Research 2014. Www.planetinsane.com/download/crowd-funding.pdf. An investigation: Some thoughts. I've been looking at Crowdfunding resources online over the last few days and I have a few thoughts in my head in response to some articles that I wanted to just get written down before they get lost for good. The thoughts below aren't fully realised - the purpose of writing them down at this stage is just so that I open them up as ideas for later consideration and so that they exist in written form so I don't forget them.
Once you've had a read please feel free to comment. Following an excellent and informative lecture/seminar/presentation from the co-founder of the crowdfunding platform/portal IndieGoGo, Slava Rubin, at the SheffDocFest Convergence Catalyst conference (phew) in December I stumbled upon a similar presentation by other co-founder Danae Ringelmann on Youtube: Whilst the presentation is excellent in itself (and I advise anyone interested in CF to watch it) some questions arose about points made in the latter part of the video. Everybody's Critic • A darker perspective on crowdfunding. Crowdfunding More Marketing Than Fundraising: Opinion. 1. You have to give to get in return. If you simply ask for contributions, and offer nothing of value in exchange, you’ll quickly discover why crowdfunding isn’t like running a charity fundraiser.
Backers expect meaningful returns in exchange for contributions — and that means offering compelling rewards. Whether providing preorders at a fraction of retail prices, exclusive merchandize, or singular experiences (e.g. a cameo in your next creation or executive producer credits), meaningful incentives must be provided. Pricing options must also be included at, and spaced out between, all tiers from impulse buys to splurges, to attract all backers. Ultimately, you’re selling something, whether advance access to a software product, or the chance to appear within a film’s all-star cast. 2. 3. 4.
Beyond simple customer relationship management, someone on your team has to function as a tangible, readily reachable face of the movement. 5. A social history of crowdfunding. Many refer to crowdfunding as a “new phenomenon” (or – at worst – the “new bubble”). However, it is not as new as we may think; as a concept, it has been around for some centuries already. The novelty lies in the technologies and the mindset that are giving it a new momentum, technologies and mindset that we will consider in this chronological record of the main events leading to what we now refer to as crowdfunding. We should mention in passing both Jonathan Swift’s Irish Loan Fund, and Dr.
Yunus’ project and Grameen Bank, as ancestors and pioneers of the microfinance phenomenon, each of which have histories of their own but which go beyond the scope of this blog’s subject. We will instead consider crowdfunding strictly in its connection with the web, and as a sequence of developments parallel to the growth of the social web. Late ‘90s – 2000: Internet campaigning and Charity fundraising Mid 2000: Kiva, Microlending platforms, and Peer-to-peer (P2P) Lending. Developments in Crowd-funding.
There’s a glimmer of hope that Congress and the Administration might be able to agree on one piece of legislation this year—the JOBS Act introduced in the House last week by Majority Leader Eric Cantor—that could do something significant for startups, and in turn the broader economy. This legislation combines a number of proposals that would change various SEC rules so as to lower the costs of raising capital by new businesses. Most of these have already separately passed the House by large bipartisan majorities. The Obama Administration also has endorsed most of the ideas in the bill, and reportedly is willing to work with Cantor and like-minded (on this issue) Democrats in the House to get the bill passed.
There is one provision in the proposed Act that is unusually controversial that I’d like to address in this post, because it sure to get some attention in the Senate (assuming the House passes the bill, which is a good bet at this writing). Crowdfunding Nation: The Rise and Evolution of Collaborative Funding. When Kickstarter was launched in 2009, it seemed like a unlikely proposition: fund your passion projects with money donated by eager supporters? Get strangers to fund your dreams with only an idea and a good pitch? While there were precedents, such as the microfinance service Kiva, Kickstarter projects thrived on the goodwill of the crowd while the world economy was in the midst of the global recession. Yancey Strickler, one of Kickstarter’s founders, had his own reservations before starting the company, noting in a New York Times interview that his initial response to co-founder Perry Chen was, “I’m not so sure about this...If you let people vote for what they want — that’s ‘American Idol,’ that doesn’t produce great art.”
