Austin Startup Launches Product Marketplace and Crowdfunding Platform to Connect Brands, Charities and Consumers

121Giving was built by the two “philanthropeurs” to help charities find products they need to fulfill their missions, match those needs with supplier brands eager to help causes, and get consumers involved to help fund the product-oriented campaigns

 By Robert Hoskins

Austin, Texas – For donors and consumer givers who want to know that the money they donate to charity is making a tangible impact and serving real needs, Austin-based startup 121Giving.com launched a new product marketplace and crowdfunding platform that enables donors to know where their giving is going every time they support a nonprofit through the site.

121Giving.com Shows Consumers Where Their Donations are Going

Developed by Liz Deering and Mark Courtney, experienced entrepreneurs who have funneled their business-technology passions and nonprofit expertise into a business model that makes philanthropy a successful and transparent online venture, 121Giving was built by the two “philanthropeurs” to help charities find products they need to fulfill their missions, match those needs with supplier brands eager to help causes, and get consumers involved to help fund the product-oriented campaigns.

“We launched 121Giving because we wanted to improve the way that nonprofits, consumers and charity-minded companies can all work together for the collective good,” said Deering, co-founder and chief operating officer, who previously worked for technology companies and Goodwill Industries of Austin before launching the company with Courtney. “We wanted to make the entire giving process more efficient and transparent, both to solve the inefficiencies and costs that nonprofits often face with traditional product procurement and to address consumer skepticism about how their donations are being used.”

Many recent studies have shown that consumers want more details from the companies they patronize about their support of nonprofits and causes and the results of their donations and contributions. In fact, 88% of consumers in North America want companies to inform them about their support of social and environmental causes (Cone Communications, 2013), and 69% of Millennials say they are most likely to donate to a nonprofit that inspires them (Cone Inc., AMP Agency).

“Our online marketplace and crowdfunding platform brings everything to the forefront in a way that delivers measurable results for everyone involved,” says Courtney, a social innovator and enterprise technology expert who is responsible for 121Giving’s technology, platform and business strategy. “Nonprofits get the products they need, donors can see the impact of their giving, companies can make a profit while being good corporate citizens, and communities benefit from campaigns that tackle issues, solve problems and change lives all around them.”

Feeding the Need, Matching Brands and Donors
Through 121Giving, nonprofits can publish their specific needs for products by developing crowdfunding campaigns, consumers can donate money to buy those products and track the campaign’s progress and success, while companies can show they care by making their products available at prices that nonprofits can afford. The unique nonprofit-donor-brand ecosystem delivers the visibility nonprofits need, the crowdsourcing power of donors, and a steady supply chain for merchants to sell products at discounts to charities and still make a profit.

For brands interested in selling their products to nonprofits at 121Giving, visit the site’s “Corporate Brand Partners” section.

After a soft launch at SXSW in Austin this week, 121Giving is already hosting four crowdfunding campaigns that support Central Texas nonprofits. Ongoing and future campaigns will cover a range of products that nonprofits urgently need, including office, medical, cleaning and educational supplies; clothing; computers; furniture; food and hygiene products; electronics; home goods, non-perishable goods and more.

The current campaigns include:

• Front Steps, an agency that provides services to the homeless, raising money for 250 move-in kits for clients moving from the streets to transitional or permanent housing
• Color Cancer, a nonprofit serving people with cancer, raising money for cases of high-protein Ensure for 125 people with cancer
• Project Transitions, an agency for people with HIV/AIDS, raising money for medical, cleaning and comfort supplies for the 30-plus individuals cared for yearly at Doug’s House, the only Central Texas hospice facility for those with HIV/AIDS.
• Rebuilding Together Austin, an agency dedicated to safe, healthy homes for low-income residents, raising money for home repair tools and volunteer supplies to help 30 families.

“The nonprofit market deserves a no-cost solution that enables them to engage online donors easily in helping them purchase the products they need,” said Courtney. “We’re giving nonprofits access to a single online resource where they can source bulk products consistently and affordably, helping them spend less time on product acquisition and more on the missions they serve so passionately.”

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Why Every University and College Should Develop a Rewards-based or Equity-Based Crowdfunding Ecosystem

Crowdfunding platforms can be used to support research & development, transfer technology, protect IP, build co-working spaces and finance incubators and accelerators to launch new startups

 By Robert Hoskins

 Austin, Texas – The purpose of this equity crowdfunding article is to encourage universities and colleges to begin thinking about how schools and students might benefit from:

• Building a Rewards-based and/or Equity-based Crowdfunding Ecosystem;
• Providing Easy Access to Seed Investment Capital with Crowdfunding;
• Generating More Revenue to Support Co-Working Spaces and Startups;
• Using Equity Crowdfunding Sites to Finance Incubators and Accelerators;
• Taking Advantage of Investor Syndicates that are Seeking Better Deal Flow;
• Splitting Revenue from Incubator and Accelerator Mentors Consulting Fees;
• Streamlining Technology Transfer Offices (TTOs);
• Cross-Pollinating College Education with Real World Startups; and
• Learning to Build Better Alumni and Local Community Relationships

The Need to Build a Crowdfunding Ecosystem

There is a new generation of “Millennials” that do not want to go to college due to the poor economy and because they do not want to start their life as young adults by incurring $50,000 or more in college loan debt. And there is a growing concern for many students that there may not be a job waiting for them when they finally graduate. 

