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What is Crowdfunding?

What is crowdfunding?

posted Apr 3, 2013, 4:47 PM by Andrew Manzo

Crowdfunding is an alternative method of raising finance for a business, project or idea.

Unlike traditional forms of financing, in which one investor typically takes a larger stake in a project, with crowdfunding you can attract a ‘crowd’ of people – each of whom takes a small stake, and contributes towards an online funding target. The rise of crowdfunding platforms such as Kickstarter in the US and Crowdcube in the UK have provided both projects and investors with the first real, organised and scalable way of interacting.

Crowdfunding also provides projects with a powerful way of building communities and interest, whether it be in a start-up business idea, a new film or a charitable scheme. These early stage supporters can provide invaluable confirmation of the merits of an idea and save projects significant time and cost that might be involved with more traditional routes to finance.

Broadly speaking there are three types of crowdfunding platform:

Reward based – sites such as Kickstarter enable projects to raise funds in return for rewards. For example an author might offer backers a signed copy of his book, access to a launch event or the chance to be a named character, depending on the level of support that they offer.

Peer to Peer Lending or Crowdloans: sites such as FundingCircle connect projects direct to a crowd of investors who are willing to lend money to a pool of businesses or individuals.

Equity based: sites such as Crowdcube enable businesses to raise funds from the crowd in return for giving up equity in their business.

Choosing the right platform is a critical part of the crowdfunding process and will have a huge effect on whether your campaign is a success, and so it is something that I will cover in detail in the rest of the site.



Posted From ; http://crowdsourcingcapital.co.uk/about-crowdsourcing-capital/what-is-crowdfunding/

What is Crowdfunding?

posted Apr 3, 2013, 4:45 PM by Andrew Manzo

The current economic climate has encouraged many people to become interested in striking out and starting their own businesses. Technology has grown to the point that many people can start businesses, and earn money, with the help of the Internet. For those working from home, costs might be low initially, but expansion might require something more. And, of course, if you are a small business starting out in a different location you need start up cash immediately.

Getting that cash can be difficult if you can’t the angel investment you need, or the venture capital you require. And what if the bank turns you down for a loan? Small business fundingisn’t easy. However, with the help of crowdfunding many businesses are starting to get off the ground.

What is Crowdfunding?

Crowdfunding works in much the same way as microloans for the poor. You receive a large number of small cash infusions, rather than one or two large ones. Multiple investors can band together to pledge amounts of money ranging from one dollar to thousands of dollars. Web sites like Kickstarter have really taken off in the United States. In Canada, though, the trend is slow to catch on. Sites like Ideavibes and Startup Fuel are offering crowdfunding services, but the regulatory situation in Canada provides challenges to crowdfunding.

How Does Crowdfunding Work?

In some cases, efforts to fund an enterprise are more like donations. Contributions to the startup are made, and the person giving the money may only be listed as a supporter, and receive no tangible benefits. In other cases, business owners offer finished products, or provide discounts, in return for financial support. So, an “investor” might not own equity in the company, but he or she can expect to be among the first to receive a product, or get some other special perk. (I funded a friend’s comic book at a level that allows me to be a background character and get artwork on top of a free copy of the comic.) This type of crowfunding is popular because securities regulators don’t have to get involved. “Investors” receive “gifts” or recognition, and that is the end of it.

The United States just recently passed a law that eases requirements for crowdfunding that involves an equity model allowing investors to receive an actual interest in the business profits. This is where regulatory agencies come in. The United States just passed a law that helps exempt crowdfunding from some of the more onerous requirements of business and investors involved. In Canada, the snag is that there is no national regulatory agency.

Crowdfunding and the Equity Model in Canada

With the equity model, investors truly are investors, and receive some sort of interest in the company, and receive an on-going benefit. However, in Canada the ability to raise funds for your business with the help of crowdfunding is limited by the fact that you would have to meet requirements in 13 different provinces and territories. Unlike the U.S., one rules change doesn’t solve the issue. There would have to rules changes with each of the Canadian securities regulators. And, if one province/territory changed the rules, the funding could only be raised in that region; no nationwide push for funding.

