Crowd Funding for Entrepreneurs of All Types
Crowdfunding is an approach to raising money for start-up businesses that is increasing in popularity. A number of fairly new web services provide administrative platforms to help entrepreneurs obtain funding from contributors. In some cases it could be the old reliable, friends and family, but in many cases contributions come from people you've never met.
One really important point; before you even think about funding your project make sure it is ready for prime time. That means nailed down and ready to go. Crowdfunding is a great concept and if you're ready for the challenge it can be an extremely productive experience.
The image used in this module came from Microsoft's Free Clip Art and Media Library.
One really important point; before you even think about funding your project make sure it is ready for prime time. That means nailed down and ready to go. Crowdfunding is a great concept and if you're ready for the challenge it can be an extremely productive experience.
The image used in this module came from Microsoft's Free Clip Art and Media Library.
Crowdfunding Definition and Introduction
OK, here's where we simplify. You want to produce a movie, a CD or start an online store and you have about 39 cents and a nearly maxed out credit card for capital. You already know that won't get it done. You go online and look at several crowdfunding platforms and select the one that looks like they best suit your needs and can help you accomplish your goals. In most cases with a Crowdfunding platform you pre-define the amount you need to raise and the length of time you think you will need. In most cases those two parameters cannot be changed.Crowdfunding is not a slam dunk. There is no guarantee that you will raise the money you need in the allotted time for your campaign. Crowdfunding platforms will not raise the money for you. That is something you need to accomplish yourself. You develop your own pitch and marketing materials and work your tail off networking. That does not mean you spam everyone, it means you network through social media, you send out intelligent, professional looking e-mail updates to those who are interested. Develop a series of tiered rewards that will have meaning for the people who want to make a donation to your project.
Crowdfunding Books on Amazon
Crowdfunding: A Few Nuts and Bolts on How it Works
Can you just show up at a crowdfunding site and expect money to be handed to you?
Definitely not. As an example, on Kickstarter you define a monetary goal and it must be reached before money changes hands. Yu maintain 100% control of the project once the money has changed hands. Here are the guidelines directly from kickstarter.com: "Kickstarter is for the funding of projects - albums, films, specific works - that have clearly defined goals and expectations.
Kickstarter can be used to fund projects from the creative fields of Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater. We currently only support projects from these categories.
No charity or cause funding. Examples of prohibited use include raising money for the Red Cross, funding an awareness campaign, funding a scholarship, or donating a portion of funds raised on Kickstarter to a charity or cause.
No "fund my life" projects. Examples include projects to pay tuition or bills, go on vacation, or buy a new camera."
Are Crowdfunding Platforms free to use?
Again, definitely not. As an example on Indie Gogo the terms, as stated on their site are, "It's free to sign up, to create a campaign, and to contribute to a campaign.
When your campaign raises money, IndieGoGo charges a 4% fee on the money you raise. If you don't reach your goal, the fee is 9% on the money you raise.
If you have opted for Fixed Funding (all-or-nothing) and don't meet your goal, all the money raised will be refunded to the contributors and no fees will be incurred."
Check other platforms and see what their terms are. Each platform conducts business a little differently. As in any business situation conduct your due diligence and make sure you understand costs, terms and conditions before you sign up. Also make sure you have gone over your budget as thoroughly as possible. Make sure you have covered everything that requires an expense of one type or another.
Do I give up any rights to my intellectual property?
As a rule you retain all rights to your intellectual property.
How does a Crowdfunding Platform help me achieve my goals?
Crowdfunding platforms give you a centralized location where you can accurately track donations. Crowdfunding sites are heavily indexed by the search engines and have many, many visitors so your project is exposed to people who would have never heard of it otherwise. Your project now is perceived as being legitimate (not that it wasn't before) instead of a pipedream. You look more professional. Obviously, this improves opportunities for getting donations. With many platforms (e.g. Indie GoGo) you have one-click integration with Facebook, Twitter, and other social media platforms and custom e-mail templates. A strong, professional looking e-mail campaign that updates the interested will make a difference in perception. We all know that in today's world perception means so much and working from a Crowdfunding platform with their state of the art tools can only help. The 4% that most Crowdfunding platforms get is a small proce to pay if you attain your funding goal.
What do you get for your contribution to a project?
