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Understanding the Best Type of Crowdfunding Site to Support a College or University Campus

16 Mar

What’s the Best Type of Crowdfunding Platform to Serve a College or University Entrepreneurship Center, Co-Working Space, Incubator or Accelerator Program?

By Robert Hoskins

Understanding the Crowdfunding Funding Process

The first step in building a crowdfunding business model is to understand the various forms of crowdfunding and at what step of the business creation process each should be used.

This crowdfunding infographic is a good representation on each step of the business creation process from the business idea, generating revenue, validating marketplace demand, expanding operations and maturing into a fortune 500 company.  It also shows what type of crowdfunding is usually best to fund startups and each step of the business’ evolution.

The Crowdfunding Escalator by CrowdSuite  Shows the  Different Types of Crowdfunding

The Crowdfunding Escalator by Crowdfund Suite Shows the Different Types of Crowdfunding

Source: CrowdfundSuite.com


Donation-based Crowdfunding
– At kitchen tables, dinner parties, happy hours and dorm rooms around the world many brilliant ideas are born and discussed for the very first time. Once an idea has been pitched and vetted among friends and family and it begins to gain momentum toward the first step of crowdfunding, Donation-based Crowdfunding, which is used to scrape enough money together to begin building a business plan to figure out how much it will cost to bring a business idea to fruition and/or develop at one or more prototypes. Donation crowdfunding sites make it easy to collect money for new creative ideas as well as expand the crowdfunding campaign’s reach from just family and friends to a global audience of potential supporters.

Most donation-based crowdfunding sites are usually built to provide fundraising activities for campaigns that do not offer any rewards or perks.  They are also used to support non-profit causes.  Donations to 501(3)(c) are tax deductible and can be written off at the end of the year.  

Most universities will only build donation-based crowdfunding sites that can be used by students and faculty to collect money by students and faculty for a wide variety of projects including college educations, scholarships, research and development, campus improvements and all kinds of not-for-profit endeavors. Crowdfunding can be used for very small fundraising efforts to raising millions of dollars from alumni, foundations, institutional investors and corporate sponsors.

Donation-based crowdfunding sites will make it easy for anyone to search for, discover, research and fund their favorite pet projects on their alma mater’s campus.

Rewards-based Crowdfunding – Surprisingly enough 90% of people in the world still are not familiar with the term crowdfunding. Mention Kickstarter or IndieGoGo and most people do recognize the brand name and know its purpose and have heard of popular crowdfunding campaigns such as Oculus, Star Citizen, Coolest Cooler and the return of the Pebble Time SmartWatch.

Rewards-based campaigns are used to take ideas, concepts and prototypes to the next level. They are used in a similar fashion to how typical marketing campaigns are used to support product/service launches and rollouts with an added twist.

People with ideas build a crowdfunding profile, shoot a crowdfunding pitch video and build a list of up to 20 perks or rewards that are pre-sold to raise enough money to develop a prototype or pay for the very first manufacturing production run.  Not only do rewards-based crowdfunding campaigns validate industry demand, but they allow businesses to test market various product versions, colors and price points to gauge public interest. More importantly, they help startups generate their first revenue by pre-selling their products and services in order to raise enough money to get the business started. Gaining this type of market traction is very important to angel investors because it shows that there is an audience of people who are willing to pay for the company’s products and services. 

The best way for universities and colleges to cut their teeth on the crowdfunding business model is to launch a rewards-based crowdfunding site, which usually collects a 5% commission on the crowdfunding campaign’s total amount raised. That may not sound like much but since 2009, Kickstarter alone has raised $1.6 billion, which at 5% means $80 million over 5 years in gross revenue or an average of $16 million per year that could be used to fund a wide variety of college/university projects.

Not only are crowdfunding platforms a good source of revenue, but with the right marketing resources crowdfunding campaigns have the potential to raise a huge amount of marketplace awareness for the university’s projects, business development goals, research and development labs and technology transfer programs. All at no cost to the university because the crowdfunding campaign managers are the ones that spend money to market their crowdfunding campaign to the world.