So, while crowdfunding might help your business, it might take a while for it to really catch on Canada — especially if you want to pursue the equity model.



Posted From ; http://sustainablepersonalfinance.com/what-is-crowdfunding/

Introduction to Crowdfunding

posted Apr 3, 2013, 4:43 PM by Andrew Manzo

Overview

As traditional grants for artists become scarce, creative people are coming up with new ways to raise money. Crowdfunding is a popular new online fundraising technique that you can use whether or not you have non-profit status. Although successful crowdfunding requires a significant investment of time and effort, it can work well if you have strong online networks of fans and friends that you are willing to ask for money.

What is Crowdfunding?

The Power of Many Small Gifts – Many of your fans, friends, and acquaintances may only be able to give small amounts, but if you can get a big enough crowd of them to donate, you can reach your funding goal. The problem is figuring out how to reach enough people without spending a lot of money on publicity and advertising.

Crowdfunding websites solve this problem by offering you a simple way to create attractive online fundraising pages that you can publicize through your email lists, Facebook pages, blogs, or any other social networks. You can also ask your friends to publicize your campaign through their networks. The more people you can ask, the more likely it is you will reach your goal.

You could accomplish this same kind of outreach by doing snail mailings to large numbers of people, but that would be much more expensive and time-consuming. The advantage of the new online crowdfunding websites is that they provide a cost-effective way for independent artists and small organizations to reach many more people.

For-Profit or Non-Profit Projects – Crowdfunding can be used for either for-profit or non-profit projects. If your project has non-profit status, then you can offer your donors a charitable deduction on their income taxes for their gifts. If you don’t have non-profit status, you cannot offer tax deductions, but you can offer other rewards or incentives.

For instance, if you are making a film, you could offer people a DVD of the finished project, signed posters, or an invitation to see the film at a special preview. For small gifts, the charitable tax deduction is small, and many people will be much more excited about having a direct connection with an artist or getting a gift related to the project.

The traditional way of obtaining funds for “for-profit” projects is to find people who will invest in the project in exchange for a percentage of the future profits. When you use crowdfunding, you give away other kinds of rewards, and you can often keep 100% ownership of your project. You have the freedom to do any kind of project you want, as long as you can persuade people to give you money for it.


Doing A Crowdfunding Campaign

Define Your Project – If you are interested in crowdfunding, the first step is to define your project and set a fundraising goal for it. You need to be able to write a couple of paragraphs that will explain to people what you want to accomplish, how much money you need, and why they should support you. This is actually the first step in any fundraising effort.

Set Your Funding Goal – To decide whether your funding goal is realistic, you need to think about how many people you need at each giving level to reach your goal.

For instance, you could reach a goal of $5,000 with the following combination:

10 people at $100 each = $1,000
30 people at $50 each =   $1,500
100 people at $25 each = $2,500
Total from 140 people = $5,000

Do you know enough people that you are willing to ask who could give at the levels you need. If not, is there a way you can draw new people to your project? Can you organize a fundraising team where each team member agrees to raise part of your goal? What could you offer your current supporters that would get them excited enough to make a gift and tell their friends to help you too?

If this is your first fundraising effort, it is good to set a goal that you think you can reach. Fundraising is like anything else, you get better with practice, and once you get started, you may discover you can raise more than you thought.

Create a Crowdfunding Web Page – Once you can explain your project, know how much you need, and have figured out who you can ask, the next step is to set up a page online to collect your donations. Two popular crowdfunding sites are Kickstarter and IndieGoGo (both of which are discussed below), but you could also set up a page on your own website usingPayPal. If you have non-profit status, you could use a Facebook Cause page.

Your page should provide a clear and concise overview of your project, state the amount of money sought and exactly what it will be used for (i.e. post-production on a documentary film, or studio time to record an album). Ideally, your page will also contain a video about the project or other examples of the work, such as a song to listen to or an excerpt of a script to read.

