The CrowdFunding Phenomenon
Every once in awhile a business model comes by with so much potential that you need to jump on it before it gets out to the world. The very latest is called Crowd Funding. What is Crowd Funding? It's a new capital funding source - here's how it works:
Start-up entrepreneurs set up a presentation web page that features their product, and contributors from all over the world donate money to be part of the product's development. Contributors don't get equity or shares of stock, but instead the entrepreneur rewards them with thank you cards, donor lists, 'team' membership, email updates, inclusion in the evolution of the development of the product, featuring them on the site, and other 'gift-rewards.'
It sounds like a crazy way to do business, but take a look at some recent Crowd Funding campaigns:
|* Porthole:||$28,500||$736,113||(olive oil-vinegar mixer/ server)|
|* Cloth wallet:||$10,000||$203,489||(a wallet made from cloth)|
|* Sunglasses:||$9,800||$157,068||(copies Australian sunglasses)|
|* Salt rifle:||$15,000||$577,976||(a plastic rifle that kills flies)|
|* Pebble watch:||$100,000||$10,266,845||(yes, that's $10 _million_ dollars)|
The first number is the amount of funding the entrepreneur was looking to raise, and the second number is the amount actually paid in by donors. As you can see, lots of people are interested in being involved with new projects. Campaigns are generally funded in 30 - 40 days from launch.
Crowd Funding is changing the way startups attract capital, and will soon be a major funding source when 'Equity Crowd Funding' is put in place.
In April 2012, the JOBS Act eliminated legislative restrictions and cleared the path for small companies to utilize crowdfunding as a viable funding source. The SEC is in the process of creating guidelines which will allow entrepreneurs to raise as much as $1 million by selling shares in startup companies to the general public without the burdens imposed on angel and venture capital investors. Estimates for crowdfunding transactions in the future go as high as $500 billion annually compared to $3 billion in 2012. If crowdfunding even begins to approach that scale, it will completely change the landscape for start-up financing.
Until recently, a relatively small number of wealthy individuals, angel investors and venture capital firms held the purse strings to the startup world. They demanded, and received, a large percentage of any project they deemed worthy of their interest, and often required a loud voice in company management. Countless opportunities and ideas were lost forever - but out of the need for innovation came innovation itself - Crowd Funding.
Here are 2 Equity Funding articles:
My name is Earl Brown, and until recently I focused my interest on a Santa Barbara-based company specializing in mobile Pay Per Call marketing. Here's my site, www.valueleads.com , and here's a demo showing how mobile Pay Per Call marketing works. Here's a typical PPCall video.
After discovering CrowdFunding, it didn't take long to realize that EquityFunding is going to be a major force in the financial community, but until the SEC gets the regulations in place, perk, (rewards) funding can be used to refine every aspect of the business model. My ultimate goal is to provide services to financial intermediaries, investment advisors, business brokers, and 'Funding Portals' seeking equity funding for their clients. Services will include campaign planning, marketing, presentation design, blog articles, social media, press & publicity, video production, accounting, perks and rewards, investor updates and customer service. These are the services financial professionals will need to get the job done with their investors.
Most CrowdFunding projects are done by entrepreneurs passionate about causes which often don't appeal to broad audiences - video documentaries, music CDs, social justice etc., but the real money makers are unique, interesting products that lend themselves to engaging presentations and prompt impulsive participation. None of the products noted above are technological breakthroughs, (except the Pebble watch), but rather, simple ideas of interest to contributors who believe in the vision, product, company, and development team, and want to be part of something new.
I've got 2 new campaigns every bit as good as the campaigns above, and am looking to connect with a forward-looking investor or successful marketing professional who sees the potential here and wishes to participate. If interested please get in touch in complete confidence.
Here is my contact information:
- Earl Brown
- Capitalized Funding
- Santa Barbara, CA
- email: firstname.lastname@example.org
- phone: 805-984-2925