The other reason to consider launching a rewards-based crowdfunding program is that they are easy and do not fall under the jurisdiction of the SEC or state securities board regulators because no securities are being sold. For new startups it also means that raising money does not involve selling any equity shares or giving up any control of the company’s administration.

Rewards-based crowdfunding campaign commissions can also be used by colleges/universities to establish co-working spaces and to fund college incubator and accelerator programs. Co-working spaces with at least 25,000 sq. ft. can generate millions of dollars per year in additional revenue from rent and mentorship programs.

It is important to note that rewards-based commissions combined with co-working space revenue can provide millions of dollars in seed investment capital to begin funding the next step in the process, equity-based crowdfunding sites, where schools, students, faculty and alumni can become equity investors in new startups.

Equity-based Crowdfunding – Setting up equity-based crowdfunding websites will allow schools to play the role usually enjoyed by Angel Investors, Venture Capitalists and/or Broker-Dealers. They will allow students to raise money for startups by selling debt, such as convertible notes, or selling equity shares for a certain percentage of the company to raise enough seed investment capital to produce prototypes, fund early manufacturing runs, setup distribution agreements and hire manufacturer representatives. 

Other types of equity crowdfunding involve sharing 20% of the gross profits with investors or making royalty payments on a per item sold basis until the investors receive a 3x to 5x payback on their initial investment.

Investing in startups is a risky business, but with the right education and building a small group of experienced Super Angel investors to follow, a large group of novice accredited investors can invest smaller amounts of money along side seasoned experts with a proven 25-30 year track record.

In states like Texas, Michigan, Georgia and 11 others non-accredited investors can also pool their money together to purchase equity shares of stock. This is something that has been illegal for the past 80 years, but intrastate crowdfunding exemption laws are now allowing average people to begin investing in startups just like angel investors and venture capitalists.

The aggregation of novice accredited and non-accredited investors are known as Investment Syndicates, which is the process of following expert investors.  This allows students, faculty members and the general public to learn the equity investment business and enjoy the benefits of being an insider when a great business idea is transformed from a startup company to an Initial Public Offering (IPO).

For example, a $300 investment for a single share of stock and pair of Oculus virtual reality goggles would have paid investors a return on investment of $45,000 when Facebook bought the company for $2 billion dollars.

Equity-based crowdfunding is much more complicated than rewards-based crowdfunding due to the stringent requirements needed to meet the SEC and state securities board regulatory requirements.

Unlike rewards-based crowdfunding, equity crowdfunding provides a great opportunity for business administration, legal and finance students to get hands-on experience writing business plans, structuring deals, protecting intellectual property (IP) and planning real world product/service launches that are part of every single equity crowdfunding campaign.

Working alongside experienced angel investors and venture capitalists is also a great way for students and faculty to learn the finance industry from the inside out.

Learn more about crowdfunding:

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Crowdfunding Takes Center Stage at SxSW Event in Austin, Texas beginning March 7, 2014

16 Feb

Crowdfunding Experts Converge at SxSW to Highlight the Significant Advancements in Title II & III SEC Regulations for Entrepreneurs and Startups in the High-Tech, Bio-Tech, Clean-Tech, Real Estate, Film, Music, Non-Profits, Science Research and Healthcare Industries

SXSW Interactive March 7-11 Austin 2014 Crowdfunding Events

SXSW Interactive March 7-11 Austin 2014 Crowdfunding Seminars and Presentations

By Robert Hoskins

Our recommended list of Crowdfunding Presentations to attend during the South by Southwest event in Austin, Texas during the SXSW Interactive session from March 7th through March 11th, 2014.  Click here to register.