Supporters should be able to donate money simply and easily through your page. BothKickstarter and IndieGoGo are designed to do this. You will encourage more gifts by offering incentives and rewards to supporters at different levels (i.e. a donation of $25 will get the supporter a free digital download of the artist’s album, and $40 will get the supporter a signed copy of the album on CD).  It is good to take some time to figure out rewards that will be appealing to your supporters, but not too hard for you to produce.

Ask As Many People As Possible to Give Money and Spread the Word – Once your page is up, you can reach out to your entire online network, using Facebook, Twitter, blogs, and e-mail. Ask everyone not only to give money to the project, but also to spread the word to their networks, or at least to specific people they think might be interested in funding the project.

Keep Asking Until You Reach the Goal -
As you get closer to your goal, send frequent updates to keep building the excitement until you reach your goal. Keep in mind that these are very challenging times, and some people may not be able to give you money, even if they want to. Don’t take it personally, just stay focused on finding and asking people who have enough money to make a gift. Sometimes people who don’t know you as well are willing to help you out if one of their friends asks them.


Introduction to Kickstarter – www.kickstarter.com

Kickstarter’s All or Nothing Philosophy – Kickstarter is powered by an all-or-nothing funding method; once you set your funding goal, you must meet that goal or you will not receive any money. The philosophy behind this method is that if you don’t meet your funding goal, it is unlikely that you will be able to complete your project, and trying to move forward would set you up for failure.

Kickstarter’s founders believe that this all-or-nothing method gives artists an opportunity to test the waters to see if there is enough interest and support for a specific project to merit following through.  Also, this approach motivates creators and supporters to spread the word and really push to reach their full goal by the deadline.

Must Set Funding Goal and Time Limit – Kickstarter requires every project to set a funding goal (in U.S. dollars) and a time limit (from 1-90 days).  There is no limit to the amount of money an artist can raise.  Supporters make pledges with their credit cards during the campaign. When the time limit is reached, if a project has met its goal, supporters’ credit cards are charged and the project creators receive all the money raised (minus the credit card fees).  If a project has not met its funding goal, no one’s credit card is charged and the project receives no money.

If the project is funded, the project’s creator is responsible for delivering the rewards pledged to supporters and finishing her project.  If the project creator has 501(c)(3) tax exempt status, donations can be tax deductible, which can be a further incentive to supporters.  If a project successfully reaches its funding goal, Kickstarter applies a 5% fee to the money raised.  If a project doesn’t meet its goal, Kickstarter doesn’t charge anything.

Eligibility Requirements – All payments are processed by Amazon Payments, and to receive funds through Kickstarter, you must have an Amazon.com account (it’s free and easy to create one if you don’t have one).

Currently, you must be a U.S. resident with a U.S. bank account to to start a project.  In the future, Kickstarter plans to allow people to create projects internationally.  Supporters can donate from anywhere in the world.

Tools – Kickstarter offers several ways for project creators to monitor their campaigns, including a real-time stream of comments, pledges, and other project activity; a list of all reward pledges; a message center to communicate with supporters; transaction history; and the ability to edit the project page and post updates for supporters as the campaign proceeds.  In addition, Kickstarter interfaces with Facebook, which can help simplify the campaign.


Introduction to IndieGoGo – www.indiegogo.com

Basic Tools – IndieGoGo is similar to Kickstarter in that it offers each project its own page, tools to communicate with supporters, donations tracking, and social network interfacing.  As on Kickstarter, projects on IndieGoGo are expected to reward supporters at different donation levels.

Started as Film Platform – Since IndieGoGo started out as a fundraising platform for film, they have experience with projects that require large sums of money that often take years to raise. Although people from any art form are welcome to use the site, IndieGoGo’s philosophy reflects its roots in filmmaking.

No Campaign Time Limit / Keep Whatever You Raise – IndieGoGo differs from Kickstarter in two key ways: there is no deadline to meet your funding goal, and you get to keep the money you raise even if you don’t meet your goal.  The advantages of this approach are that an artist can still receive some money and modify her project to work with what she has raised, and she can break the fundraising campaign into several stages.