Yet in the past two years, crowdfunding has exploded, thanks in part to the Kickstarter’s “all-or-nothing” model for funding. It’s democracy in action: think you have a great idea? Convince enough people and you can make it a reality. Photo by LianaAn on Flickr. Crowdfunding Promises New Opportunities for Entrepreneurs and Emerging Companies- The Law Firm of Faegre Baker Daniels. English | | Extranet Login Information Header Some information goes here This box will hide on Careers page (disable by jQuery in navtop) Crowdfunding Promises New Opportunities for Entrepreneurs and Emerging Companies Related Services Corporate Capital Markets & Securities Emerging Companies & Venture Capital Legal Updates 12 July 2013 - New SEC Rules Permit General Solicitations in Connection with Private Placements 03 April 2012 - Bipartisan JOBS Act Provides Significant Reforms to Public and Private Securities Offerings 07-February-2012 Congress is currently considering bills that will allow issuers to raise capital through crowdfunding, which is also known as crowd-sourced capital, or crowd financing.
On November 3, 2011, the House of Representatives passed the Entrepreneur Access to Capital Act (the "House Bill") by an overwhelming margin. Entrepreneur Access to Capital Act Transaction Requirements Restriction on Resale Exchange Act Registration Democratizing Access to Capital Act Connect with us. Will Crowdfunding Drive a New Wave of Startup Investing? Venture capital investing has traditionally been the domain of the wealthy, but that could change with the passage of new legislation that will allow entrepreneurs to raise money from a much broader swath of the public — and give ordinary investors the chance to own a piece of the next Google, Facebook, or Twitter.
Tucked inside the Jumpstart Our Business Startups (JOBS) Act that passed the House of Representatives with bipartisan support Friday are “crowdfunding” provisions that would relax federal restrictions that have been in place since the 1930’s effectively barring the non-wealthy from investing in startups. Crowdfunding has been a hot topic recently with the dramatic success of online platforms like Kickstarter, which allows anyone to donate money to a variety of projects. Kickstarter expects to distribute over $150 million in 2012, surpassing the annual budget of the National Endowment for the Arts.
(SPECIAL: Investment Advice) MORE: U.S. Collections matching "crowdfunding" Crowdfunding Around the World. Crowdfunding has made it easier than ever for people to pursue their own creative ideas and is an incredibly relevant part of our global lineup at SMW. Learn how to run a successful crowdfunding campaign and the ways that crowdfunding is disrupting new markets. Bangalore: Crowd Fund Your Idea One of the beauties of crowdfunding is that your idea doesn’t necessarily have to be lucrative to get funded. This is opening the door for artists and performers to produce original work with an engaged audience. Director, actor and screenwriter, Pawan Kumar, teaches the basics of successful crowdfunding, from his experience in filmmaking.New York: Crowdsourcing and Crowdfunding: A Social Media Revolution In Real Estate, hosted by Prodigy Network Until now, crowdfunding has been geared primarily towards sponsoring personal projects and small businesses.
However, there is potential for crowdfunding to drastically change the real estate market and the financial markets tethered to it. Crowdfunding Platforms: To Each Their Own. In the past 3 years, alongside the development of crowdfunding, hundreds of intermediary services called “crowdfunding platforms” have emerged to act as an interface between the public and the funding projects, with the aim of facilitating transactions. Crowdfunding (CF) platforms are now the standard solution for people wishing to run a crowdfunding project.
We saw some brilliant examples of crowdfunding initiatives brought forward without a platform, like the popular Obama’s campaign. However the need for such solutions came in almost immediately, and some of today’s most popular CF platforms, like Kickstarter and IndieGoGo, were born at very early stages. The strength of crowdfunding platforms is not only the fact that they offer a turnkey solution, but in that they also develop knowledge and experience through their routine work which is invaluable. The tag cloud above was generated from the “about us” text of some of the CF platforms mentioned in the blog post - ‘keep it all’ model. Community, Crowdfunding & Incentives. ©Mark Wickens Over the last few weeks there have been several interesting posts about crowdfunding, and in general a high level of buzz. It’s been encouraging to see some critical analysis from the likes of David Campbell, Tomas van Hourtryve and a few others.