The “Real” Crowdfunding Investment

Friday, March 7
12:30PM – 1:30PM

Chris Tyrell and Jessica Randaza will be speaking about the widely anticipated Title III crowdfunding rules that were approved unanimously by the SEC and successfully completely the 90-day public comment period.  Now the entire United States is waiting to see what changes, if any, the SEC will make to the previously approved rules.  The new regulations will add approximately 229 million new unaccredited investors to the pool of potential investors that will soon be able to make investments in startups and existing businesses seeking venture capital in return for an attractive return-on-investment (ROI). Read more…

Ethics & Future of Crowdfunding for Communities

Friday, March 7
12:30PM – 1:30PM

David Neff and Miriam Kagan will cover crowdfunding models that range from self-starting “fund my trip” models to a more established national community foundation-led model that raised over $20 million in one day. Next they will cover crowdfunding industry growth, and the ethical questions that have surrounded old school “fundraising” by non-profits for many years.  How much money actually goes to the beneficiaries and where does the rest end up?   Session participants will led through an exercise that will allow the group to see the necessary requirements to build a thorough Crowdfunding Bill of Rights. Read more…

Make It Rain: The New Healthcare Funding Landscape

Friday, March 7
5:00PM – 6:00PM

Digital Health is a growing market for crowdfunding dollars, with relatively few prolific angel and venture investors, entrepreneurs are getting creative about ways to find alternative venture capital. This healthcare crowdfunding presentation will examine the funding options available for various healthcare entrepreneurs at any stage. Read more…

The Original Gangsters of Crowdfunding

Saturday, March 8
12:30PM – 1:30PM

This panel discussion will feature four social good crowdfunding platforms that are focused on donation-based crowdfunding missions to improve the world for social good.  These platforms allow the privileged to make tax deductible donations to those who are not lucky enough to have nutritious food, clean water, bathrooms with flushing toilets or weatherproofed housing.  It will humble you to learn what conditions many third world country people actually live with little hope for help from the outside world.  With your help, these organizations can help you help them change the lives of many and get a tax deduction for helping. Whether you attend this panel discussion or not, please make at $25 donation to one or all four of the organizations. Read more…

The Indie Science Revolution

Saturday, March 8
3:30PM – 4:30PM

An increasing number of brave researchers are venturing out from the ivory towers of academia to pursue their own independent research. This new culture of indie science attracts investigators with the freedom to develop their ideas without the confines of politics and bureaucracy often found in academic departments.  Read more…

DIY PR for Crowdfunded / Kickstarter Projects

Sunday, March 9
11:00AM – 1:30PM

This two and a half hour long workshop, designed for DIY crowdfunders, will go over some PR best practices, strategies and tactics on how to create interest for crowdfunded projects based on conversations with individuals who’ve run successful Kickstarter campaigns and their interaction with reporters. It will cover planning & strategy, timing, pitch writing, story angles, social media, approaching reporters, how to avoid “dead zone” during a campaign, and more. Read more…

Crowdfunding Global Entrepreneurship

Sunday, March 9
11:00AM – 12:00PM

Jason Best will address the outstanding opportunity for Crowdfunding that exists in emerging markets that have been cut off from international venture capital markets.  He will examine how giving third world countries access to billions of dollars of capital has the ability to challenge the United States’ ability to stay competitive in the global market place. Read more…

FutureHood: Crowdfunding Innovators in Real Estate

Sunday, March 9
5:00PM – 6:00PM

Neil Dipaola will focus on how risk capital has brought about significant change to the high technology industry for more than a generation. He will differentiate the opportunities that exist outside of the risky young 20-something millenials’ visionary gadgets. Even though high-tech gadgets generate many front page news stories, Neil will encourage attendees to take a close look at the real estate industry, which is much more established and offers more traditional and proven investment opportunities. Read more…

The New Era of Investor Relations

Monday, March 10
11:00AM – 12:00PM

  • Douglas Ellenoff, Partner & Owner, Ellenoff Grossman & Schole LLP
  • Judd Hollas, CEO, EquityNet LLC
  • Judy Robinett, Angel Investor & VC Board Member