Currently, depending on the platform you get some type of "reward" from the project when you make a donation which is typically less than $100. This "reward" is supplied by the project. The reward could be artwork, a t-shirt, tickets to an event a calendar, a specially stamped coin. In many cases rewards are tiered depending on the amount of money you donate to the project. Really, it's up to the person(s) running the project. Your donation is generally not tax deductible and is currently not considered an investment. At this point in time SEC regulations do NOT allow you to buy shares of stock in a project. Be aware that the House of Representatives has already passed a Crowdfunding bill that will allow you to buy shares in a project. A similar bill has been introduced in the Senate but as of January 20102 has yet to pass. I have more detail on this major change in Crowdfunding in a later section.
Definitely not. As an example, on Kickstarter you define a monetary goal and it must be reached before money changes hands. Yu maintain 100% control of the project once the money has changed hands. Here are the guidelines directly from kickstarter.com: "Kickstarter is for the funding of projects - albums, films, specific works - that have clearly defined goals and expectations.
Kickstarter can be used to fund projects from the creative fields of Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, and Theater. We currently only support projects from these categories.
No charity or cause funding. Examples of prohibited use include raising money for the Red Cross, funding an awareness campaign, funding a scholarship, or donating a portion of funds raised on Kickstarter to a charity or cause.
No "fund my life" projects. Examples include projects to pay tuition or bills, go on vacation, or buy a new camera."
Are Crowdfunding Platforms free to use?
Again, definitely not. As an example on Indie Gogo the terms, as stated on their site are, "It's free to sign up, to create a campaign, and to contribute to a campaign.
When your campaign raises money, IndieGoGo charges a 4% fee on the money you raise. If you don't reach your goal, the fee is 9% on the money you raise.
If you have opted for Fixed Funding (all-or-nothing) and don't meet your goal, all the money raised will be refunded to the contributors and no fees will be incurred."
Check other platforms and see what their terms are. Each platform conducts business a little differently. As in any business situation conduct your due diligence and make sure you understand costs, terms and conditions before you sign up. Also make sure you have gone over your budget as thoroughly as possible. Make sure you have covered everything that requires an expense of one type or another.
Do I give up any rights to my intellectual property?
As a rule you retain all rights to your intellectual property.
How does a Crowdfunding Platform help me achieve my goals?
Crowdfunding platforms give you a centralized location where you can accurately track donations. Crowdfunding sites are heavily indexed by the search engines and have many, many visitors so your project is exposed to people who would have never heard of it otherwise. Your project now is perceived as being legitimate (not that it wasn't before) instead of a pipedream. You look more professional. Obviously, this improves opportunities for getting donations. With many platforms (e.g. Indie GoGo) you have one-click integration with Facebook, Twitter, and other social media platforms and custom e-mail templates. A strong, professional looking e-mail campaign that updates the interested will make a difference in perception. We all know that in today's world perception means so much and working from a Crowdfunding platform with their state of the art tools can only help. The 4% that most Crowdfunding platforms get is a small proce to pay if you attain your funding goal.
What do you get for your contribution to a project?
Currently, depending on the platform you get some type of "reward" from the project when you make a donation which is typically less than $100. This "reward" is supplied by the project. The reward could be artwork, a t-shirt, tickets to an event a calendar, a specially stamped coin. In many cases rewards are tiered depending on the amount of money you donate to the project. Really, it's up to the person(s) running the project. Your donation is generally not tax deductible and is currently not considered an investment. At this point in time SEC regulations do NOT allow you to buy shares of stock in a project. Be aware that the House of Representatives has already passed a Crowdfunding bill that will allow you to buy shares in a project. A similar bill has been introduced in the Senate but as of January 20102 has yet to pass. I have more detail on this major change in Crowdfunding in a later section.
Crowd Funding Resources
On April 5, 2012 the JOBS act was signed into law by President Obama. In terms of the crowdfunding part of that bill (Title III) there are questions about how it will be regulated. In fact, there are still some regulatory loose ends that need to be tied together and that will take a few months.
If you are presented with information on a crowdfunding enterprise as an investing opportunity via the mail, e-mail or telephone always conduct very thorough due diligence on this "opportunity". Do not be afraid to ask hard questions and don't be afraid to walk away . Remember, if it looks too good to be true, it probably is.
If you are presented with information on a crowdfunding enterprise as an investing opportunity via the mail, e-mail or telephone always conduct very thorough due diligence on this "opportunity". Do not be afraid to ask hard questions and don't be afraid to walk away . Remember, if it looks too good to be true, it probably is.