In fact, IndieGoGo recommends conducting several different campaigns for smaller amounts of money rather than trying to raise a huge chunk of money all at once.  They have found that campaigns are usually more successful when broken down; for example, try setting a goal to raise money for the cameras you need to buy, then set another goal to raise money for pre-production, and so on.  Project creators can keep the same account and conduct multiple campaigns without having to start over.

Funding Limit – IndieGoGo’s funding goal limit is $100,000.

Payment Options & Fees – Supporters can donate money through Amazon Payments, PayPal, or by credit card directly through IndieGoGo. Project creators are responsible for any credit card processing fees.  Also, IndieGoGo charges a 9% fee on all funds raised, whether or not the artist’s funding goal is met.  IndieGoGo offers a bonus of 5% for every dollar you raise if you meet your funding goal.

Non-profit Fiscal Sponsorship Offered – IndieGoGo has partnerships with Fractured Atlas and the San Francisco Film Society, two organizations that offer non-profit fiscal sponsorships to artists.

Artists who are fiscally sponsored by Fractured Atlas or the San Francisco Film Society can use IndieGoGo for free. Artists can set up their funding section so that contributions go directly to their non-profit fiscal sponsor.  This allows artists to offer tax deductions to their donors. (For more information on what a fiscal sponsor is, see:http://www.womenarts.org/skills/http://www.womenarts.org/skills/fiscal_sponsors/.)

No Geographic Restrictions – Anyone anywhere in the world can post or fund a project on IndieGoGo, so it is a good option for artists located outside the U.S.


Why Try Crowdfunding?

For artists, crowdfunding is a practical and relatively simple way to raise money directly and to connect with their audiences in a more personal way.  Not only will a successful campaign generate money, it will generate enthusiasm for the project.  Supporters who make even a small donation feel involved in the project, and are more likely to spread the word about it to their networks.  A successful crowdfunding campaign can be the first stage of a publicity campaign for the project.

In addition, the dismal state of the economy has led to a drying up of government and foundation grant money for artists.  While foundation grants remain a valuable source of support, the time-consuming process of writing applications coupled with the slim chances of receiving a grant be very frustrating. Also, the foundation process is usually slow. Many foundations only accept proposals once or twice a year, then it often takes them several months to decide about your application.

Crowdfunding is a good option for artists who need to raise money quickly for a specific project and don’t have the time to apply for grants, or for artists who need to supplement grant money they have received.  It’s also a good option for projects that don’t necessarily fit any grant guidelines, or that have a niche audience that can be easily broadened using the Internet.


What Makes a Crowdfunding Campaign Successful?

For artists conducting their first crowdfunding campaign, we recommend using eitherKickstarter or IndieGoGo. As explained above, there are significant differences between the two sites. We encourage you to think carefully about which one suits you best. Be sure to review all of their terms and conditions before setting up your campaign.

Artists who have success with crowdfunding typically:

  • Have networks of contacts and know how to make the most of these networks to mobilize supporters to donate.
  • Are willing to ask everyone they know for money, then ask those people to spread the word about their project.
  • Include visual and/or audio material on their project pages to give potential donors a good idea of what they are funding.
  • Send frequent updates to their current and potential donors about the state of the funding campaign, and continue to keep their supporters informed about the progress of the project after the campaign is over.
  • Provide rewards to supporters that are meaningful but don’t take too much time to produce – be careful not to spend all the time you want to be working on your project working on making rewards for supporters!
  • Set realistic funding goals and timelines to raise those funds.
  • Communicate news about the campaign and the project in an upbeat, enthusiastic way.



What is crowdfunding?

posted Apr 3, 2013, 4:38 PM by Andrew Manzo

The most famous crowdfunding example is the 2012 presidential campaign of Barack Obama in the US for which 150 million dollars were raised by the public. What would have happened if Obama had lacked funds in the middle of its campaign (as his opponent did)? History may have been different. First event of its kind, it was not wealthy industries who shaped the victory of their candidate but millions of people who, on average, provided 80 dollars on Internet to bring the first Afro-American to lead the USA.

In the artistic world, John Cassavetes funded his first film SHADOWS in 1958 with contributions from his audience of several radio shows : "Pledge a movie that resembles you" he claimed!

