Leading Crowdfunding Industry Analyst Firm, Crowdfund Capital Advisors, States Now is the Time to Update the Regulation to Further Enable Capital Formation
|
|
|
filed by a company (issuer) with the SEC before starting to raise capital and discloses financial information for its current and prior fiscal years) as well as a Form C-U (a progress report that an issuer files that discloses total capital raised).
|
|
Robert Hoskins
(512) 627-6622
@Crowdfunding_PR
Chinese Entrepreneurship Global Study Shows Staggering Increase in Shenzhen and Hong Kong Entrepreneur Activities Compared to 64 Competitive Countries Worldwide
16 FebExperts advocate the two cities join force in formation of complementary advantages to foster international competitiveness for entrepreneurship
Hong Kong, China – New research released by the professors of The Chinese University of Hong Kong (CUHK) Business School’s Center for Entrepreneurship (CfE) and Hong Kong Baptist University (HKBU)’s School of Business shows that entrepreneurship in Hong Kong and Shenzhen is on the rise.
A collaborative effort by CUHK CfE, HKBU School of Business, the University of Hong Kong’s Faculty of Business and Economics, Shenzhen Academy of Social Science and Savantas Policy Research Institute, the research titled “Global Entrepreneurship Monitor (GEM) Hong Kong and Shenzhen Report 2016-17” provides a detailed analysis of the current status of entrepreneurship in Hong Kong and Shenzhen.
The GEM Study Compares the Results with Past Indicators for Ecosystems and Provides an International Benchmark with 64 Other Economies Worldwide
The study compares the results with past indicators for both ecosystems and provides an international benchmark with 65 economies worldwide. It is part of the global initiative, 180-page Global Entrepreneurship Monitor (GEM) Research Report, the world’s foremost comparative entrepreneurship study and a trusted resource on entrepreneurship for key international organizations such as the United Nations, World Economic Forum, World Bank and more.
In the recent few years, Hong Kong and Shenzhen have experienced an explosive growth in the start-up support ecosystem. The GEM Hong Kong and Shenzhen Report 2016-17 shows that the start-up rates recorded a staggering increase in Hong Kong and Shenzhen from 2009 to 2016. In mid-2016, the early-stage entrepreneurial activity among the adult population was estimated at 9.44 percent (3.64 percent in 2009) in Hong Kong and 16.04 percent (4.8 percent in 2009) in Shenzhen.
The growth has been driven by a rapid increase in Shenzhen’s new (+284 percent) and Hong Kong’s growth in nascent businesses (+206 percent) in comparison with 2009 statistics. The prevalence rates of established businesses recorded an increase as well: +389 percent for Shenzhen and +109 percent for Hong Kong. It is worth noting that while entrepreneurship rates are on the rise in Hong Kong and Shenzhen, they are declining in other places in China. Both cities have developed a separate start-up culture and entrepreneurial ecosystem that operate independently from the rest of the Mainland.
The positive changes were not limited to early entrepreneurship rates only. The research team also observed a major shift in attitudes and entrepreneurial intentions. In particular, 56.8 percent of the adult population perceives start-up opportunities in Hong Kong. In Shenzhen, the same proportion of individuals who declared they possessed necessary skills and knowledge to start a new business (35.8 percent), also reported their intention to start a business in the next two years (36 percent).
Comparing to 2009, the population with entrepreneurial intentions in Hong Kong grew from 7.3 percent to 19.7 percent in 2016, representing an impressive increase of +170 percent. Similarly, in Shenzhen the intentions grew from 17.6 percent to 36 percent, an increase of +105 percent. According to the study, cultural conditioning and attitudes towards entrepreneurship, perception of own skills, and exposure to entrepreneurship practices all had a positive impact on intentions to start businesses. Successful entrepreneurs are also regaining their high status and are promoted by local media in Shenzhen and Hong Kong.
In terms of financial support, Hong Kong early-stage firms have lower capital requirements than that of their Shenzhen counterparts, which may be related to the lower technological intensity of Hong Kong firms. 92 percent of nascent entrepreneurs in the two cities declared that their principal source of financial support was their own savings. The role of the family in financing new ventures is still significant in Shenzhen, but not so much in Hong Kong.
Banks are also more supportive of startups in Shenzhen than in Hong Kong and so are venture capitalists, which could be explained by a higher prevalence of start-ups with profound market impact. In Hong Kong, on the other hand, crowdfunding is more prevalent as the source of capital for early-stage businesses, a sign of a more established product innovation.
Aligned with higher entrepreneurship rates, the research team also found a growing culture of informal investors developing in both cities. Shenzhen observed a much higher informal investment prevalence rate (20.5 percent) than Hong Kong (6.5 percent) of the adult population. In fact, Hong Kong and Shenzhen informal investors were two of the most generous among all economies in the study with a contribution of US$70,565 and US$76,112 respectively.
The study has also recorded a dramatic change in investment patterns for Shenzhen. While in 2009 individuals were rather investing in family members, in 2016, friends and neighbors had been the first choice which was aligned with that of Hong Kong.
In addition, the research team interviewed 39 Hong Kong and 37 Shenzhen experts in the field of entrepreneurship about their opinions on how the cooperation between Hong Kong and Shenzhen that would increase the cities’ international competitiveness. The most frequent recommendation was to leverage the natural industry compatibilities between Hong Kong and Shenzhen. Other recommendations include:
- Joint development of industries such as Internet-of-Things, Smart City, Health Tech, Edu Tech, Fintech or E-commerce
- Joint R&D initiatives aiming at cross-border innovation, sharing of talents and intensification of knowledge exchange
- Introduction of joint or cross-border education to develop a shared cultural understanding of each other through opening more world-class academic institutions catering to students from both sides of the border
- Coordinating government policies for entrepreneurship between the two economies, e.g. joint visas for entrepreneurs that would facilitate cross-border operations of many start-ups
“If Hong Kong and Shenzhen join forces in the formation of complementary advantages on entrepreneurship, it would strengthen the international and Mainland competitiveness for both,” said Prof. Kevin Au, Associate Director of CUHK CfE and Associate Professor of the Department of Management at CUHK Business School. “This can be the first step towards the development of the Hong Kong-Shenzhen megalopolis.”
