How to Crowdfund

Written by Michael Fultz on . Posted in Educational Materials

There are three main ways you can crowdfund. Here’s a quick rundown.

1. Equity

Equity-based corwdfunding is when you ask a crowd to donate to your business in exchange for equity

Who?

Equity-based crowdfunding is a fast, efficient, and easy way for entreprenteurs and start-ups to generate investment opportunities

Where?

Some popular equity-based crowdfunding platforms are: crowdcubesymbid, and growvc.

What Crowd?

The crowds to pursue in equity-based crowdfunding are shareholders, stockholders, and investors interested in your area of business.

2. Donation

Asking a crowd to donate to your project in exchange for rewards of value, such as an e-card, recognition in the credits of a movie, a t-shirt, or the finished product.

Who?

Donation based crowdfunding projects can be great for all types of creative artists, developers, filmmakers, writers, and inventors.

Where?

Some excellent platforms for donation based crowdfunding are RocketHubKickStarter, andIndieGoGo.

What Crowd?

Crowds to look for to fund your creative project are avid fans, philathropists, gadget lovers, and  experimental investors.

3. Debt

Asking a crowd to donate to your business or project in exchange for financial return and/or interest at a future date.

Who?

Debt-based crowdfunding is a way for business owners, start-ups, inventors, and entrepreneurs to start off.

Where?

A few platforms for debt-based crowdfunding include ProsperPeople Capital, and Lending Club.

What Crowd?

The crowds that will be involved with debt-based crowdfunding are mostly investors and entrepreneurs.

Posted by: Misty
Date: 2/20/2013

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Kickstarter vs. Indiegogo [infographic]

Written by Michael Fultz on . Posted in Educational Materials

We’ve had a lot of people ask what the difference is between Kickstarter and Indiegogo, which is better, and which they should use. There is no “ideal” project crowdfunding site. There are benefits and drawbacks to each and they all have their own respective communities. As a result of these questions, here is a simple comparison between Kickstarter and Indiegogo.

kickstarter-vs-indiegogo1

 

Posted By: Misty
Date: 2/20/2013

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B2B Customer Segmentation: 6 Ways to Quickly Identify Target Market

Written by Michael Fultz on . Posted in Educational Materials

Startup and expansion-stage companies have to focus their resources on a target market and be agile in order to effectively compete with enterprise incumbents in their markets.

There are two primary reasons for this:

  • Their resource constraints do not allow them to build the content and knowledge necessary to effectively sell into multiple spaces. Therefore, they are forced to develop a less targeted approach that does not resonate as well with prospects.
  • They waste resources on going after prospects that are unlikely to be good customers.

Despite this fact, many startups approach their markets blindly and consequently struggle to grow and develop into long-term viable businesses.

This blog post provides six one-off B2B customer segmentation exercises that any early development stage B2B company can use to quickly identify potential segmentation characteristics. During the next few weeks, I will walk through how to set-up and carry-out each of these analyses.

The purpose of this series is not to teach you how to plan-out and execute a customer segmentation research project. Rather, it is intended to get startup and expansion-stage company management teams thinking about different ways they can quickly enhance their knowledge of their customer base.

Sometimes this is all the information that is necessary to get your company targeted and selling into a good segment. Other times, you will find that one-off analyses are not enough to identify a good segment and you will need to plan out a full-scalecustomer segmentation research project.

6 One-Off B2B Customer Segmentation Exercises

Below are six B2B customer segmentation exercises you can do in a couple hours to enhance your understanding of your customers and potential segmentation characteristics:

  1. Compare the composition of your customers industry or size against the US census composition statistics for your selected target geography. The selected geography should be representative of the geographic area that your company actively sells into. For most software companies this will be the entire US. This exercise will identify how your customer composition by industry or company size is different from the composition of companies in its target geography. This can be a great way to identify patterns in your customer base that can help you realize characteristics that are correlated with needs. However, you need to understand the company’s previous history of targeting to make sure that the composition differences are not a reflection of previous go-to-market strategies. You can also look at your lead conversion rates for the interesting sub-segment of companies to verify that it’s not a reflection of a failed targeted selling campaign. 
  2. Compare the composition of your lost customers by employment size against the US census composition statistics for your selected target geography. This exercise will identify sub-segments of customers that you are not having success selling into. This can help you see negative patterns in your customer composition that can help you identify characteristics that may be correlated with specific customer needs. Similar to the previous exercise you can look at your conversion rates in the sub-segment to make sure that your company is struggling at selling into a given sub-segment.
  3. Monthly Recurring Revenue (MRR) / Customer or Annual Revenue Per Deal by Selected Firmographic Characteristic: This exercise will identify sub-segments of customers that offer the largest potential value. The key to this analysis is removing outliers and being cognizant of the number of deals that have been sold into the top sub-segments.
  4. Monthly Recurring Costs (MRC) / Customer or Cost of Service Per Month by Firmographic Characteristic: This exercise will identify sub-segments of customers that require the highest levels of cost to support. The key to this analysis is removing outliers and being cognizant of the number of deals that have been sold into the sub-segments.
  5. A Closed Opportunity Win-Loss Analysis by Target Firmographic Characteristic(s): This exercise will identify which cuts of your customer base that your company has had the best conversion rates with. Looking at this analysis across a couple key cuts can highlight patterns in firmographic characteristics that could be linked to needs.
  6. Tenure of Customer by Firmographic Characteristic: This will help identify customer groups that are loyal in your customer base. This can be an important factor in businesses with high new customer on-boarding costs or customer acquisition costs.

In order to identify which exercises make the most sense for your understanding of your business, you will need to identify which factors matter most for your business model.

Posted By: Misty
Date: 2/20/2013 – Source

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PASS – NEO3DO on Indiegogo

Written by Griffin on . Posted in Pass or Fail

Project of the Week: NEO3DO


The NEO3DO is the latest in tablet technology—displaying cutting-edge technology, while being represented through the latest marketing outlets through crowdfunding. The use of technology is abundant within the design of this 3-D tablet as well as how they are pursuing to get the word out about this product. It’s a synergy of novel thought, both in and surrounding the latest and coolest tablet.


It’s a really nice product that deserves the spotlight big corporations overshadow. So this is a shout out to all the underdog tech-based innovators that are improving the wheel as we know it. The San Diegans at NEO3DO have created a tablet that takes the glasses-free 3-D innovations from Nintendo’s 3DS and applies them to the ever-so popular tablet. The NEO3DO pioneers the booming industry of tablet and mobile technology but also pushes the limits on the tablet experience as a whole. Every tech-junkie needs to check this out.


We are also a young San Diego based company, so we are happy to see we are a part of community that encourages innovations. Good job NEO3DO, we look forward to your success!

Crowdfund Mafia
By: Tomas

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Crowdfunding Analysis – Why Some Pitches/Projects Fail

Written by Michael Fultz on . Posted in Educational Materials

Crowd Funding Analysis - Based On Kickstarter’s Published Projects

Does crowd funding analysiss which is based on just one platform holds true for all the other platforms out there? Is it right to do just that? Does it reflect the true results of the situation?

Kickstarter as today’s biggest crowd funding platform is one common knowledge in today’s financing industry.  This is due to the fact that the said website had already funded several successful projects.

However, it has also its own share of unsuccessful projects. It’s just like all the other small-time crowd funding platforms out there who had its share of ups and downs. All these things make it a good model to base from a crowd funding analysis.

It is true enough that the number of projects on the said website that are able to reach its funding goal is not the same as that of the other platforms out there. How these projects reach its target may differ from one another.

But the crowd funding analysis based from the data gathered by experts may hold true for other projects out there from other platforms. This is due to the fact that there are different factors that affects chances of success of a project.

Now, for the question if its right to conduct a crowd funding analysis with only Kickstarter as based model may or may not be right for some people. But the point is … as it is the biggest platform the data it can provide will be able to give more reliable results. With that, it will yield more trusted crowd funding analysis.

With it the trends and factors that may affect the success of a project will be more identified. In other words, the large sample (that is the quantity of launch projects) will be able to establish more reliable baseline situations. Hence, explain why Kickstarter is the platform of choice in most crowd funding analysis studies.