Crowdfunding is thus a lever allowing the public to financially and collectively sustain an appealing idea or a project. KissKissBankBank aims at applying this model to all the ideas or projects we will find suitable.

Why contribute to this kind of project?

Your first motive must be the pleasure to bring to life ideas and projects that are meaningful to you.

You can also be motivated to live from the inside the execution of these projects.

Even more, you will be able to enjoy the compensations set by the creator in order to see the direct impact of your financial contribution.





Crowdfunding In a nutshell

posted Apr 3, 2013, 4:34 PM by Andrew Manzo   [ updated Apr 3, 2013, 4:35 PM ]

    We've had one or two people ask us about crowdfunding. In a nutshell it's a simpler way to buy tickets or DVD's and support the festival!

You buy your ticket as normal but you are not charged unless we reach our target. Couldn't be easier.

    You can also get as involved as much as you want. If you just love prog and want to see it survive then a £9.99 DVD is a simple but affordable way to help the festival. If you are passionate about prog, spend a little more and be a festival patron. Get your name in lights on the DVD cover and film credits. Crowdfunding is the future and you are not committing any funds unless the festival reaches it's target.    




What is Crowdfunding?

posted Apr 3, 2013, 4:31 PM by Andrew Manzo   [ updated Apr 3, 2013, 4:31 PM ]

Crowdfunding is a method of funding that allows individuals to utilize their personal networks to raise capital and support their cause or business. Campaign organizers create an online profile to explain their fundraise goals and share their project with friends, family, social networks, etc. 

What is Crowdfunding?
 Crowdfunding is a method of funding that allows individuals to utilize their personal networks to raise capital and support their cause or business.

Crowdfunding profiles can be made for both for-profit and non-profit purposes. Fundable is a crowdfunding platform that focuses exclusively on helping entrepreneurs and startup businesses find funding. Businesses can participate in two types of crowdfunding, exchanging either rewards or equity for funding. Check out our resources below to learn more about the history and benefits of crowdfunding.





Crowdfunding? What Is It?

posted Apr 3, 2013, 4:29 PM by Andrew Manzo

    Crowdfunding, or crowd financing, is a practice whereby a person or a company (fund seeker) raises small amounts of money from a large number of contributors (funders), typically via social media.

    The money can be raised to support a wide variety of activities, for example, to stage a cultural event, to produce a film or an album, to help disaster victims, to back the development of a technology product or to jump-start a business. There is no financial institution or intermediary between the fund seeker and the funders: the solicitation is direct.

    Although not new, this funding model is gaining momentum thanks to the popularity of the Internet and social media, which enable fund seekers to reach a large number of people worldwide. Multiple crowdfunding sites have been created to help bring these parties together.



Posted From;http://www.lautorite.qc.ca/en/what-is-crowdfunding.html

Crowdfunding: Is it right for your startup?

posted Apr 3, 2013, 4:26 PM by Andrew Manzo   [ updated Apr 3, 2013, 4:27 PM ]

Remember when you were a child and needed to raise money for something special (e.g., to build a treehouse or buy a bike or toboggan)? In my case, I would ask every family member to donate to my cause. In a way, this was a form of crowdfunding: soliciting funds from a group of individuals to help build or buy something special.

Fast-forward a decade or so (in my case a depressing 30 years), add technology advances and business methodologies and we now have entrepreneurs raising funds not only to build something special, but to change the world in the process.

What is crowdfunding?

According to Wikipedia, crowdfunding (sometimes called crowd financing, equity crowdfunding or hyper funding) “describes the collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organizations.” In MaRS’ case, entrepreneurs could use crowdfunding to fund their startups.

The “poster child” among startups using crowdfunding today is watchmaker Pebble, which used a reward-based model to raise US$10.27 million from 68,929 people, making it the most crowdfunded startup. According to Crowdsourcing.org, crowdfunding platforms raised $1.5 billion globally in 2011.