“Hong Kong and Shenzhen are facing a fantastic opportunity: that of being in the perfect position to build a highly unique and internationally competitive start-up hub with an unparalleled ecosystem compatibility between the two cities and a supportive informal investment culture,” said Dr. Marta K. Dowejko, Research Assistant Professor in Entrepreneurship of the Department of Management at HKBU School of Business. “While Shenzhen’s start-ups are well geared to deliver innovative ideas with high growth potential, Hong Kong’s entrepreneurs possess the know-how in taking ideas to the next level and ensuring their long-term sustainability. The results from this year’s GEM report give testament to this unique setup that no other place in the world has.”
# # #
Robert Hoskins
(512) 627-6622
@Crowdfunding_PR
Mr. Robert Hoskins is a seasoned marketing veteran with a proven track record of helping entrepreneurs, startups, small businesses as well as Fortune 500 corporations launch successful marketing communications campaigns to gain market traction for a wide variety of products and services.
On a regular basis, Mr. Hoskins consults with crowdfunding campaign managers as well as crowdfunding sites, portals and platforms to deliver successful crowdfunding marketing campaigns.
Google search “Robert Hoskins Crowdfunding” to see why Mr. Hoskins is considered one of the industry’s foremost crowdfunding experts that has amassed a huge social media following, which is dedicated to supporting donation-, rewards- and equity-based crowdfunding campaigns.
China, India and the US to Dominate the Global Digital Fintech Platform Economy; Much of Europe Lags Behind
19 SepMajority of Businesses and Economies Are Not Ready for Digital Platforms, Accenture Research Shows
New York, New York – Research released by Accenture (NYSE:ACN) reveals that despite the potential for small and traditional businesses to become successful digital fintech platform companies, as few as 10 percent of new start-ups focused on digital platform business models will become profitable independent entities in the coming years. The analysis also reveals that China, India and the U.S. will dominate the platform economy by 2020, and that the gulf between countries will increase. To help bridge this gap, the report outlines five critical steps businesses and governments can take to succeed.
Five Factors for a Successful Digital Fintech Platform Ecosystem
Accenture’s report Five Ways to Win with Digital Platforms, published in collaboration with the G20 Young Entrepreneurs’ Alliance, assesses the ability of 16 G20 economies to support the flourishing of digital platforms. It shows that the UK and Germany join China, India and the U.S. at the top of the Accenture Platform Readiness Index, but other emerging markets and European economies are predicted to lag behind, lacking sufficient business and socio-economic enabling conditions.
“When you think of digital platforms, think of China and India as much as the U.S. These economies are using the power of platforms to create large scale markets very rapidly,” said Paul Daugherty, Accenture’s Chief Technology Officer. “Many European economies are in danger of missing out in the platform economy. Multi-stakeholder cooperation is required to address the fragmented digital markets and to support the greater levels of digital enterprise and consumption that successful platform businesses need.”
Accenture’s analysis shows $20bn was invested in digital platforms between 2010 and 2015 in 1,053 publicly announced deals. More than half of this investment took place between 2014 and 2015. It also shows that rankings on the Platform Readiness Index strongly correlate to the levels of digital platform activity and investment in G20 countries.
The report recommends that governments engage with businesses leaders to advance a range of policies that can create a rich enabling environment for digital platforms including the following actions:
|
1. |
Prioritize data protection standards and rules: Drive the harmonization of data privacy and data security legislation. Smooth cross-border data transfers. |
||
|
2. |
Design regulations with digital platforms in mind: Experiment with regulations alongside new technologies and business models. For instance, the U.K.’s Financial Conduct Authority’s “regulatory sandbox” allows start-ups to test ideas without immediately incurring all the normal regulatory consequences. |
||
|
3. |
Encourage cross-border electronic trade. Harmonize taxes and standards, consumer protection, contract laws and logistics infrastructure. The eWorld Trade Platform (eWTP), initiated by B20 China, aims to accelerate international policy collaboration to support SMEs.1 |
||
|
4. |
Invest in digital infrastructure: For example, the E.U.’s Payment Services Directive (PSD2) will empower start-ups to expand customer reach and encourage innovative business models. |
||
|
5. |
Think small, act big: Educate SMEs on alternative funding, such as crowdfunding and peer-to-peer lending; and on data privacy and consumer protection. Support SMEs with digital economic zones to support e-commerce. |
||
Five ways to succeed
Accenture notes that only 15 percent of Fortune 100 companies have developed digital platform business models to date Successful digital platforms will proliferate as small businesses and traditional industries follow the lead set by digital-born platform companies. Accenture identifies five factors critical to sustaining critical mass in digital platforms, which use new technologies to create large scale markets of customers and service providers:
|
1. |
Proposition: Create differentiated platform services that extend beyond the point of transaction; and that support both customers on the demand side and service providers on the supply side. |
||
|
2. |
Personalization: Target customers through tailored experiences across all channels, using customer data to anticipate needs and offer bespoke experiences. |
||
|
3. |
Price: Apply new pricing models, such as pay-as-you-go, ‘freemiums’, and subscription pricing to respond to peak demand. |
||
|
4. |
Protection: Embed trust at the heart of the platform, using both prevention and compensation techniques to attract customers and differentiate the platform. |
||
|
5. |
Partners: Scale the platform rapidly by identifying digital partners – such as app developers and payment service providers – who can enrich the platform experience and fulfill customer needs. |
||
“Digital platforms are not just the preserve of digital born companies, like Airbnb and Alibaba, but are now becoming a default business model in most industry sectors, both B2B and B2C,” said Francis Hintermann, managing director, Accenture Research. “To enjoy efficiencies and high rates of growth, companies will need to transform everything from the way they co-create goods and services with third parties, tailor their offerings to customers, and price them dynamically. Crucially, they will only sustain critical mass by working with digital partners who can deliver the range of functional services that complete the customer experience.”
