There is no cost for standard services. 10 Secrets of Successful Crowdfunding - From Scott Steinberg.
With the recent passage of the JOBS Act, crowdfunding is about to get even hotter. Serial tech entrepreneur, speaker and consultant Scott Steinberg, author of The Crowdfunding Bible, explains how to make crowdfunding work for your startup. Steinberg, CEO of TechSavvy Global, answered ReadWriteWeb’s most pressing questions with these 10 insights into successful crowdsourcing: ReadWriteWeb: Are particular types of tech startups better suited for crowdfunding than others, and why is that so? Scott Steinberg: It’s best for [startups] with a strong consumer focus that can easily communicate their value proposition. Crowdfunding works for creative projects - apps, consumer products, software - that resonate with average, everyday people. What crowdfunding is not typically best for is something very technological in nature or B-to-B oriented. RWW: How do you know whether crowdfunding is a better approach for your startup than seeking traditional forms of financing?
SS: Talk to your backers. How Crowdfunding Works: Pros And Cons Of The Different Models | The @SprinkleBit Investing Blog. As the SEC deadline approaches, it seems everyone is talking about crowdfunding and the JOBS act. Here at SprinkleBit, we’re certainly excited about the possibilities that crowdfunding opens for retail investors, so to understand just how crowdfunding works, I want to compare the different models and discuss the potential upsides and downsides of each. Donation-Based Crowdfunding I’ll start with the most well-known of the crowdfunding models: donation-based crowdfunding. In the donation/pledging category there are multiple different incentives for the individual who pledges capital to a company. A look at which projects reach completion on Kickstarter (Photo Credit: Mashable) It’s no coincidence that the top three segments with highest success rates on Kickstarter are Dance (75%), Theater (71%), and Music (68%).
However, there are examples of successful projects where the individual backer had no personal interaction or engagement with the end product other than the bragging rights. 5 reasons your startup isn’t ready for crowdfunding. Now let’s get one thing straight from the start: I’m a huge fan of Kickstarter, Indiegogo and the number of similar crowdfunding sites that have sprung up recently to provide capital directly to exciting business ideas.
There’s something very “American Dream” about being able to build one-on-one engagement with consumers — not to mention how nice it is for companies to have a viable alternative to traditional VC and angel capitalization. That said, Kickstarter (or any other crowdsourcing platform) isn’t a viable option for all companies, and I believe it’s irresponsible at best to herald the company as a “people-first,” egalitarian solution for all business financing needs. In particular, here are five reasons some business owners should not pursue crowdsourced funding: Reason #1: You can’t offer a discrete product. The most effective Kickstarter campaigns (like the $10+ million raised by smartwatch creator Pebble) are those that will eventually deliver a discrete product.