The skeptic in me thought that most of commentary on crowdfunding would gloss over some of the challenges in favor of touting the virtues of the shiny new form of funding. Yes, it is certainly an encouraging development with plenty of potential but it’s still very untested and I think anytime we can step back and examine how the model can be refined will only make it more viable in the long run. As I’ve been reading these articles and thinking about it, I keep returning to a couple of fundamental aspects of the crowdfunding model: building a community and providing valuable incentives in exchange for pledges.
©Missy Prince The Importance of Community Building ©Noah Kalina Valuable Incentives for Pledges I agree with this sentiment. How to Crowdfund. Online Guides / Resources: Kickstarter’s Creators Handbook – chock full of key insight on running a campaign.Indiegogo’s Playbook – Whether you’re running a campaign or just interested in learning more about crowdfunding, this field guide is packed with tips, tricks, and resources to help make your ideas come to life.The Ultimate Crowdfunding To Do List – Great article from filmmaker Nathaniel Hansen.Amanda Palmers TED Talk – The Art of Asking – This brilliant talk from musician Amanda Palmer shares why crowdfunding is about “the gift” rather than a transactional relationship.Hacking Kickstarter – How to Raise $100,000 in 10 Days – Nice article on Tim Ferris’ blog (4 hour series) which outlines some ninja strategy for a successful campaign.Indiegogo Insights Blog – Read their various blog posts on campaign strategy and statistics.Kickstarter Blog – Check out Kickstarter’s blog as well for various thoughts on strategy and successful techniques.
The Tax Issue: Further Recommended Reading: Exploring The Characteristics of Crowdfunding. The Dynamics of Crowdfunding: An Exploratory Study by Ethan R. Mollick. University of Pennsylvania - Wharton School June 26, 2013 Journal of Business Venturing, Volume 29, Issue 1, January 2014, Pages 1–16 Abstract: Crowdfunding allows founders of for-profit, artistic, and cultural ventures to fund their efforts by drawing on relatively small contributions from a relatively large number of individuals using the internet, without standard financial intermediaries. Drawing on a dataset of over 48,500 projects with combined funding over $237M, this paper offers a description of the underlying dynamics of success and failure among crowdfunded ventures.
It suggests that personal networks and underlying project quality are associated with the success of crowdfunding efforts, and that geography is related to both the type of projects proposed and successful fundraising. Number of Pages in PDF File: 16 Keywords: crowdfunding, crowd funding, Kickstarter, venture, entrepreneur Accepted Paper Series. Center.ncet2.org/images/files/crowdfunding/lawton.pdf. Www.mofo.com/files/Uploads/Images/Crowdfunding_Presentation_May_16_2012.pdf.
Book excerpt: The Crowdfunding Revolution | VentureBeat | Entrepreneur | by Kevin Lawton. (Editor’s note: Kevin Lawton is the author of “The Crowdfunding Revolution”. The following is an excerpt from the book.) My journey into crowdfunding was not exactly typical.Originally, I began exploring a new concept for an early-stage VC firm, one that was a radical departure from the old-school model, which seems to hold a belief that the minds of a few partners and their ‘Rolodex’ can outperform the collective wisdom of the billions of people on the planet.
In researching this new model, I became increasingly exposed to and excited about crowdfunding, which shares many of the dynamics. While in many ways still in its “first inning”, crowdfunding is already on an exponential tear, and has the potential to be a powerhouse of capital formation and an integral part of Venture Capital’s future. Fortunately, there are many activities afoot, that bode well for even equity-based crowdfunding, regardless of regulatory resistance. Ask not what the world needs. Testing2907.files.wordpress.com/2011/06/ideavibes_whitepaper_crowdfunding_web.pdf. Www.planetinsane.com/download/crowd-funding.pdf. Www.eurada.org/files/Scoping Paper Crowdfunding 7_6_2012.pdf.