# # #
(512) 627-6622
@Crowdfunding_PR
Mr. Robert Hoskins is a seasoned marketing veteran with a proven track record of helping entrepreneurs, startups, small businesses as well as Fortune 500 corporations launch successful marketing communications campaigns to gain market traction for a wide variety of products and services.
Mr. Hoskins consults on a regular basis with crowdfunding campaign managers as well as crowdfunding sites, portals and platforms to deliver successful crowdfunding marketing campaigns.
Mr. Hoskins is one of the crowdfunding industry’s foremost crowdfunding advocates and has amassed a huge social media following that is dedicated to supporting donation-, rewards- and equity-based crowdfunding campaigns. Due to the overwhelming demand from the general public for crowdfunding information, he empowers entrepreneurs with some of the internet’s most affordable ($20) online crowdfunding training classes, which provide insight to startups around the world on a 24 x 7 basis.
What New Title III Investors Should Be Trying to Learn Before Making Their First Crowdfunding Investment
4 MayWhether You Are One of the 188 Million New Non-Accredited Investors or a Small Startup or Existing Business that Wants to Learn More about Issuing a Title III or Title IV Reg. A+ Equity Crowdfunding Campaign You Should Read through All of the Information Below
Austin, Texas (May 2, 2016) – The best way to educate yourself on the Title III investment/investing marketplace is to perform a thorough competitive analysis on all of the Top Equity Crowdfunding Sites and/or the Top Reg. A+ Equity Crowdfunding Sites in the United States, the United Kingdom and Israel, which is where most of the top crowdfunding platforms are based.
A Crowdfunding Guide to Risks, Returns, Regulations, Funding Portals, Due Diligence, and Deal Terms
Our Top 100 Crowdfunding Lists are based on website traffic, which should be a first step in determining how many eyes are being delivered by every site. This will highlight how many crowdfunding campaigns are being launched as well as how many investors are visiting the equity crowdfunding site on a monthly basis.
There has been a great deal of content generated that covers that the Title III Equity Crowdfunding rules that will begin on May 16, 2016 so I will skip repeating the basic information. Up until the past 12-months not much has been written about how to evaluate the up an coming Title III equity crowdfunding deals.
So the purpose of this article is provide lots or relevant documentation that has been written by leading university legal departments and law firms that will soon be guiding investors and issuers through the process of issuing Title III and Title IV Reg. A+ equity crowdfunding securities.
Great Equity Crowdfunding Research Articles:
1. The Coming ‘Transformation’ in Private Capital Markets – This article provides a really good overview of the equity crowdfunding industry to date.
2. Duke Law School – The Social Network and the Crowdfund Act: Zuckerberg, Saverin, and Venture Capitalists’ Dilution of the Crowd – This provides really good a good overview of how to avoid stock holder dilution and making sure that early stockholders are included fair and justly in every exit strategy. It also provides examples of how Zuckerberg diluted one of his business partners right out of the Facebook fortune.
TABLE OF CONTENTS
- CROWDFUNDING OVERVIEW
A. The Five Models of Crowdfunding
B. Examples of Crowdfunding
C. The Transformative Power of Crowdfunding - POLITICAL INFLUENCES
A. Securities-Law Prohibitions on Crowdfunding
B. Democratic Push for Crowdfunding
C. Crowdfunding under the JOBS Act - THEORETICAL TENSIONS
A. Paternalistic Impulses: The Rule 504 Lesson
B. Securities Regulation: Disclosure vs. Merit Review - VENTURE CAPITALIST ELITES AND THE MASSES
A. Vertical and Horizontal Risks
B. Downside and Upside Risks
1. Financing Rounds, Exits, and Protecting Crowdfunders
a. Price-Based Anti-Dilution Protection
b. Shares-Based Anti-Dilution Protection
c. Tag-Along Rights
d. Preemptive Rights
5. QUALITATIVE PROTECTIONS FOR CROWDFUNDERS
A. Contractual Provisions
B. Venture Capital–Deal-Terms Disclosure Table
C. Congressional and Regulatory Action
CONCLUSION
3. Harvard Business Law Review – Equity Crowdfunding: The Real and the Illusory Exemption – This document has a good section that discusses investment syndicates and why novice investors should follow lead angel investors until they get the hang of assessing crowdfunding securities risk.