Results from the crowd funding analysis done by Professor Mollick  of University of Pennsylvania and Jeanne who is a blogger lawyer revealed that the base of origin of a platform as well as the preference of its communities can affect the odds of success of projects.

 

Crowd Funding Analysis On A Project’s Chances Of Success

Professor Ethan Mollick of Wharton University of Pennsylvania is an expert on innovation and entrepreneurship. He studies how an individual/group can affect industries. He is also into research and crowd funding analysis studies of start up’s success.

Together with Jeanne, a blogger lawyer, both of them conducted a crowd funding analysis. They used Kickstarter as based model since it is the biggest platform today. The said study found out that the said website had launched more or less 57, 860 projects.

The crowd funding analysis study found out 99% of the total list of successful projects. There were only 82% found out for the projects that did not reach its target. The former is due to the fact that the said website is said to hide the said list from being crawled.

 

Result In The Crowd Funding Analysis Study For Those Projects That Did Not Make To Target:

It was found that 25% of the total 82% projects that did not make to target had made it to around 3% of their target fund to raise. There were only 50% who were able to reach 10% of the target amount. Those projects which are able to reach way more than their target are exceptions to the crowd funding analysis provided below.

The result also revealed that more or less 7% – 10% out of the 82% projects that did not make to target were the only ones able to raise 30% of the target amount. There were said to be approximately 3% of those projects that did not make to target amount that are able to reach 50% of the target goal. Now, what do the results in the said crowd funding analysis may indicate? ( See infographic below).

 

Crowdfunding Analysis

Crowdfunding Analysis

 

Crowd Funding Analysis:

Projects that will not reach the target will either be funded too low or just half way from target amount. There are only two choices in this venture, it’s either get funded or not.  There is no problem with the latter.

But to face the odds of the former it might as well be better if the remaining sum to raise will not be too large. In such case, the project will still be able to take off should you be able to keep the funds even if goal will not be met.

However, with platforms that follows “all or nothing” funding model, the chance of getting funded may prove more challenging. But does this crowd funding analysis mean that project creators will have to avoid platforms of this kind of funding?

Well, no of course. There are other factors that determine the success of a project. For Kickstarter having the biggest supporter community is one edge. It makes projects more likely funded. In fact, most crowd funding analysis studies support that having a wide base of supporters increases odds of success.

 

Result In The Crowd Funding Analysis Study For Those Projects That Were Funded Way More Than The Target

There were said to be 106 projects found to fund way higher than the set goal. Thirty three of these were found to be large projects. 32 of which are in the following categories such as game and software app, hardware and creative product designs. One out of the said 33 projects is in the music genre.

Crowd Funding Analysis:

Based from the said categories, it indicates preference of the supporting community. This fact indicates that there is/are project genres that the community of backers for a given platform are fond of. Such thing connotes that project which falls into any of the categories that the communities are fond of will likely get more backers.

Does this mean that all of these are the only ones that explain why some project fail to reach its goal? Well, no of course. To reiterate, there are different factors that affect the odds of success of a project. The following aforementioned results  of the said crowd funding analysis study are just to enlighten important matters before you crowd fund a project.

Posted by: Misty
Date: 2/14/2013

Author: Ralf Hooijschuur – Source

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Crowdfunding-For-Equity-Infographic-FINAL

As Economic Confidence Slides, Experts Urge Crowdfund Investing

Written by Michael Fultz on . Posted in Educational Materials

“The sooner crowdfunding is allowed to go live, the sooner we can jumpstart a broad base of economic activity in this country,” urges DJ Paul, co-founder of Crowdfunder.com and executive board member of Crowdfund Intermediary Regulatory Advocates. Mr. Paul’s comment comes in light of a new survey released by Gallup showing that six in 10 say economic conditions in the U.S. are getting worse.

“Americans have been more likely to say the economy is getting worse than to say it is getting better in every weekly average since Gallup began tracking these measures in January 2008,” Frank Newport wrote for Gallup. “Americans’ economic confidence has been low for most of the summer so far, with weekly averages between -23 and -29 since June 11.”