Pros and cons of crowdfunding

There are many pros and cons associated with crowdfunding for Ontario entrepreneurs. MaRS client Myke Predko, co-founder and CEO of Mimetics Digital Education, says: “Crowdfunding provides an excellent way for entrepreneurs/startups to get their message out to prospective customers in a low-cost, low-risk manner.”

But it might not be for everyone. Here is a short list of the pros and cons:

Pros

  • Allows good ideas that do not fit the conventional pattern to break through
  • Generates validated early adopter “traction” from the crowd
  • According to James Surowiecki in his book The Wisdom of Crowds, it “produces an accurate aggregate prediction,” which can be favourable for follow-on investment
  • Potentially increases the amount of capital entering the startup ecosystem. Imagine if every Canadian family gave 1% of their investable assets to crowdfunding?

Cons

  • If you succeed it’s public; if you fail it’s public
  • Time and effort to raise awareness of a crowdfunded campaign since crowdfunding platforms cannot advertise projects
  • Managing demand if the product takes off (like Pebble)
  • If yours isn’t a tangible product, you may not be able to raise enough money. Social innovation company SoJo discovered this when weighing the pros and cons.

Crowdfunding models

There are various crowdfunding models:

  • Equity-based crowdfunding—investing for equity ownership that will generate financial returns
  • Donation-based—more often used to support charitable efforts or political campaigns
  • Reward-based—pre-ordering a new product or receiving a perk
  • Peer lending—an online broker facilitating loans from individuals to fund a business

Examples of leading crowdfunding platforms

A crowdfunding platform’s primary revenue model is a percentage-based commission on funds paid out to entrepreneurs. A few also generate income by offering white label solutions and cash management by maintaining responsibility for netting and settlements (Source: Crowdsourcing.org).



Posted From; http://www.marsdd.com/2013/01/15/crowdfunding-is-it-right-for-your-startup-part-1/

Crowdfunding

posted Apr 3, 2013, 4:24 PM by Andrew Manzo

This information was provided by the Securities Division of the North Carolina Secretary of State’s Office. The Internet has become an inexpensive and easy way for individuals and businesses to raise money for their activities. Congress recently passed the JOBS Act, which directs the Securities and Exchange Commission (SEC) to create rules exempting crowdfunding from the securities registration laws. Once implemented these rules will remove restrictions on start-up companies seeking investors over the Internet. Investors should be on the lookout for unscrupulous issuers and intermediaries who may attempt to engage in crowdfunding before the rules are written or misuse crowdfunding to steal from investors through false and misleading representations.

What is Crowdfunding?

Crowdfunding is an online money-raising strategy that began as a way for the public to donate small amounts of money, often through social networking websites, to help artists, musicians, filmmakers and other creative people finance their projects.

The concept has recently been promoted as a way of assisting small businesses and start-ups looking for investment capital to help get their business ventures off the ground.

Traditionally, investment opportunities are offered by professionals, such as broker-dealer firms and investment advisers, who must recommend investments that are based on their clients’ investment objectives and levels of sophistication.

Through crowdfunding, individuals are able to invest in entrepreneurial start-ups through an intermediary, such as a broker-dealer or a “funding portal.” By law, “funding portals” are not allowed to provide investment advice.

What is a funding portal?

A funding portal is a website, also called a “platform,” that advertises the investment opportunities and facilitates the payment from the investor to the issuer.

Some portals advertise a variety of investment opportunities on one website, allowing the investor to select one or more projects in which to invest.

How Crowdfunding Works

Joe’s small business sells goat cheese made from his special pygmy goats. To keep his business afloat or to help it grow, Joe can turn to the Internet to seek online donations from the public who contribute small amounts of money and expect nothing in return. Joe usually sends a sample of his cheese as a thank you for the donation; large donors might even get a cheese named in their honor.

New legislation has directed the SEC to write rules that will change how Joe can raise money online. Once the rules are written, Joe will be able to use the Internet to raise up to $1 million each year by selling investments in his company to thousands of investors. Because Joe will be issuing shares in his company in exchange for investment capital, his supporters are no longer donors; they become investors and will expect a financial return for their investment.