TABLE OF CONTENTS INTRODUCTION
I. BACKGROUND
A. An introduction to crowdfunding
B. The rationale for a new exemption
C. The legislative history of the retail crowdfunding exemption
D. The quiet compromise
II. TWO CROWDFUNDING EXEMPTIONS COMPARED
A. Affordability in small offerings
B. Access to potential investors
C. Investor protection
D. Summary and implications
III. AN INCENTIVES-BASED THEORY OF INVESTOR PROTECTION
A. The public theory and retail crowdfunding
B. The private theory and accredited crowdfunding
C. A theory to describe the spectrum
IV. ASSESSING POTENTIAL SEC ACTION
A. Pooled investments managed by a lead investor
B. Public company regulation
C. Verification
D. Liquidity risk
E. Integration and aggregation
F. Substantial compliance
G. The accredited investor definition
V. RECOMMENDATIONS
A. Strengthen accredited investor bargaining power
B. Encourage retail investors to piggyback
C. Harmonize the resale and substantial compliance rules
D. Generate empirical data and conduct a special study
CONCLUSION
4. David M. Freedman and Matthew R. Nutting – Equity Crowdfunding for Investors: A Guide to Risks, Returns, Regulations, Funding Portals, Due Diligence, and Deal Terms, which I have not read, but the following paragraph descriptions definitely look worth reading while learning the the Title III equity crowdfunding securities investment process.
Preface: The New Angel Investors
In 1977, Mike Markkula became the first angel investor in Apple Computer. His $80,000 stake in Apple grew into about $200 million when the company went public three years later. Few opportunities can generate personal wealth as profoundly as being a founder or early investor in a startup that achieves that sort of grand success. Before 2012, however, angel investing was strictly limited to wealthy and extremely well connected people. Thanks to Title III of the JOBS Act of 2012, tens of millions of average investors will, for the first time in several decades, have an opportunity to invest in growing startups and early-stage companies via equity crowdfunding portals. This book covers not only Title III crowdfunding, but Regulation D offering platforms and intrastate securities exemptions (in at least 18 states) as well.
Chapter 1: The Foundations of Online Crowdfunding
Internet crowdfunding gained traction around 2003, starting with rewards-based platforms like ArtistShare, Kickstarter, and Indiegogo. They were followed by donation-based platforms like GoFundMe. Securities (debt- and equity-based) offering platforms launched around 2011 in the United States. Equity offering platforms were still open to accredited investors only, however. The JOBS (Jumpstart Our Business Startups) Act of 2012 legalized a new form of equity crowdfunding for all investors regardless of income or net worth. This chapter clarifies the differences between the various kinds of crowdfunding and provides lessons for investors about risk, reward, fraud prevention, and the wisdom of the crowd.
Chapter 2: Equity Offerings under Reg. D
Starting in 2011 in the United States, startups and early-stage companies began offering securities to accredited investors through Web-based offering platforms, under Rule 506 of Regulation D. Issuers could raise an unlimited amount of equity capital via Reg D platforms. Title II of the JOBS Act of 2012 lifted the ban on general solicitation for offerings made under new Rule 506(c). We profile two pioneers in Reg D offering platforms: MicroVentures (focusing on tech startups) and CircleUp (focusing on earlystage consumer products and retail companies).
Chapter 3: Equity Crowdfunding for All Investors
Title III of the JOBS Act of 2012 created a legal framework for equity crowdfunding, whereby all investors (not just wealthy “accredited” investors) can buy securities issued by startups and early-stage companies. The regulations limit the amount of money investors can invest in equity crowdfunding offerings each year, based on their income and/or net worth.
Chapter 4: Intrastate Crowdfunding, Non-accredited Investors
At least a dozen states got a jumpstart on equity crowdfunding, using the “intrastate exemption” to initiate regulatory frameworks for in-state equity crowdfunding. Georgia was the first U.S. state in which an equity crowdfunding portal successfully funded a startup with participation of non-accredited investors.
Chapter 5: Deal Flow
What kinds of companies will offer equity shares on Title III crowdfunding portals? Will they really have high growth potential and be worth investing in? Will there be a big enough supply of offerings to meet the demand of tens of millions of new angel investors? In this chapter we forecast what kinds of companies— in terms of industry, development stage, growth potential, and other characteristics—will represent the most attractive Title III deals for all (including non-accredited) investors.
Chapter 6: Angel Investors
In depth, we discuss the benefits, returns, costs, and risks of investing in startups and early-stage companies via equity crowdfunding. The possibility of earning spectacular return on investment (even if not very likely) is one attraction of angel investing. We discuss how the emergence of equity crowdfunding creates a new class of angel investors, with some of the same motives and benefits as traditional angels but some new ones, too—especially social benefits.
Chapter 7: How to Navigate through Title III Offerings
This chapter offers a glimpse behind the scenes of equity crowdfunding portals—how they are regulated, the difference between “funding portals” and broker-dealer platforms, how they decide whether to approve or reject issuers’ applications, how investors communicate with each other, and using an investor dashboard.
Chapter 8: How to Invest, Part 1: Portfolio Strategy
A three- to five-year plan for building an equity crowdfunding portfolio Investing in private securities, including Title III offerings, is one way to diversify your investment portfolio. This chapter helps you decide what percentage of your portfolio assets should be devoted to “non-correlated” alternative assets like Title III offerings; identify your primary motives for investing in startups and early-stage companies so you can narrow down the kinds of offerings that you consider; create an equity crowdfunding budget, pinpointing the amount of money that you can invest each year over three to five years; and build a diversified equity crowdfunding portfolio.
Chapter 9: How to Invest, Part 2: Identify Suitable Offerings
How narrow down your choice of Title III offerings, based on your selection criteria—the first of which is identifying your social, personal, and/or financial motivation for investing in startups and early-stage companies.
Chapter 10: Equity Crowdfunding Securities
Title III equity offerings are predominantly C corporation stock, limited liability company membership units, and convertible debt. This chapter covers the fundamentals of each of those securities (including both common and preferred stock), and their advantages and drawbacks for both issuers and investors.