- Kickstarter - A NEW WAY TO Fund & Follow Creativity
- Kickstarter is the world's largest funding platform for creative projects. Every week, tens of thousands of amazing people pledge millions of dollars to projects from the worlds of music, film, art, technology, design, food, publishing and other creative fields.
- Peerbackers - Crowdfunding Big Ideas
- peerbackers is a new way to fund entrepreneurs. It is an online funding platform that allows business owners to raise capital from their "peers"-in small increments-in exchange for tangible rewards to those who contribute.
- RocketHub - Launch, Fund and Fly!
- RocketHub is on a mission to liberate creativity. RocketHub is the foundation for the new creative economy.
- Profounder - Crowdfunding for Your Business
- ProFounder offers free tools to fund and grow your business with the help of your community.
- IndieGoGO - The world's leading international funding platform. Helping people create campaigns and fund ideas since 2008
- IndieGoGo helps you raise more money, from more people, faster. Have something you are passionate about? On IndieGoGo you can create a funding campaign to raise money quickly and securely. Our trusted platform has helped to raise millions of dollars for over 45,000 campaigns, across 205 countries.
- Sponsume.com - Small Stakes in Big Ideas
- Thousands of people visit Sponsume each week. This is your chance to show your project to the world, gather support and raise the funds you need to make it happen!
- Appbackr - The New Market for Apps
- appbackr is the first and only digital wholesale marketplace for the application market. By applying the time-honored wholesale model to the digital age, we solve common funding and distribution problems of application developers. Developers sell copies of an app to wholesale buyers ("backrs") on our marketplace, giving developers immediate funds. We make this easier still with the innovative use of social media tools and more.
- CROWDFUNDER - The funding revolution starts here.....
- Crowdfunding In a nutshell. Crowdfunder is a new way for people to pool small amounts of money to back a good idea or project. If you need funding for a project or idea; Crowdfunder really is a no-brainer.
It's FREE to register and there're no monthly subscription fees
We only take our 5% commission on successful projects
If you hit your funding target by the end date, you'll get the money
If you don't, the people funding your project will get their money back
So there really is nothing to lose and everything to gain. Start a pitch today. - Hi, Meet Pozible, Crowdfunding creative projects and ideas
- Australia's No.1 crowdfunding platform for creative individuals, groups and organisations. Pozible is a crowdfunding platform and community for creative projects and ideas.
Developed for artists, musicians, filmmakers, journalists, designers, entrepreneurs, inventors, event organisers, software developers and all creative minded people to help make great things possible. - Wahooley (Still in Beta Mode)
- Welcome to Wahooly.com, a group of socially-connected individuals that together, help launch startups. As a member of Wahooly, you'll be presented with up to 200 startups over the next 12 months. If you like what they do and if you think that they have the potential to be the next big thing, you become a user.
Your compensation: A piece of the action.
By signing up as a user to one of the startups that Wahooly presents to you, you become an instant shareholder in that startup. If you signup for all 200 startups that Wahooly presents over the next 12 months, you'll be a shareholder in 200 startups. - CrowdCheck - The Crowdfunding Solutions Company
- CrowdCheck - the crowdfunding due diligence company
- National Crowdfunding Association (NLCFA).
- Here is the mission statement: The mission of the National Crowdfunding Association is to support, educate, and protect the American crowdfunding industry.
- Wefunder - Crowdfunding for Startups (Still in Beta)
- Congress has passed the CROWDFUND Act, which will allow everyone to invest in startups and small business. Learn more about #crowdfunding at http://wefunder.com/.
- Funding Launchpad (Still in Beta)
- Raise funds to grow your business, from your biggest fans.
- Give Forward
- GiveForward provides free, personal fundraising websites to raise money online for loved ones in need.
- Sprowd
- Sprowd is the worldwide equity-based investment platform for gathering secure and accessible crowdfunding capital. Join our crowdfunding movement today and make online finance of business start-ups happen.
- Passerby
- A new crowdfunding platform exclusive to film.
- Hands-on, direct-to-fan music-making.
- PledgeMusic is a way for fans to help their favourite artists make their records
Poll Module - How would you fund a start-up business?
Image sourced from Microsoft Free Clip Art Gallery.
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Crowdfunding StickyNote #1
Below are some videos and blog RSS feeds from some Crowdfunding sites. Take some time and go through them and connect with them. They are all very useful.