Read more:  What is Crowdfunding?

But what if there was a way to attract more students by convincing them that they could work their way through college by researching, planning and then launching their own business while earning their college degree? This would allow some certainty about their career path and teach students how to put a lot more money in their pockets than working for a large corporation that will stick them in a cubicle for the rest of their life.

Entrepreneurship Centers

For this reason, “Entrepreneurship Centers” are becoming a huge draw for students who do not want to work for a living, but instead want to live for working. That means learning how to build new startups from the ground up.  Entrepreneurship Centers usually start with a co-working space, then adds a business incubator with mentors to guide students through the startup process and when budget permits, accelerators are created to help students raise money from angel investors, accredited investors and sometimes venture capitalists.

Co-Working Spaces for Startup Companies

The biggest challenge for incubators and accelerators are the costs associated with building a 25,000 sq. ft. co-working space, paying mentors salaries and finding experienced executives with great track records that are willing to share their wisdom and industry experience with students. There is also resistance from departing from the “old school” way of transferring technology from a university Research & Development laboratory, protecting the intellectual property and then utilizing a licensing or royalty revenue model to realize short-term deals to provide a revenue for the college or university. 

JOBS Act: Nationwide Equity Crowdfunding

Enter the 2012 JOBS Act, General Solicitation and a new Equity Crowdfunding alternative financing tool that can help startups raise seed investment capital to startup new businesses. While the SEC and NASAA seems hell bent on preventing the national guidelines from ever being released (they are three years past the official deadline mandated by President and the United States Congress), approximately 14 states such as Texas, Michigan, and Georgia have passed their own Intrastate Equity Crowdfunding Exemptions. Add to that another 15 states have a Crowdfunding Exemption in progress.

Map of United States that have approved Intrastate Equity Crowdfunding Exemptions

Source: CrowdfundingLegalHub.com

Intrastate Equity Crowdfunding Exemption

In states where intrastate equity crowdfunding is legal, any trade school, college or university can build an equity crowdfunding platform and use it to begin fundraising campaigns to raise money, not only from Angel Investors and Accredited Investors, but also from the general public who are non-accredited investors.

Read more: What is an Intrastate Equity Crowdfunding Exemption?

This means anyone can take a brilliant idea, create a business plan and investor deck to support the business case, build an online equity crowdfunding profile and then use marketing campaigns to advertise the deal to millions of potential investors. Like any e-commerce site, Investors can then visit the equity crowdfunding sites to shop for deals by minimum investment amount, by products or services or by vertical business segment to find deals they want to invest in.

This means that a college or university can build an equity crowdfunding site and use it to raise money for every one of its R&D programs and streamline the entire technology transfer process so that promising technology can be transformed into startups businesses. The school collects a certain percentage from each crowdfunding campaign called a platform commission fee. For a $1 million raise and 10% platform commission fee, a college could collect a $100,000 fee from each campaign. This money could be used to fund co-working spaces, incubators, accelerators and Entrepreneurship Centers.

Creating Equity Crowdfunding Investment Syndicates

By the SEC’s securities law, a crowdfunding platform’s management team or employees cannot invest in equity campaign hosted on its own site unless they are registered broker dealer with the SEC. But a popular trend that is growing is building a college or university equity crowdfunding investment syndicate. An investment syndicate is usually led by one or more Super Angel Investors, who are seasoned veterans that have been investing in startups for 20 to 30 years and completely understanding the process of vetting deals with due diligence and understand the real risks of investing in startup companies.

Novice accredited investors with little investment experience join the investment syndicate so that they can follow or invest along side the Super Angel Investors. In addition, where it is legal, investment syndicates will pool a large pool of non-accredited investors together, who make small investments, into a single LLC and then invest the group’s money similar to how a venture capitalist invests money on the behalf of others.

Adopting an Equity Crowdfunding Ecosystem

For colleges and universities that adopt an equity crowdfunding business model might, it might completely change the way a school recruits, raises money, builds relationships with alumni and earns revenue by seeking long-term equity stakes in their students startups versus short-term licensing and royalty agreements.

Read More:  Top 100 Crowdfunding Sites in the United States

Launching an equity crowdfunding platform would not just increase a school’s earning potential, but they might dramatically change the manner in which that Millennials are taught. Instead of just course work, students would be taught at an early age to begin to engage with the world around them and plot a course for their own future destiny rather than relying on fate. Some Millennials might reject the idea of going to college, but the lure of becoming a successful entrepreneur and launching their own business while earning a college education has the potential to create one of the most vibrant and thriving economies the world has ever seen.

Even students that do not start up their own companies have an outstanding chance to benefit from the equity crowdfunding business model. All students seek a way to get some type of real world work experience usually by working as free or highly underpaid interns. Imagine the learning benefits that student would receive when applying their desired major’s education such as business administration, finance, legal or marketing to the intense equity crowdfunding process of launching a startup company.

Instead of adding a bullet point for working a menial job as a small cog in the corporate machine as an intern, students just might be fortunate enough to work on several successful crowdfunding campaigns that would highlight their professional expertise such as business planning, structuring equity finance deals marketing, PR, video production, and/or copy writing. And if the sweat equity pays off in equity crowdfunding shares, they might become extremely wealthy when that startup goes public a couple of years after they graduate. This is how many, many Silicon Valley millionaires got their start. They just did not have a term for the process, which is now branded as equity crowdfunding today.

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