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Crowdfunding Expected to Drive Alternative Financing Market to More than $150 Billion by End of Year 2015

14 Apr

By Robert Hoskins

The TABB Group has released a new crowdfunding research report entitled “Capital Reformation: Alternative Financing and the Fate of Intermediaries,” which examines the emerging business models that are enabling smaller investors to provide short- and long-term funding for small- and mid-sized enterprises (SMEs) that account for over 99% of the companies in most economies.

Crowdfunding Expected to Drive Alternative Financing Market to More than $150 Billion by EOY 2015

Crowdfunding Expected to Drive Alternative Financing Market to More than $150 Billion by 2015

“Wall Street is no longer a protected class,” says Adam Sussman, a TABB partner, director of research and co-author with contributing analyst Deepali Nigam. “Intermediaries’ roles and business models are shifting, focusing on platforms, aggregation and agency, resulting in a reformation in how capital markets will function, with alternative financing stepping up.”

The new research study explores the intersection of the SME funding market and emerging alternative financing mechanisms. It reviews the causes of declines in the bank loan sector, the regulatory changes enabling new forms of financing and the impact of those changes on traditional capital markets intermediaries, including investment banks and exchanges.

TABB currently estimates that alternative methods have raised $47 billion for SME’s globally, but “this is a small fraction of the overall SME market,” says Nigam. Current regulatory and secular trends are expected to drive this market to over $150 billion by EOY 2015. At the heart of this capital reformation is a mechanism that allows investors to connect with each other and to the issuer, a trend called crowdfunding.

Under the new JOBS Act in the US, crowd funding allows a company to pool up to $1 million from investors without registering with the SEC, or up to $2 million if the firm provides the SEC with audited financial statements reducing costs for issuance, as long as they raise funds through a registered funding portal.

Limited in the US now to rewards- or charity-based projects, crowdfunding is a non-recourse, pre-payment mechanism, but its premise is to attract investors to different types of SMEs – start up, growth, expansion and rebirth. Different existing and emerging crowdfunding platforms serve different types of investing strategies, such as reward, debt and equity. The TABB report lists eight leading sites in the US, the UK, Germany and globally.

Alternative financing poses some of the same challenges to the primary markets that automated trading posed to the secondary market, Sussman says. In the secondary market, when transaction sizes shrunk and volumes exploded, automating the workflow became a necessity. “With alternative financing, it will be necessary to automate processes because liquidity will come from a very long tail of small investors, not a few large institutions. With a large number of very small initial offerings, an efficient, fixed-cost infrastructure will be critical.”

Capital reformation is necessary, in part, Sussman says, because the capital markets are perceived to have become too focused on the secondary market, i.e. trading, rather than the primary market where the actual capital is raised. “As the exchanges and other businesses focus more on the trading of prices instead of investing in and financing businesses, the long-term needs of investors and issuers have become a less attractive market for the entire financial services industry.”

To learn more about the Crowdfunding industry and startup local Crowdfunding community outreach programs, please join our free American Crowdfunding Center on LinkedIn.com or Meetup.com and don’t forget to follow us on Twitter. Both social media sites allow platform owners and crowdfunding campaign managers to post their news and press releases into the discussion forums.

This will help us find new and exciting crowdfunding stories to cover.  We are currently covering crowdfunding topics such as Business CitiesCommunitiesCrowdfunding PlatformsEducationFilm, Music, EntertainmentGames, VideosSocial GoodSolar, Renewable Energy and Software, Hardware, Technology Gadget crowdfunding PR campaigns.

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PledgeCents Launches New Education Crowdfunding Platform to Help Schools K-12 Move to a New Level of Fundraising for Field Trips to Science

14 Apr

By Robert Hoskins

PledgeCents, a new crowdfunding website dedicated to raising funds for public schools, plans to open its doors on Saturday, April 13, at the National School Boards Association’s 2013 conference in San Diego. PledgeCents plans to connect individual investors and corporations with schools seeking alternative ways to offset recent educational funding cuts.

New Education Crowdfunding Site, PledgeCents, Launches at National School Board Association’s 2013 Convention

New Education Crowdfunding Site, PledgeCents, Launches at National School Board Association’s 2013 Convention

“Many educators we consulted said they want to fund a wide variety of micro-projects that would otherwise either be underfunded or completely eliminated. Now, teachers can create projects they need financial help on while administrators can control the process and provide oversight to ensure funding priorities are met.”

Ricky Johnson, co-founder of PledgeCents, said the new crowdfunding website will help public schools continue offering programs, services and school supplies that are desperately needed to maintain, or raise, the educational standards for children. “The slow economic recovery continues to impact school funding across the United States. Many educators are waking to the realization that they must find alternative funding for programs, services and supplies which are at risk of being cut.”