In 2013, the ban on general solicitation of accredited investors was lifted, causing the largest change to securities laws in decades. While everyone from startups to hedge funds will enjoy new liberties to begin marketing equity investment deals through advertising, marketing and PR campaigns, it’s critical that the new rules are followed to the letter in order to eliminate the chance for an exemption rescission. Read more…

Viral Crowdfunding: Story, Team & Gamification

Monday, March 10
12:45PM – 1:00PM

Matthew Bishop will address harnessing viral marketing to achieve a successful crowdfunding campaign. He asks, “So you want to raise money online and go viral?” Mr. Bishop’s SxSW crowdfunding presentation will help nonprofits, artists, and entrepreneurs learn how to create crowdfunding a project.  His subject matters will include how a tell a  story, manage a team and leverage game playing lessons that will help develop a viral buzz that may make or break the success fundraising campaigns. Read more….

How Crowdfunding Killed Hollywood

Tuesday, March 11
9:30AM – 10:30AM

Adam Carolla and Bill Zanker provide in inside look at how crowdfunding platforms like FundAnything are turning Hollywood upside down by completely changing the way movies are financed and produced. Like many entrepreneurs in Hollywood, Adam decided to circumvent the system by teaming up with Bill Zanker’s FundAnything and ended up raising $1.5 million that allowed him to create one the most downloaded podcast series in history.  Attendees will learn from Adam’s personal insights on how to use the right rewards to achieve the best results and why taping into your own crowd of social media contacts can deliver serious dividends. Read more…

Crowdfunding Real Change for Girls & Women

Tuesday, March 11
11:00AM – 12:00PM

Maz Kessler’s presentation will focus building a world of equality for all girls and women. Due to the fact that less than 7% of fundraising donations go to girls and women’s causes combined with the alarming news that one-in-four of women organizations that work on these issues are in danger of closing, Catapult.com was founded to keep the funding rolling in.

The group’s mission is to work on the battle front to fight for the rights and the respect for girls and women around the world. And to date, Catapult has achieved incredible results by raising millions of dollars through its nonprofit partners, which are growing rapidly throughout the world. Read more…

Funded in Austin

Tuesday, March 11
12:30PM – 1:30PM

Funded in Austin features Founder/CEO’s of three technology startups who have pursued and secured investment in their entrepreneurial ventures – one from crowdfunding, one from angel funding, and one from venture capital – totaling more than $302 million in funding. Read more…

GoGetFunding Infographic Reports Most Successful Statistics on How to Use Crowdfunding to Raise Money Online

17 Dec

GoGetFunding hosts thousands of crowdfunding projects and has helped people from all over the world raise millions online

 by 

To help Crowdfunders understand the most successful tips to raise the most money online as possible with their Crowdfunding campaign, GoGetFunding did some of good ol’ fashioned number crunching to see what strategies worked best. They looked at 12,052 fundraising projects and millions of data points within Crowdfunding campaigns to see what really makes a difference when launching fundraising campaigns on Crowdfunding platforms.  Here are the results in one of the best infographics we have seen to date:

GoGetFunding Details How To Raise Money Through Crowdfunding

GoGetFunding Details How To Effectively Raise Money Through Online Crowdfunding Campaigns

eBeggars.com Launches Crowdfunding Platform to Help with Medical Bills, College Debt, Personal Finances or Mortgage Payments

18 Aug

eBeggars.com is a microfunding site used by those looking to raise money for themselves or a specific cause

By Robert Hoskins

eBeggars.com is a microfunding site used by those looking to raise money for themselves or a specific cause. The practice, also known as online begging, allows users to participate in the online version of traditional begging or panhandling, by asking strangers for money to meet needs and even wants. These can range from basic food and shelter to insurance bills, college debt, personal finances and nice gifts. The platform provides an easy way for members to ask others for financial help while keeping pride intact.

eBeggars.com Launches Crowdfunding Platform to Help with Medical Bills, College Debt, Personal Finances or Mortgage Payments

eBeggars.com Launches Crowdfunding Platform to Help with Medical Bills, College Debt, Personal Finances or Mortgage Payments

Free membership signup allows users to begin posting unique and compelling stories or causes for donations. If an entry seems like it warrants sympathy, support or a donation, users can click on the thumbs up button. Those that are not convincing enough may receive a thumbs down vote. If fellow users find the story intriguing and genuine enough, they can process donations via PayPal. eBeggars does not take a commission or charge members fees. All posts, payment processes and usage on the site is free. Any and all payment from donors are sent directly to the recipient’s PayPal account.