Kickstarter Blog RSS Feed
ProFounder Blog RSS Feed
Indie GoGo Blog RSS Feed
Rockethub.org Crowd Funding Blog RSS Feed
IdeaVibes Blog RSS Feed
Vote for your favorite Crowdfunding Platform or Organization
Hi everyone, please feel free to add unlisted Crowdfunding platforms or organizations. I guarantee you I don't have anywhere near all of them so your help is appreciated. The more, the merrier. Many thanks!
The image used in this module was purchased from iStockphoto.
Kickstarter
Kickstarter is a funding platform for artists, des more...0 points
Make money with apps | App Wholesale Marketplace for App Developers | appbackr
appbackr is a wholesale marketplace for applicatio more...0 points
Crowdfunding, UK fundraising platform for creative & social projects | Crowdfunder
Crowdfunding - Creative fundraising the social way more...0 points
Peerbackers | crowdfunding big ideas
peerbackers is a new way to fund entrepreneurs. It more...0 points
Sponsume | Fund your project through social networks
Sponsume is the biggest crowdfunding platform for more...0 points
Pozible | Crowdfunding Creativity
Pozible is a crowdfunding platform and community f more...0 points
Crowdfunding for Your Business - ProFounder
ProFounder offers free tools to fund and grow your more...0 points
Go Get Funding | Raise Money Online, Start Online Fundraising
Welcome to Go Get Funding, a crowdfunding platform more...0 points
Crowdfunding Blackbox on the New Law
Here is EVERYTHING you ever wanted to know about the new Crowdfunding Legislation.
Right Down Below
Crowdfunding Legislation
The crowdfunding bill, called the Entrepreneur Access to Capital Act, would allow companies to give out equity stakes in exchange for investments of up to $2 million.
The stakes would not count against the SEC's famous 500-shareholder rule. Individual investors would be capped at putting in $10,000 or 10 percent of their annual income.
Potentially, a start-up raising money on a crowdfunding platform e.g. Kickstarter could make its donors true investors, as opposed to just thanking them or distributing rewards in exchange for their money.
Meanwhile, the House also passed a bill called the Access to Capital for Job Creators Act that would remove a ban on start-ups soliciting accredited investors for capital.
It also passed a bill allowing companies to do small public offerings of up to $50 million without registration requirements.
As of March 22, 2012 a bill has been passed by the Senate that includes provisions for Crowdfunding. As soon as I have clarifications on the Crowdfunding provisions I will publish the information right here.
Crowdfunding Legislative Links
This is also known as the JOBS Act.
Click the various links to get more detailed information and various opinions on the new Crowdfunding legislation.
- Wall Street Journal - May 22, 2012 - Written by Javier Espinoza
- Doing Equity Crowd Funding Right - Small businesses are getting a powerful new financing tool. But there are plenty of pitfalls.
- NY Times DealB%ok - May 3, 2012 - Written by Ben Protess
- Wall Street Wants More From the JOBS Act
- Abnormal Returns - April 30, 2012, written by Tadas Viskanta; Editor and Founder of Abnormal Returns
- The real-time crowdfunding experiment
- NY Times DealB%ok - April 4, 2012 - Written by Susanne Craig and Ben Protess
- Wall Street Examines Fine Print in a Bill for Start-Ups
- Bloomberg News - April 4, 2012 - Written by Susan Antilla
- Take some time and read Susan Antilla's article on the JOBS bill: Ex-Con Man Says JOBS Law Makes Guys Like Him Rich
- A Colossal Mistake of Historic Proportions: The "JOBS" bill
- Take a few moments and read Simon Johnson's note on HR3606; AKA, JumpStart Our Business Startup Act. Simon Johnson is the co-author of 13 bankers, former chief economist of the International Monetary Fund, a professor at the MIT Sloan School of Management, a senior fellow at the Peterson Institute for International Economics, and a member of the CBO's Panel of Economic Advisers.
- Crowdfunding: The Future of Startup Financing?
- Published November 10, 2011 in Small Business Support Blog.
- Entrepreneur Corner
- FAQ: What the new U.S. crowdfunding bill means for entrepreneurs
November 8, 2011
Scott Edward Walker - Securities Law Prof Blog
- Crowdfunding Legislation : Answer to Entrepreneurs' Prayers or Nightmare for Small Investors?