Chapter 11: Deal Terms
We provide concise explanations of the terms of private securities deals, in four categories: economic terms (like price per share, minimum investment, fully diluted valuation, etc.); control terms (protective provisions, veto power, etc.); terms relating to liquidity events and future financing (liquidation preferences, anti-dilution provisions); and other terms (conversion rights, dividends, redemption rights, right of first refusal, etc.).
Chapter 12: How to Invest, Part 3: Due Diligence
How to research an issuer’s management team, financial reports, revenue projections, business strategy, regulatory compliance, and other key indicators. You have the option of conducting due diligence independently, relying on a sophisticated “lead investor,” hiring a professional adviser, and/or collaborating with members of the crowd through on-platform discussions and Q&A forums.
Chapter 13: How to Invest, Part 4: Funding and Post-funding
We talk about the on-platform investment transaction, your rights and obligations as a shareholder, and how to monitor and manage your equity crowdfunding portfolio.
Chapter 14: Liquidity and Secondary Markets
Equity crowdfunding securities are relatively illiquid, especially in the first 12 months that you hold the investment. Secondary markets will probably develop over the next few years to provide liquidity to Title III securities. We look back at how secondary markets developed for accredited investors in the past 10 years, and project how they might develop for all investors in the near future.
5. Charting a New Revolution in Equity Crowdfunding: The Rise of State Crowdfunding Regimes in the Response to the Inadequacy of the Title III JOBS Act – Good analysis of intrastate crowdfunding exemptions.
6. The Next British Invasion is Securities Crowdfunding: How Issuing Non-Registered Securities through the Crowd Can Succeed in the United States – Good analysis of equity crowdfunding in the U.K.
7. Breaking New Ground: The Americas Alternative Finance Benchmarking Report – Research report on peer to peer lending, another form of alternative finance.
# # #
(512) 627-6622
@Crowdfunding_PR
Mr. Hoskins is a seasoned marketing veteran with a proven track record of helping entrepreneurs, startups, small businesses as well as Fortune 500 corporations launch successful marketing communications campaigns to gain market traction for a wide variety of products and services.
Hoskins is one of the crowdfunding industry’s foremost crowdfunding advocates and has amassed a huge social media following that is dedicated to supporting donation-, rewards- and equity-based crowdfunding campaigns. Due to the overwhelming demand from the general public for crowdfunding information, he empowers entrepreneurs with some of the internet’s most affordable ($20) online crowdfunding training classes, which provide insight to startups around the world on a 24 x 7 basis.
Hoskins adamantly believes that the crowdfunding industry will empower everyone in the United States to rediscover the possibility of living the American dream with a little hard work, a great business idea and the dedication to researching, planning and launching a well-thought-out crowdfunding campaign. He consults on a regular basis with crowdfunding campaign managers as well as crowdfunding sites, portals and platforms to deliver successful crowdfunding marketing campaigns.
The Narative Advantage: Why Women Are More Successful than Men at Crowdfunding Because of the Language They Use to Describe Their Projects
9 FebA leading crowdfunding research report from Andreea Gorbatai, UC Berkeley, and Laura Nelson, Northwestern University, details why women are better at crowdfunding because of the language they use in their crowdfunding campaigns
Austin, Texas – According to a new crowdfunding research report, it is not what you say, but the words you use to say it when communicating the features and benefits of a crowdfunding campaign. If you are researching how to launch a successful Kickstarter or Indieogogo crowdfunding campaign, we highly recommend that you read both “The Narrative Advantage: Gender and the Language of Crowdfunding” and “The Language that Gets People to Give for Successful Kickstarter Campaigns.” These research reports will greatly enhance your ability to use the most effective and persuasive language possible to reach donors and investors and instill a desire to support your crowdfunding campaign.
Here is an introduction to what the crowdfunding research report covers:
“Economic and social arrangements in markets and organizations have been shown to systematically disadvantage women across a wide range of outcomes ranging from hiring, performance evaluations, rewards, and promotion in the labor market to financial support in the capital market. Research has identified several mechanisms through which this inequality is perpetuated, ranging from homophily, tokenism and structural constraints to negative stereotyping and women’s own beliefs about their skill level and worth in the labor market.
The Narrative Advantage Gender and the Language of Crowdfunding
In particular, research on financing, small business, and entrepreneurship has shown that women are at a marked disadvantage compared against men with similar skill and experience levels. This difference has been largely attributed to choice homophily among predominantly male funders, and to the type of businesses that women start.
In the venture capital industry, male venture capitalists acts as gatekeepers; this results in less funding and mentorship for female entrepreneurs. In other entrepreneurial ventures, women gravitate towards small business ventures where they are often the sole employee instead of choosing scalable business projects.
In all these contexts, the long term outcomes – financing, and the terms of the financing deals – are the results of many difficult to quantify factors resulting from the interaction between the funder and the entrepreneur. It is thus difficult to isolate the effects that non-verbal behavior, paralinguistic cues, contextual factors, and interactions between the entrepreneur and the funder have on the final decision regarding funding. Some of these factors have been studied experimentally in the laboratory (Brownlow and Zebrowitz 1990; Carney, Cuddy and Yap 2010; Kramer 1977).
The majority of these studies rely on evaluating the effect of these factors on the audience, controlling for language content. But the language we use is intimately connected to how we think, and how others evaluate what we are saying. Moreover, language is connected with socio-demographic characteristics of the speaker or writer, such as gender, age or occupation.
In this study we aim to examine the effect of language on the success of crowdfunding campaigns, and the relationship between linguistic content and gender. Online, text-based campaigns are ideal for examining the effect of language content apart from characteristics of the delivery medium, message sender, and audio-visual information because the message is delivered to the potential donors via an information-poor, asynchronous text interface.