Jay Abraham, the founder of eBeggars.com states, “We are thrilled to have accomplished this milestone and look forward to continuing to support those in need. Initially this was created as hobby site, but it turned out to a real help for a lot of people when they really need help and support.”

Requests on the site consist of pleas from students responsible for younger siblings that are in financial crisis, parents in unfortunate situations, individuals still burdened by the effects of a crippled economy, those ineligible for financial aid and even victims of unavoidable natural disasters.

eBeggars has made it possible for anyone to receive money simply by sharing a compelling story and asking strangers for help. Cyberbegging has proven to be yet another way to gain financial assistance in hopes of becoming debt free, to purchase basic necessities or to reach a personal financial goal.

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Crowdvance.com Offers Crowdfunders 100% Free Crowdfunding Opportunity to Launch Fundraising Campaigns with Zero Service Fees

23 Jun

Crowdvance is poised to disrupt the entire online fundraising industry by serving as the for-profit fundraising platform that passes 100% of donations received to organizations for processing and that rewards donors for their donations

By Robert Hoskins

Crowdvance.com announced plans to drop the Crowdfunding service fee they deduct from donations to zero percent, down from 6.5%. By removing the company’s service fee, Crowdvance.com becomes the first for-profit online fundraising platform to be 100% free.  Most other crowdfunding and fundraising platforms continue to promote the same model: no cost to sign up, but the various platforms deduct 3-10% from donations as a service fee on top of universal credit card processing fees. Crowdvance now offers one of the the only online fundraising platforms on the planet that does not deduct an additional service fee on top of standard credit card fees.

Crowdvance.com Now the Only Fundraising Platform on the Planet to not Charge a Service Fee and to Reward Donors

Crowdvance.com Now the Only Fundraising Platform on the Planet to not Charge a Service Fee and to Reward Donors

“When we launched Crowdvance, we set out on a mission to help organizations run more engaging, effective, and efficient fundraisers,” said Dylan Fox, Crowdvance’s CEO.  “We got the engaging part down by rewarding donors with gifts from great national companies we partner with, but our fee was getting in the way of our company reaching all of our goals.”

Crowdvance announced this service fee reduction after completing a recent round of seed-stage financing. “After we closed our seed round, we were able to think longer term, and that’s when our team realized we wanted to go big and really change the game,” said Fox.

Crowdvance.com’s 100% free model is not the only unique aspect to its fundraising platform. The company strives to be more than just a passive middle-man like other fundraising websites. It does this by forming partnerships with national companies to arrange exclusive gifts for donors to choose from as a reward for their donation. Current partners include companies like Hulu and Fathead.

“We saw that donors were getting burned out with traditional and online fundraising campaigns,” said Zachary Herman, CMO of Crowdvance. “With traditional fundraisers, small organizations are wearing out donors by trying to sell them the same bland fundraising products every year. How many tubs of popcorn or t-shirts can someone buy? And with more organizations making the switch to online fundraising, donors are experiencing fatigue. We solve that problem by rewarding donors for their good behavior. Donors can save on things like concert tickets or pro-sports tickets, or even on jewelry, as a reward for contributing through Crowdvance to an organization they care about. Plus, now a donor can have their donation go where it is intended to go.”

As the only for-profit fundraising platform that passes on 100% of donations received for processing, Crowdvance is poised to disrupt the entire online fundraising industry.