(c) Gallup

Whatever happens going forward, the continuing negative views of the economy Gallup has measured over this summer so far show no signs of any upward shift in Americans’ economic optimism.

On August 17, 2012, U.S. unemployment, as measured by Gallup without seasonal adjustment, is 8.3% in mid-August, compared with 8.2% at the end of July.

(c) Gallup

AnnMarie Quintaglie McIlwain, CEO and Founder of CareerFuel, projected that crowdfunding-for-equity, a new fundraising tool created by the JOBS Act of April, 2012, has the potential to create as much as two million new jobs created by startup businesses. Citing a study by Gartner Research, Sherwood Neiss, co-founder of CFIRA,maintained that crowdfunding can be over a $6.2 billion market in the US in 2013. The following infographic prepared by Ms. McIlwain illustrates

On April 5, 2012, President Obama signed into law the Jumpstart Our Business Startups Act (JOBS Act). The JOBS Act will enable small businesses to raise up to $1 million per year from small investors online through crowdfund investment portals. Such investment may begin after the Securities and Exchange Commission formulates regulations to govern crowdfunding. The JOBS Act sets a 270 days deadline for the new rules, however, in anarticle published on CFIRA by Brian Knight, federal laws governing the creation of new rules may realistically push the launch of crowdfunding rules into 2013.

The new jobless numbers and Americans’ concerns about the economy implores an urgency for enabling crowdfund investing as a new tool to spur the economy. “Crowdfunding will inject capital to small business and start-ups which have led our economy out of every recession since World War 2,” Mr. Paul said. “While our economy continues to languish, and while unemployment remains at unacceptable levels, we wait for regulations that will permit the real job-creators and economic drivers of America to move forward.”

Posted by: Misty
Date: 2/14/2013

Article Source - Infographic Source

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Crowdfunding Explained – An In Depth Look

Written by Michael Fultz on . Posted in Educational Materials

With the passage of the JOBS Act, crowdfunding has received a lot of attention lately. In an effort to explain what crowdfunding is and how your business could potentially benefit from it, we have asked David Milliken, Co-Founder and SVP of Marketing for Funding Launch Pad to do a guest post about crowdfunding.

The crowdfunding concept dates back to the 1700s, when Jonathan Swift launched the Irish Loan Fund.[i] Crowdfunding is broadly described as aggregating funds from a broad donor base towards a common cause. This guest blog post explores the four common forms of crowdfunding.

Crowdfunding Overview                                 Crowdfunding Graph

 Microfinance

Microfinance is when contributors align to provide financial services, often seemingly miniscule loans, to low-income clients. Recipients generally lack access to banking services[ii].

Historic examples of microfinance include Swift Irish Loan Fund, and more recently, the March of Dimes. Barack Obama’s 2008 campaign fundraising approach, accepting smaller than traditional contributions from a broader voter base, could be considered a form of microfinance.

Today’s microfinance model began when Nobel Prize winner Muhammad Yunus began giving microloans in the 1970s to help the poor in his native Bangladesh escape poverty. Kiva.org is a prominent microfinance platform, having facilitated $303 million in loans.

Peer-to-Peer Loans

Also known as P2P loans or social lending, peer-to-peer lending enables individuals to borrow from a group of lenders, without the use of an official financial institution as an intermediary[iii]. The theory is that by removing the overhead of banks, borrowers receive lower rates while lenders earn higher returns than expected from savings accounts.

P2P lending grew over 1200%, from $118 million to $1.555 billion, in outstanding loans between 2005 and 2008[iv]. P2P lending is highly regulated by a maze of securities laws. Leading platforms in this fast growing field areProsper.com and Lending Circle.

Donation-Based Crowdfunding

Donation-based crowdfunding (DBC) has exploded in the past few years, with hundreds of platforms. DBC campaigns are often creative (movies, music, art), community, or philanthropic projects. They can also be business-oriented, like the Pebble watch that recently broke the record for largest DBC campaign[v].