In turning our attention to the language used in crowdfunding campaigns, we examine four different dimensions of language content in campaign descriptions: positive (sentiment) language, vividness, inclusive language, and business language. We then suggest that three of these types of linguistic content (positive sentiment, vividness and inclusive language) are both more likely to be rewarded in crowdfunding campaigns, and more likely to be used by women, while the use of language related to money is more likely to be penalized in the crowdfunding context and more likely to be used by men. We then test and confirm our theory that language mediates the relationship between gender and fundraising outcomes using data from the online crowdfunding site Indiegogo.
Our findings indicate that gender-specific language partially mediates the success of women in fundraising money through crowdfunding. This study identifies an economic institution (crowdfunding) where female-specific linguistic patterns are preferred over male- specific patterns, leading to a reversal in gender inequality with respect to funding.
Additionally, this study contributes to economic sociology research on gender by quantifying the impact of linguistic choices on fundraising outcomes. Lastly, this research contributes to research in computational sociology by employing topic models to refine the product classification of crowdfunding campaigns and quantify crowdfunding campaign text along several content dimensions using the Linguistic Inquiry Word Count dictionary (Tausczik and Pennebaker 2010).”
An outline of the report:
Theory and Hypotheses:
Introduction
Money and Language
1a. Crowdfunding proposal success decreases with the use of money-related language.
1b. Crowdfunding proposal success increase with the use of vivid language.
1c. Crowdfunding proposals success increases with positive emotion.
1d. Crowdfunding proposal success increases with the use of inclusive (relational) language.
Gender and Language
2a. Women use more inclusive language than men do.
2c. Women use more vivid language than men do.
2d. Women use less language related to money than men do.
Language, Gender and Crowdfunding Success
3. Language mediates the relationship between gender and fund-raising success.
Conclusion
# # #
(512) 627-6622
@Crowdfunding_PR
Mr. Hoskins is a seasoned marketing veteran with a proven track record of helping entrepreneurs, startups, small businesses as well as Fortune 500 corporations launch successful marketing communications campaigns to gain market traction for a wide variety of products and services.
Hoskins is one of the crowdfunding industry’s foremost crowdfunding advocates and has amassed a huge social media following that is dedicated to supporting donation-, rewards- and equity-based crowdfunding campaigns. Due to the overwhelming demand from the general public for crowdfunding information, he empowers entrepreneurs with some of the internet’s most affordable ($20) online crowdfunding training classes, which provide insight to startups around the world on a 24 x 7 basis.
Hoskins adamantly believes that the crowdfunding industry will empower everyone in the United States to rediscover the possibility of living the American dream with a little hard work, a great business idea and the dedication to researching, planning and launching a well-thought-out crowdfunding campaign. He consults on a regular basis with crowdfunding campaign managers as well as crowdfunding sites, portals and platforms to deliver successful crowdfunding marketing campaigns.
University of Oxford’s Saïd Business School Announces 18-Month Crowdfunding Research Study that Will Explore How and Why Investors Decided to Invest in Successful Equity Crowdfunding Campaigns
21 Jun
Kauffman Foundation and Nesta Grants, Nir Vulkan, Associate Professor of Business Economics at Saïd Business School, funding explore the business of successful equity crowdfunding
Oxford, United Kingdom – The equity crowdfunding market is worth over £50 million a year in the UK, doubling in size last year as an increasing number of individuals look for an alternative place to invest their capital. Despite its size however, there is very little research into market dynamics, the success of campaigns to attract funding and the associated risks.
Seedrs makes it simple to buy into the businesses you believe in and share in their success
Nir Vulkan, Associate Professor of Business Economics at Saïd Business School, University of Oxford, has been granted funding from the Kauffman Foundation and Nesta to explore the business of equity crowdfunding. Working with Thomas Åstebro from HEC Paris, the 18 month project will explore the criteria for success for crowdfunders and how investors make decisions on what projects to back.
“We are looking to find out how investors react when presented with different information about an investment,” said Nir Vulkan. “Do they respond more strongly to information about the founding team, to company milestones, existing investors, or previous sales made? We will be able to understand what generates success and what leads to failure, and this will have important implications for companies looking for investment of money and community expertise. More broadly our findings will be of great importance for regulators and governments both in the UK and internationally looking at the benefits and risks associated with the crowdfunding sector.”
The study is being conducted on Seedrs, one of Europe’s leading equity crowdfunding platforms. Seedrs matches investors with businesses seeking capital, conduct due diligence on the businesses, executes the investment transactions and acts as nominee on behalf of investors to protect their rights.
Seedrs was founded by Oxford MBA alumni Jeff Lynn and Carlos Silva, who worked on the idea for the company as part of their Entrepreneurship Project at Oxford Saïd, mentored by Vulkan, before it was launched in July 2012. On average, over £2 million is invested through Seedrs per month, and in 2013 it became the first crowdfunding platform for equity investments to allow cross-border fundraising rounds across the EU. Seedrs has made over 2.5 years of historical data, on an anonymized basis, available to Vulkan and Åstebro for the project.
Jeff Lynn, CEO and co-founder of Seedrs, said, “It’s a great honor to work with my former Oxford tutor, Nir Vulkan, along with Thomas Åstebro on this project. Equity crowdfunding is only in its infancy, and I expect their research to prove highly valuable for practitioners and observers alike as the space continues to grow rapidly in coming years.”
# # #
YouGov Omnibus Research Reports Donors 45% More Likely to Give Crowdfunding Donations to Individuals in Need, Not Charities or Causes
4 MayGoFundMe now dominates the crowdfunding space, with 41% of Americans aware of the site; IndieGoGo comes in at number two at 13%
New York, NY – According to the latest YouGov Omnibus research crowdfunding’s charitable sweet spot focuses squarely on donations to individuals in need. For those who have donated via crowdfunding sites, 45% have given to an individual person in need, compared to only 22% who have given to a charity like the Red Cross, or 20% who have given to social causes like homelessness. 16% have given to disaster relief or individual animals in need. Global environmental causes garnered only 12% amongst crowdfunding donors.