“We can support a 0% service fee because of our innovative business model,” said Fox. “We’re focusing on the value we deliver to national companies as our main business, and passing the benefits back to the organizations that use our platform to raise funds, making it entirely free.”

Crowdvance has always had a values focus. It won first place in the international Values and Ventures Business Plan Competition in April, 2013 and now the company feels even stronger about its ability to focus on its values mission.

“Over the next few months, we’re going to open the Crowdvance platform to the masses, and are going to become the standard for fundraising. Our model just makes sense,” says Fox.

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CrowdIt Unveils Crowdfunding Platform to Finance America’s Dreams

2 Apr

By Robert Hoskins

CrowdIt, the crowdfunding site that helps American’s finance the “American Dream,” announced early crowdfunding projects submitted to its site are now available for public preview through its new “Project Carousel” at www.crowdit.com.   CrowdIt will continue to populate the carousel with additional projects leading up to the official launch of funding activity on June 4.

CrowdIt acts as a “virtual incubator” and represents a new approach to crowdfunding by including peer-review feedback, mentoring and business networking as part of its offering. As part of its launch, CrowdIt will contribute $10,000 to the project that reaches the highest amount of funding by Aug. 18, 2013.

“CrowdIt has garnered the attention of entrepreneurs and startup communities that are looking for more than just funding support, and it shows in the type of projects being loaded into the site for launch on June 4,” said Jason Graf, co-founder and CEO of CrowdIt. “Every day we see more exciting projects come in and we can’t wait for the projects to go live so dreamers can move to the next step in their journey to success.”

Examples of projects being submitted to CrowdIt include:

  • EZ Learn Stencil Tablet – patent-pending technology helps children in math, reading and literacy skills by helping them to trace and recognize letters, numbers, words, shapes and colors.
  • Chalam – this songwriter from India who survived the great 2004 tsunami wants to record and make her music available for the world to hear.
  • Imagine IPD – this clean energy startup has a mission to implement its technology to introduce a new and innovative clean energy alternative to decrease the dependence on fossil fuels and reduce carbon footprints.
  • Chic Furniture on a Budget – this Tampa Fla. startup helps those on a tight budget find, restore and furnish their home or apartment through well-proven techniques.
  • Simply Sinful Lingerie Parties – After more than 20 years in retail and direct sales, this Dreamer wants to incorporate a love for sales and creativity to offer unique and fun products to the world.

CrowdIt’s vision is that crowdfunding needs to extend beyond the funding event – exemplified in its tagline, “Don’t Just Dream It: CrowdIt!” Its website is architected to offer a new crowdfunding experience and to optimize the crowd in all facets of the site – from project evaluation and acceptance to peer review and networking.

The CrowdIt site includes:

  • Flexible Funding – CrowdIt offers Dreamers the flexibility to fund either “all” or “partial” projects based upon the unique needs of the campaign.
  • Networking – CrowdIt incorporates social networking into its site to encourage mentoring and business-to-business networking.
  • Peer Review – CrowdIt believes in the “power of the crowd” to provide feedback for project proposals, ideas and strategies presented by Dreamers.
  • Interactivity – CrowdIt is a highly social, interactive and collaborative community site that provides an engaging experience for all who visit and participate in it.
  • Crowd Power – unlike other crowdfunding sites, CrowdIt is designed to empower the community to drive decisions concerning project review and acceptance, feedback and advice, and input for future features to improve the site.

CrowdIt is now accepting crowdfunding projects and projects will go live on the site June 4, 2013. The company is contributing $10,000 to the project that reaches the highest amount of funding by Aug. 18, 2013, 75 days after the go-live date.

Based in America’s heartland of Springfield, MO, CrowdIt is the crowdfunding site for believers of the New American Dream. Its crowdfunding site goes beyond just funding great ideas, but focuses on supporting success through peer and expert advisory support, business networking and sharing of best practices and knowledge. CrowdIt’s belief is that crowdfunding will help drive the next wave in innovation and economic expansion, and underpins its mission to support small business growth.

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