November 13, 2011 - Moody, Famiglietti and Andonico Blog
- What Crowd Funding Legislation Reform Means for Entrepreneurs
by Travis Drouin
November 23, 2011 - Reuters
- Race to relax crowdfunding rules invites strange bedfellows
By Deborah L. Cohen
CHICAGO
Mon Dec 12, 2011 2:46pm EST
Crowdfunding Poll Module on the new Congressional Bill
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Donations
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Another Crowdfunding StickyNote
Here are some related modules that might give you some more insight into Crowdfunding
More Crowdfunding and Related Titles on Amazon
Crowdfunding Del.icio.us bookmarks
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Twitter Search for #Crowd Funding
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- dzey
- Et on parle même de DoYouBuzz dans la conf. sur le crowd funding, c'est beau !
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- BetterBizExpert
- Crowd funding fuels biz, creative projects http://t.co/P2E0RGUB
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- pinnaclesols
- Crowd funding fuels biz, creative projects http://t.co/IX8SAMZo
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- rtcc_tierney
- London's Cody Dock aims to get a new look ahead of 2012 Games with a little help from crowd-funding website @Spacehive http://t.co/RDZOQqqp
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- ZLynxMaster
- #crowd-funding - The Crowd Comes Of Age - Fast Company http://t.co/EMhpz2iR
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- ClickTheCause
- RT @USATODAYmoney: Crowd funding fuels businesses, charities, creative ventures http://t.co/bTTbYVCW
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- crowdzu
- Split Screen: Crowd-funding controversy http://t.co/a7n2ccoq #crowdfunding
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- OccupyCrowdfund
- Split Screen: Crowd-funding controversy http://t.co/MibTWtpr
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- CommonKnowUK
- RT @hiphoprevfilm: Just 15 days left until our crowd-funding appeal finishes! http://t.co/ZV8UkDdl Please RT & support if you can. Gracias!
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- Bimotics
- Interesting GCVC panel on crowd funding last night.
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Wired News
Crowd Funding for Entrepreneurs Lens Love Widget
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Welcome to Crowd Funding for Entrepreneurs Reader Feedback
Please drop us a note and let us know how we're doing. Feel free to include a link to your Squidoo lens or your site. Many thanks for stopping by.
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Jazroockfree
May 30, 2012 @ 2:14 pm | delete
- The lens is very good, communicative and full of clear advice. I love this lens. Thank you for sharing knowledge about funding, I really appreciate your visit to my lens to share. Success for you.
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webkangaroo
May 27, 2012 @ 8:37 pm | delete
- Smart lens, smart topic -- there are so many good ways to find funding right now. Thanks for your clear explanations and solid advice.
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trendydad
May 14, 2012 @ 11:39 pm | delete
- sounds like a great idea in crowfunding...we need new start ups that work
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Ajeet
May 7, 2012 @ 1:04 am | delete
- Crowdfunding sounds good. But I think that it will soon be scandal-hit.
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aurora7
May 3, 2012 @ 10:55 pm | delete
- Great lens. I like the idea of crowd funding.
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raitoavi
May 2, 2012 @ 3:26 pm | delete
- Wow you sure know how to create a great lens, I found it both extremely educational and practical, thank you.
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gypsyman27
Apr 21, 2012 @ 6:52 pm | delete
- This was a very good explanation of a term I had heard but did not know the meaning. See you around the galaxy...
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Treasures-By-Brenda
Apr 13, 2012 @ 8:11 am | delete
- Thanks for the introduction to crowd funding.
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JingleSPOT, Inc.
Mar 27, 2012 @ 3:50 pm | delete
- Excellent lens on Crowdfunding. Mahalo for the hard work
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KimGiancaterino Mar 26, 2012 @ 3:35 pm | delete
- This was very helpful infornmation ... thanks!
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Crowd Funding Business Links
- How should I hang framed wall art decor? The Hangman Store has picture frame hanging solutions.
- Hanging picture frames or heavy mirrors? The Hangman Store sells picture hanging systems that make your framed wall art, all of your home wall decor, look even better. Additionally, we also offer home office organizing hardware, fasteners and safety hardware. Need to child proof your home? We can help with that also.
- M&M Distributors: Quality Picture Framing Supplies & Equipment.
- M&M Distributors supplies picture framing distributors and retail outlets with; picture frame glass, mat board, foam board, and picture framing supplies and machines for professional framers, garage framers, conservators, hobbiests, and photographers.
- Welcome To Chow-E-Chowz Expressions. Every child has a right to live "Safe" around the world
- As you know, there are many children missing around the world that Special Agencies and Law enforcements are not able to find or give an accurate report of missing children. I believe any child that goes missing for any reason should be reported and found.
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