Why Investors Must be Extremely Cautious About Crowdfunding Investments

• Crowdfunding investments cannot be offered legally until the SEC adopts rules to permit them. Beware of offerings that seek investments immediately.

• All investments have risk, but small business investments have even greater risk than normal. About 50 percent of all small businesses fail within the first five years.

• Funding portals must be registered with the Securities and Exchange Commission (SEC), belong to a self-regulating organization (SRO), and comply with other rules the SEC may issue.

• Crowdfunding portals claiming an accreditation or “seal of approval” from a standards program or board may not be legitimate.

• Issuers using funding portals to raise money may be inexperienced. Their track records may be unproven, unsubstantiated or outright fraudulent.

• The information about the investment is limited to what is provided through the funding portal. Investors may need to rely on their own research to determine the issuer’s track record.

• Because state regulators are not allowed to review crowdfunding issuers or their offerings, full and complete disclosure may not be available to investors.

• Investors may have limited legal ability to take action against the issuer should the investment not perform as represented. Due to limited regulatory oversight over these offerings, investors may be left on their own to pursue costly private lawsuits when things go wrong.

• Crowdfunding investments are mostly illiquid and investors must be prepared to hold their investments indefinitely. It also may be difficult or impossible to resell these securities due to the lack of a secondary market.

The Bottom Line

It pays to be skeptical of investment opportunities you learn about through the Internet.

When you see an offering on the Internet - whether it is on a funding portal, in an online newsletter, on a message board or in a chat room - you should be cautious until you have done your homework and proven that it isn’t a scam.

If you have any questions about crowdfunding offerings, contact the North Carolina Securities Division at (800) 688-4507 or www.sos.nc.gov .



Posted From ; http://www.asheville.bbb.org/GIReport.aspx?NewsID=288

What is CrowdFunding?

posted Apr 3, 2013, 4:22 PM by Andrew Manzo

CrowdFunding occurs when many ordinary people put small amounts of money (typically $10 to $200) into projects that they believe in. For example, a designer needs to raise $30,000 to place an initial order for a watch that he/she has designed. If 430 people put up an average of $70 each, then the project can be funded, and the watch can become a reality.

The foundation of the Statue of Liberty was paid for by CrowdFunding, promoted then by a New York Newspaper. They raised over $100,000, and the average person put in one dollar.

How Does It Work?

At START.ac potential projects go first to CrowdAuditionTM, where our members give feedback and advice to help improve them. The members' input also plays a key role in the selection of which projects go to fundraising. Doing it this way, if a project is rejected, the project driver will already know why, and can then decide how to improve their project before they enter it again... explore our projects

For a quick video on how the site functions, click here!

How is START.ac Different?

We have introduced many unique innovations at START.ac. Here are ten of them [Tweet This];

1. InsideTrack™ [Tweet this]
Do you ever watch American Idol or The Voice and think "Boy, I’d sure like to garner as many fans for my project as these singers do for their talent"? Well, turns out now you can. With our InsideTrack program we encourage you to make your Supporters feel as closely connected with your project, as American Idol fans do with the top 10 singers. Just like on American Idol we have our Project Drivers open their kimonos and expose their emotional journeys through their setbacks and big wins. By engaging the Supporters emotionally in this way, we make START.ac a far more engaging and deep experience for Supporters, which means they come back more often and fund more projects.

2. CrowdAudition™ [Tweet This]
Do you ever wonder how a CrowdFunding website determines which projects get to move into fundraising and which ones are rejected? So do we. Sometime it seems rather arbitrary, so we decided to take the guesswork out by introducing CrowdAudition. CrowdAudition involves the START.ac community in the selection process of projects. During CrowdAudition Project Drivers get feedback from the START.ac community, so they can learn how to improve their projects. This gives the Project Driver an opportunity to rework a project (to be its very best) BEFORE it actually goes up for funding. And if their project is not getting an enthusiastic response, the Project Driver can ask our members why, and learn what to do differently. In this way, we leverage the expertise of the Crowd, and increase the involvement of our members. We put the best projects up for fundraising. And we take the mystery out of the rejection process, because when a Project Driver gets a “no” he or she knows why.