YouGov OmniBus Research Report on Crowdfunding Donations
By contrast Americans who donate via any channel say the single channel they are most likely to donate to is a charitable organization (25%) compared to 17% who prefer to give to individuals.
Charities Still Most Effective Use of Funds: Politicians Least Effective
In terms of effectiveness, more than half of Americans who donate via any channel (52%) think that the most effective home for a donation is a charitable organization. Nearly a third (32%) think gifts to individuals are the most effective.
Practically nobody (2%) thinks that politicians are the most effective recipients of donations intended to promote a cause.
Most Popular Crowdfunding Sites
GoFundMe now dominates the crowdfunding space, with 41% of Americans aware of the site; IndieGoGo comes in at number two at 13%. Millennials are more aware of their crowdfunding options with 47 % awareness for GoFundMe and more than one in five (21%) aware of IndieGoGo.
For all those who have heard of a crowdfunding site 20% have given money via GoFundMe. Higher earners (32%) and women (25%) are most likely to have contributed to a GoFundMe campaign.
A quarter (24%) of all American adults have been invited to contribute to a crowdfunded charity via social media. A further 16% has received solicitations via email.
# # #
Leading Crowdfunding Research Industry Analyst Firm Forecasts $34.4 Billion Global Industry Growth in 2015
31 MarMassolution crowdfunding research reports that crowdfunding portals raised $16.2 billion in 2014, a 167% increase over the $6.1 billion raised in 2013
Los Angeles, California – Crowdfunding is accelerating at an unprecedented rate and impacting government policy, informing enterprise innovation, and changing the role of financial institutions around the world. Massolution, the leading research firm in world that specializes in reporting on the growing crowdfunding industry, released its annual 2015CF – Crowdfunding Industry Report.
2015 Crowdfunding Industry Report Covering the United States, Europe, Asia, South America, Oceania and Africa
After collecting data on 1,250 active crowdfunding platforms (CFPs) worldwide and undertaking significant further research, the results reveal that CFPs raised $16.2 billion in 2014, a 167% increase over the $6.1 billion raised in 2013.
North America still accounts for the largest market but 2014 saw Asia overtake Europe, by a small margin. With exponential growth in Asia, Massolution forecasts this lead will increase significantly in 2015 with the delta between Asia and Europe increasing to over $4 Billion.
The report predicts that Europe’s 20.1% of market share in 2014 will decline slightly in 2015 when Europe will account for 18.8% of the worldwide market.
“In April 2013 we predicted that total crowdfunding volume by the end of 2013 would nearly double from 2012’s $2.7 billion but in fact the market reached $6.1 billion, largely due to faster growth than anticipated in Asia. Acceleration continued in 2014 achieving an impressive $16.2 billion in funding volume and we are forecasting that worldwide crowdfunding volumes will more than double again in 2015, to reach $34.4,” said Carl Esposti, Massolution’s CEO. “Surprises materializing from this year’s research included GoFundMe topping Kickstarter as the largest donation/reward based CFP and astounding growth in the P2P lending market in Asia, stemming largely from the Chinese market. Further, the top 5 CFPs in North America increased wallet share during the period 2011-14 while in Europe the top 5 lost 30% of their market share, indicating that the markets in North America and Europe are shaping up very differently.”
Growth Rates By Region in 2014
North America retained its market lead in 2014 but Asia topped Europe to become the second largest region by funding volume.
- North America: crowdfunding volumes grew 145% to $9.46 billion
- Asia: crowdfunding volumes grew 320% to $3.4 billion
- Europe: crowdfunding volumes grew 141% to $3.26 billion
- South America, Oceania and Africa grew 167%, 59% and 101%, respectively
Growth Rates By Models in 2014
The growth in funding volumes continued to be primarily driven by lending-based crowdfunding, but significant annual growth in equity-based crowdfunding and increased adoption of newer hybrid and royalty-based models indicates that the allocation of funding volume across different models will be more highly distributed over the coming years.
- Lending-based crowdfunding grew 223% to $11.08 billion
- Equity-based crowdfunding grew 182% to $1.1 billion
- Hybrid-based crowdfunding grew 290% to $487 million
- Royalty-based crowdfunding grew 336% to $273 million
- Donation- and Reward-based crowdfunding grew 45% and 84% respectively
Most Active Categories in 2014
Crowdfunding’s popularity as a way to fund creative, philanthropic, and social endeavors still prevails but crowdfunding’s application for entrepreneurial ventures began to gain significant traction over the last few years. Business and Entrepreneurship had become the lead category by 2012 at 27.4% of total crowdfunding volume and in 2014 had increased in importance, accounting for over 40% of worldwide funding volume. In 2014, the lead categories share of funding volume was:
- Business & Entrepreneurship at 41.3% / $6.7bn
- Social Causes 18.9% / $3.06bn
- Films & Performing Arts 12.13% / $1.97bn
- Real Estate 6.25% / $1.01bn
- Music and Recording Arts 4.54%/ $736m
Further insights in the 2015 Crowdfunding Research Report include:
- Historical comparison of crowdfunding’s growth 2011 through 2014
- Breakdown of Regional funding volume by model and model by region
- Top 11 performing crowdfunding categories
- Average deal size for each crowdfunding model
- Crowdfunding outlook trends: 15 major developments
- CFP leaderboards worldwide, by region and by model
- Growth in CFP numbers and worldwide distribution
- Market predictions for 2015 by region and model
Research Methodology
The 2015 – Crowdfunding Industry Report is a research report that provides a unique and in-depth analysis of crowdfunding market size, composition, trends and composition. The Crowdfunding Industry Survey, to which Massolution received 463 high-quality responses, was conducted during late 2014 and early 2015 and resulted in the most comprehensive data collection on the worldwide crowdfunding market to date. Massolution has conducted significant follow-up research via other reliable channels to complete the profiling of the global crowdfunding industry.