When contributing to a DBC project, you are guaranteed nofinancial return. Instead, you generally receive a non-monetary reward related to the project, like a T-shirt, pre-released CD, credits, or unique experiences. No financial returns mean DBC campaigns are not impacted by securities laws, and are generally viewed as legal today[vi].

 

The DBC industry nearly quadrupled in 2011, from $32 million to $123 million[vii]. According to Funding Launchpad’s exclusive consumer research, despite hundreds of platforms, Kickstarter dominates the DBC landscape. IndieGoGo and RocketHub are also major sites[viii].

Investment Crowdfunding

With investment crowdfunding, the crowd earns securities – equity, debt, or a revenue share – in exchange for their contributions. Today, investment crowdfunding is generally considered illegal in the US[ix], but Title III of the recently passed JOBS Act will change that. The Securities and Exchange Commission has 270 days to write the rules and establish a new type of intermediary called a “funding portal” so investment crowdfunding will probably not be enacted in America until Q1 or Q2 2013. To learn more about the crowdfunding portion of the JOBS Act, please see our plain English summary.

Entrepreneurs and politicians expect investment crowdfunding to boost the American economy by giving startups and small businesses access to a new source of capital. Investment crowdfunding is the primary driver behind consultancy Gartner predicting the industry to grow to $6.2 billion by 2013[x]. Crowdfunding for securities is already an emerging fundraising tool outside the US. Leading platforms around the world include Crowdcube (UK), Symbid (The Netherlands), and ASSOB (Australia).

Types of Crowdfunding

 

 


[x] http://cynthiakocialski.com/blog/2011/11/16/drawing-a-crowd-crowdfunding-heats-up/

Posted by: Misty
Date: 2/14/2013

Author: Dave Milliken – Source

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Crowd Power [infographic]

Written by Michael Fultz on . Posted in Educational Materials

You may have a brilliant business idea. But if you don’t have the required funds, your idea will remain just that – an idea. A financing option that is gaining popularity is crowdfunding. You’ll find the definition of crowdfunding, the pros and cons of crowdfunding, the popular platforms for crowdfunding, ways to create a successful crowdfunding campaign and more!

Highlights of the infographic:

1. There are 3 forms of crowdfunding — donations, loans and investment.

2. As of April 2011, 20,371 projects received funds or pledges through crowdfunding.

3.  As of April 2011, US$ 40 million were collected through crowdfunding.

4. Around 43% of projects that receive funds through crowdfunding are successful and around 21% of projects don’t receive any pledges.

Have you explored the crowdfunding option to finance your small business? What do you see are the challenges of obtaining funds through crowdfunding? Do you think this financing option will become more popular?

crowd-power

 

Posted by: Misty
Date: 2/14/2013

Author: Dave Bui – Source

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Drawing a Crowd [infographic]

Written by Michael Fultz on . Posted in Educational Materials

In a down economy, it’s difficult for entrepreneurs to access the capital needed to build their venture from the ground up. Luckily, projects can now be funded by a powerful combination of the social media and generous networks of friends, colleagues, and communities. This model is called “crowdfunding” and is sweeping the startup nation by storm. Is it an entrepreneurial dream, or is it designed for particular products/ideas?

Check out the below infographic on how to navigate the new crowdfunding landscape:

drawing-a-crowd

 

Posted by: Misty
Date: 2/14/2013

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San Diego, CA – How to Crowdfund Event

Written by Griffin on . Posted in Events

Description

So you have an idea, product, or service and everyone you know says it’s great! Or, you’re already selling and bringing in business but you want to grow and expand. Time and money holding you back?

Either example above is exactly what this class is about, making it happen. Crowdfunding is the leading/trending innovation in today’s financial investment world. Knowing where to start and what to do is all you need to successfully implement a crowd funded campaign.

Join us for a extensive look into what makes a professional crowdfunding campaign with special guest speaker Mike Fultz, CEO and Founder of Crowdfund Mafia.

 

Where

Ansir Innovation Center

4685 Convoy street Suite 210
San Diego, CA 92111

What to bring

Writing Materials and/or Laptop/notepad

When

Weds. February 27

6:00 PM to 7:00 PM

 

By: Griffin

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