3. Mentor Program™ [Tweet This]
START.ac Mentors are experienced executives and entrepreneurs who have the desire to help entrepreneurs that are just getting started. They have learned a lot, and they want to give back, to help new entreprenuers avoid the mistakes they made, or that they have observed. Because we know that raising the cash to embark on a startup is just one part of building maximum success.

4. CrowdAccelerator™ [Tweet This]
CrowdAccelerator is the next step for successful businesses that were initially funded via START.ac. Once it’s clear a START.ac-funded business is well on its way to becoming a flourishing entity the Project Driver may approach START.ac Mentors to request their dedicated involvement in the business. This program's purpose is to provide the best possible prospects for the largest possible success, by relying on the continued support of Mentors who can help guide the fledgling business.

5. STARTBusinessRewards™ [Tweet This]
Unlike regular rewards, STARTBusinessRewards are rewards that are given out to Supporters when the businesses they support reach major company milestones. This provides ongoing emotional payback to the Supporters who fund these business. For example, a STARTBusinessReward for a new business might be: “In return for your pledge of $200, when we hire our 100th employee we will send you a framed photo of the whole team with a gold sticker that says 'We could not have made it without you!' Plus, you get a paver with your name on it on the 'Walk of Fame' in front of our building. AND you're invited to the formal ball we're throwing in honor of making this momentous milestone!" Bundling rewards is key with STARTBusinessRewards, because you want your Supporters to feel emotionally connected when your business hits major milestones, making the Supporter feel like he or she directly had something to do with that piece of success!

6. NOWReward™ [Tweet This]
A NOWReward is one in which Supporters must act by a specific date and time, any time, BEFORE the actual project funding deadline takes place. This motivates Supporters by creating a genuine sense of urgency and rarity, long before a project actually reaches its funding end date. Learn how to Rock Your Rewards!

7. NOWAlert™ [Tweet This]
NOWAlert tracks funding, NOWRewards, and CrowdAudition deadlines and displays those updates on every page in the website in the form of the Alert box. So no matter where you are, you can see what’s happening with all projects. NOWAlert informs the START.ac community of events that are about to expire so everyone has the chance to "act now!" and thus not miss out on interesting opportunities.

8. PromptPayProgram™ [Tweet This]
When a Project Driver creates their project he or she selects a project deadline, at which time fundraising stops. This duration can be as short as 15 days to as long as six months. If a project is so compelling that it reaches its funding goal ahead of its deadline (which could occur in just a few days), then we pay the Project Driver the full amount of his or her funding goal at that time (about a week later) with the PromtPayProgram. We do not make the Project Driver wait until the project reaches its actual deadline to receive his or her funds. However, the project continues fundraising until its actual deadline is reached, so that project does not miss out on the extra funds raised – they are paid about a week after the deadline.

9. CrowdAltruism™ [Tweet This]
The CROWDAltruism™ Program allows Project Drivers to use their fundraising prowess to do good deeds worldwide. The program comes in three forms:
Program 1: Pay-It Forward The Project Driver can choose a 6% fee (instead of our standard 5% fee). By doing this they are choosing to pay the 1% to the PayItForward Fund. 25% of this fund is paid to the PayItForward Foundation. The remaining 75% is distributed once per quarter to good causes that START.ac members suggest, and which the members select by vote each quarter.
Program 2: Disaster Relief We encourage Project Drivers to create Disaster Relief projects, which will be fast-tracked when large scale disasters strike.
Program 3: Charitable, helping other people we encourage Project Drivers to set up altruistic and charitable projects. For charitable projects START.ac does NOT charge any project fees.

10. PromiseReview™ [Tweet This]
PromiseReview™ is a rating that lets the world know how a Project Driver and his or her team handled their project before, during, and after fundraising. This rating is provided by the Supporters of the project, and it is done four months after the project is funded. These ratings are important because a Project Driver cannot do another START.ac project until his or her previous project’s PromiseReview ratings have been publicly posted on the Project Driver’s profile page. Plus, it lets Supporters know the integrity and track record of a Project Driver...


Posted From; http://start.ac/what-is-start

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