School projects which crowdfunding can help include:

  • Equipment for marching bands and athletics
  • Field trips involving tour buses or overnight lodging
  • School security personnel or monitoring equipment
  • Supplies for science labs, art or theater

“PledgeCents is open to any schools with funding needs,” said Andyshea Saberioon, co-founder and CEO of PledgeCents. “Many educators we consulted said they want to fund a wide variety of micro-projects that would otherwise either be underfunded or completely eliminated. Now, teachers can create projects they need financial help on while administrators can control the process and provide oversight to ensure funding priorities are met.”

Students can join in the fundraising activity by wearing “PledgeCents bracelets,” which come in a variety of school colors and feature a penny to remind them that “every cent counts” toward making the world a better place through education. PledgeCents will also award monthly monetary prizes to school campaigns that raise the most funds.

Unlike some crowdfunding websites, fundraising campaigns on PledgeCents will be paid to the school regardless of whether the project is fully funded.

To learn more about the Crowdfunding industry and startup local Crowdfunding community outreach programs, please join our free American Crowdfunding Center on LinkedIn.com or Meetup.com and don’t forget to follow us onTwitter. Both social media sites allow platform owners and crowdfunding campaign managers to post their news and press releases into the discussion forums. This will help us find new and exciting crowdfunding stories to cover.  We are currently covering crowdfunding topics such as Business Services,Cities/CommunitiesCrowdfunding PlatformsEducation,Film/Music/EntertainmentGames/VideosSocial GoodSolar andSoftware/Hardware Technology Gadget crowdfunding PR campaigns.

Fundly Promotes Crowdfunding-for-Good Platform to Nonprofit Technology Conference in Minneapolis

14 Apr

By Robert Hoskins

Fundly spent the weekend promoting its Crowdfunding-for-Good platform fundraising event registration features of it crowdfunding-for-good platform at the Nonprofit Technology Conference.    The new crowdfunding tools leverage fundraising, social media, and mobile applications to assist nonprofits in making their fundraising events more effective through advanced technology capabilities.

Fundly.com Crowdfunding Platform for Social Good Projects and Campaigns

Fundly.com Crowdfunding Platform for Social Good Projects and Campaigns

With thousands of nonprofit organizations, volunteer groups and individuals using Fundly’s platform for a wide range of fundraising events such as galas, dinners, marathons and other Run Walk Ride events, Fundly developed its new fundraising events application to seamlessly combine fundraising and event registration functionality into one seamless experience to make any fundraising event easier to manage and more successful.

“Think Facebook meets Eventbrite meets TeamRaiser and you’ll see why Fundly’s new fundraising events platform is so easy to use that even volunteer fundraisers who have never raised money before can succeed on their first try,” said Fundly CEO Dave Boyce.

The Fundly team that created the event fundraising platform includes the designer who built the Nike+ running app, the product manager who built Yahoo! News and the developer who built Quicken for Windows. Taking lessons learned and best practices from leading fundraisers, including Habitat for Humanity, Teach for America and Children’s Miracle Network Hospitals, Fundly’s new event fundraising platform is unparalleled in its ease-of-use and integration of fundraising, social media and mobile applications.

The launch customer for Fundly’s event fundraising platform is Orlando Health, a non-profit hospital network in Orlando, FL that includes Arnold Palmer Hospital for Children and Winnie Palmer Hospital for Women & Babies. When Orlando Health used Fundly for a pilot fundraising event and raised 500% of their fundraising goal, they switched all 25 of their annual fundraising events from Blackbaud’s fundraising platform to Fundly.

“Most fundraising events treat registration and fundraising as two separate activities, which results in a disjointed experience for the participant and leads to a lot of drop-off with registration levels. Fundly creates a seamless fundraising event experience that makes it easy for volunteers to fundraise using social networks, like Facebook, that they are already familiar with,” said Michael Schmidt, Director of Digital Media & Philanthropy for Arnold Palmer Hospital for Children.

To learn more about the Crowdfunding industry and startup local Crowdfunding community outreach programs, please join our free American Crowdfunding Center on LinkedIn.com or Meetup.com and don’t forget to follow us on Twitter. Both social media sites allow platform owners and crowdfunding campaign managers to post their news and press releases into the discussion forums. This will help us find new and exciting crowdfunding stories to cover.  We are currently covering crowdfunding topics such as Business Services, Cities/Communities, Crowdfunding Platforms, Education, Film/Music/Entertainment, Games/Videos, Social Good, Solar and Software/Hardware Technology Gadget crowdfunding PR campaigns.

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