# # #
Manta Research Reports that Most Small Businesses are Still Unaware of Crowdfunding as an Alternative Finance Option
29 MarMost notably, 23 percent have funded a business project using an alternative lender, other than a traditional bank, but only two percent report having ever used a crowdfunding platform
Columbus, Ohio – Even though the alternative financing market is expanding at an exponential rate, a new Manta business survey reveals that two-thirds of small business owners still do not think enough funding options are available. Additionally, 69 percent feel the funding environment has not improved in the past 12 months.
Small businesses slow to jump on the alternative financing bandwagon, but interest growing
Alternative funding opportunities, including crowdfunding, are growing at a rapid rate, but the survey showcases a cautious approach by small business owners. Most notably, 23 percent have funded a business project using an alternative lender (other than a traditional bank), but only two percent report having ever used a crowdfunding platform. Lack of awareness and persistent misconceptions may be the cause.
Manta Research Reports that Most Small Businesses are Still Unaware of Crowdfunding
The majority of small business owners who have obtained traditional loans note uncertainty regarding crowdfunding and alternative lending options. Thirty percent of respondents are unsure of the risks, another 20 percent don’t understand the technology associated with these alternative sources and 14 percent report they simply do not trust them. A small number believe crowdfunding sites and alternative lenders are too complicated, while others fear business failure with less traditional financing methods (seven percent and six percent, respectively).
Traditional financing options still most popular with business owners
Manta’s survey revealed that, despite a diversifying lending environment, small business owners overwhelmingly prefer traditional financing options. More than 70 percent of respondents have sought traditional bank loans, savings, credit cards, or help from friends and family to finance their business, while less than a quarter have utilized an alternative lender (other than a bank).
“Small business owners have more diverse options today than ever before when it comes to funding their business,” said John Swanciger, CEO, Manta. “However, we’re seeing a gap between what’s available and the perception among small businesses that the lending environment has not improved. Even though traditional bank loans are difficult to secure, small businesses are still apt to rely on them.”
Of the small business owners who financed their business through alternative lenders, 38 percent did so because they did not qualify for traditional bank financing. Nearly 20 percent sought alternative lending because they needed a small short-term loan, while nine percent recognized the fast access and convenience associated with alternative lending options, and seven percent wanted ongoing access to a credit line.
The survey results also showed that when small business owners received alternative financing, the amounts they borrowed varied greatly. Most (40 percent) borrowed $10,000 or less. Others aimed higher, with 27 percent borrowing $50,000 or more. Remaining respondents were split — 17 percent borrowed $10,000 – $20,000 and another 17 percent borrowed $20,000 – $50,000.
# # #
New Crowdfunding Research Firm Wants to Shine Light on Best Practices for Shooting the Perfect Indiegogo/Kickstarter Crowdfunding Pitch Video
14 AugIn their new research study, Understanding the Effectiveness of the Pitch Video: A Crowdfunding Research Study, the team plans to measure the effectiveness of crowdfunding pitch videos and their impact on online fundraising
Sydney Australia – What type of pitch video helps crowdfunding campaigns achieve success or lead to their failure? That’s what the folks at DigitalMindWorx want to research and document. In their new research study, Understanding the Effectiveness of the Pitch Video: A Crowdfunding Research Study, the team plans to measure the effectiveness of crowdfunding pitch videos and their impact on online fundraising. Conducted by Jess Milne, a Masters student at the Australian Film Television and Radio School in Sydney, the upcoming research study will use an online survey to collect quantitative data that will help inform future creators on how to how to make a compelling pitch video based on past Kickstarter and Indiegogo success/failure rates.
Understanding the effectiveness of the pitch video: A Crowdfunding Research Study
“There is very little research in the crowdfunding arena,” said Jess Milne Masters, a film student. “The pitch video is the most persuasive tool available to crowdfunders I think more research insights are required to help crowdfunders make better and more effective videos.”
According to some sources, such as the Indiegogo Playbook, including a video with a crowdfunding campaign to demo the product and explain the project can increase fundraising by 115%.
Kickstarter, another popular crowdfunding platform, reported that campaigns with a pitch video succeed at a much higher rate than others (50% vs 30%).
Last, but not least, MWPDigitaMmedia, a professional video production company, reports that projects that have a good crowdfunding pitch video are 85% more likely to achieve their fundraising goal.
“The aim of our research is to relate how the pitch video in a crowdfunding campaign can incite affective and emotional responses in the viewer and ultimately influence the decision to pledge to the campaign,” Masters continued.
With an estimated 49,000 launched projects in 2013 on Kickstarter alone, this research has the opportunity to make a big impact for entrepreneurs and creative types. After data has been collected the unbiased conclusions will be released in a guidebook for filmmakers and other individuals who want to lean how to create a compelling crowdfunding pitch video.
As an incentive all participants of the study will have the chance to win a 200 iTunes voucher after completing the research survey. Click here to participate in the Crowdfunding Pitch Video Research Study, which will be open to all participants until October 1, 2014.
# # #
Crowdfunding PR, Social Media & Marketing Campaigns 
You must be logged in to post a comment.