Rewards Crowdfunding Platforms: Crowdfunding and Beyond by David Seaton

Kickstarter, Indiegogo, and RocketHub are all examples of reward-based
crowdfunding websites. Typically, a person can create a project, which
includes a video, text, and reward tiers or “perks” that a backer will
have access to should they pledge money to the initiative. Backers do
not have ownership in the project.

GoFundMe, GiveForwad, and YouCaring are examples of donation-based
crowdfunding websites that individuals will typically use to raise
money for medical expenses, personal causes, and hardships. See more
personal cause crowdfunding platforms here.

Razoo, Causes, and CrowdRise are examples of donation-based
crowdfunding websites that non-profits might use to raise money for
projects or initiatives. See more non-profit crowdfunding platforms
here.

There are also hybrid platforms like FundAnything and Fundrazr that
contain both rewards-based campaigns and campaigns in the “personal
cause” category.

Equity Crowdfunding Platforms:

Companies like CrowdCube, Seedrs and SeedInvest are internet platforms
which enable small companies to issue shares over the internet and
receive small investments from registered users in return. While
CrowdCube is meant for users to invest small amounts and acquire
shares directly in start-up companies, Seedrs on the other hand pools
the funds to invest in new businesses, as made through a
pre-determined nominated agent. Curated crowdfunding platforms serve
as “network orchestrators” by curating the offerings allowed on the
platform. They create the necessary organizational systems and
conditions for resource integration among other players to take place.
Relational mediators act as an intermediary between supply and demand.
They replace traditional intermediaries (such as traditional record
companies, venture capitalists). These platforms link new artists,
designers, project initiators with committed supporters who believe in
the persons behind the projects strongly enough to provide monetary
support. Growth engines focus on the strong inclusion of investors.
They dis-intermediate by eliminating the activity of a service
provider previously involved in the network. The platforms use
crowdfunding to seek stakes from a community of high-net-worth private
investors and match them directly with project initiators.

Recently Launched Crowdfunding Sites:

99Funding

AlumniFunder

BanktotheFuture

Bellavate

Big-Concepts

ClickStartMe

cMEcompete

Crowd Valley

Crowdcube

Crowdfund It Today

Crowdfunder

Crowdit

CrowdTilt

Foodstart

Fundable

FunderHut

Fundly

give2gether

GivetoBenefit

iCrowd

KrowdKidz

Launcht

Mini America

PiggyBackr

Pik a Venture

PledgeCents

RockthePost

Seed&Spark

SeedInvest

Start a Cure

Sterlingfunder

UInvest

VentureHealth

WeFunder

YouCaring

Top Rewards-Based Crowdfunding Sites:

ArtSpire

Crowdtilt

Feed the Muse

FunderThunder

IndieGoGo Crowdfunding

iPledg

Kickstarter Crowdfunding

MassiveMov

RocketHub

Springboard

TechMoola

Top Disaster-Based Crowdfunding Sites:

Go Fund Me

HelpersUnite.com

Top Non-Profit-Based Crowdfunding Sites:

Crowdrise

Fractured Atlas

Fundly

Razoo

Start Some Good

USA Projects

Top Music-Based Crowdfunding Sites:

ArtistShare

Hifidelics

PledgeMusic

Sellaband

Top Film-Based Crowdfunding Sites:

Offbeatr

Slated

VODO

Top Design-Based Crowdfunding Prototyping Sites:

FabLabs

Inventors Warehouse

NextFab Studio

NYC Resistor

TechShop

Top Sports-Based Crowdfunding Sites:

Involved Fan

Top Publishing-Based Crowdfunding Sites:

Magcloud

PubSlush

Unbound

Top Photojournalism-Based Crowdfunding Sites:

Emphas.is

Top Arts & Crafts-Based Crowdfunding Sites:

Etsy

Top International-Based Crowdfunding Sites:

Buzz Entrepreneur – France

Fund R Venture – United Kingdom

Geldvoorelkarr – Netherland

Indulu.be – Hungary

New Jelly – Norway

PPL – Portugal

Starteed – Italy

The Crowd Angel – Spain

Ulule – France

WazoKu – United Kingdom

WEBclusive – Netherlands

Top Crowdfunding Accelerators, Boot Camps, and Incubators:

AlphaLab

Capital Factory

DreamIt Ventures

Good Company Ventures

Junto Partners

Seed Hatchery

TechStars

Y-Combinator

Top Lending-Based Crowdfunding Sites:

Funding Circle

Kiva

Lending Club

Funding Circle

SoMoLend

Top Donation-Based Crowdfunding Sites:

Fundrazr

GiveForward

Pifworld

Rally

Top Equity-Based Crowdfunding Sites:

ASSOB

Angel List

AppsFunder

CircleUp

EarlyShares

FundedbyMe

GrowthGroup

GrowVC

I-Bankers Direct

inCube Ventures

MicroVentures

OurCrowd

Pozible – Australia

Quirky

Top White-Label Crowdfunding Site Providers:

CrowdfundHQ

CrowdfundingSite

Crowd Fund Magic

Crowdforce

Crowdhoster

Crowdtilt

Fundrazr

Hayduke Labs

IgnitionDeck

Invested.in

Katipult

Launcht

Mimoona

Selfstarter

Thrinacia

Towema.com

Top Securities-Based White-Label Crowdfunding Site Providers:

Community Leader

CrowdValley

Most successful Kickstarter Campaigns:

·        On April 17, 2014, the Guardian media outlet published a
list of “20 of the most significant projects” launched on the
Kickstarter platform prior to the date of publication:

·        Musician Amanda Palmer raised US$1.2 million from 24,883
backers in June 2012 to make a new album and art book.

·        American Hans Fex raised US$1,226,811 from 5,030 backers in
March 2014 for his “Mini Museum” project that he describes on his
Kickstarter page:

·        For the past 35 years I have collected amazing specimens …
I then carefully break those specimens down into smaller pieces, embed
them in acrylic … Each mini museum is a handcrafted, individually
numbered limited edition … The majority of these specimens were
acquired directly from contacting specialists recommended to me by
museum curators, research scientists and university historians.

·        The “Coolest Cooler raised a total of $13,285,226 from
62,642 backers. The cooler features a blender, waterproof Bluetooth
speakers and an LED light.

·        Writer Rob Thomas raised $5.7 million from 91,585 backers in
April 2013 to create a feature film version of the defunct television
series Veronica Mars. The nine award levels were initially available
to backers in 21 countries, including Brazil, Canada, Finland and
Germany. Lead actress Kristen Bell explained on the launch date of the
project: “i promise if we hit our goal, we will make the sleuthiest,
snarkiest, it’s-all-fun-and-games-‘til-one-of-you-gets-my-foot-up-your-ass
movie we possibly can.”

·        Actor, writer and director Zach Braff raised US$3.1 million
from 46,520 backers in May 2013 to create the feature film Wish I Was
Here, which premiered at the Sundance Film Festival. Braff’s campaign
was financially complemented by Worldview Entertainment.

·        Filmmaker Spike Lee raised US$1.4 million from 6,421 backers
in August 2013 to make a feature film that, as of April 2014, is not
titled. The film will feature actors Stephen Tyrone Williams, Zaraah
Abrahams and Michael K. Williams.

·        YouTube celebrity Freddie Wong, who owns the company
RocketJump, raised US$808,000 to produce the second series of the
Web-based series Video Game High School. In February 2013, 10,613
backers committed funds to the project following the series’ first
season, which was also funded on Kickstarter.

·        Performance artist Marina Abramovic raised US$661,000 from
4,765 backers in August 2013 after paying US$950,000 to buy a building
that would house the “Marina Abramovic Institute”. The building, as
well as a corresponding organization, was foremost to the campaign, as
Abramovic seeks to feature and maintain “long durational work,
including that of performance art, dance, theatre, film, music, opera,
and other forms that may develop in the future”.

·        The Kano technology company raised US$1.5 million from
13,387 backers in December 2013 to create a “computer and coding kit
for all ages.” In June 2014, Kano will ship a case, a keyboard, a
speaker, a wireless server, and software that encourages children to
learn the “Kano Blocks” coding language, a set of computer programming
skills.

·        The Flint and Tinder company raised US$1.1 million from
9,226 backers in April 2013 for its “10-Year Hoodie” hooded sweatshirt
that consists of 100% cotton and is made in the U.S. The company
explains on its website: “Companies have systematically lowered your
expectations to the point where it’s hard to know what to expect
anymore. But while they’re busy off-shoring, out-sourcing and
generally making things as cheaply and quickly as possible. It ends
here.” According to Flint and Tinder, one million units of the product
have been sold.

—
Dave M. Seaton
650-722-0840

Role of the Crowd: Crowdfunding and beyond by David Seaton

The role the crowd plays in the process is an essential component to
eventual project outcome. Despite the seemingly simplicity of
exchanging a promise to pay for a promise to deliver, the entire
process is highly interactive. Given the finite funding time
constraints successful crowdfunding projects require viral marketing,
which is ultimately determined by the crowds overall involvement. Each
individual acts as an agent of the offering, selecting and promoting
the projects in which they believe most in. They will sometimes play a
donor role oriented more towards providing help on social projects. In
some cases they will become shareholders and contribute to the
development and growth of the offering. Each individual disseminates
information about projects they support in their own personal online
communities, generating further support in the role of (promoters).
Motivation for consumer participation stems from the feeling of being
at least partly responsible for the success of others’ initiatives
(desire for patronage), striving to be a part of a communal social
initiative (desire for social participation), and seeking a payoff
from monetary contributions (desire for investment). This is often the
most overlooked benefit of crowdfunding, as regardless of the project
type (Equity or Rewards) the early funders will often become brand
evangelists driving accelerated growth before early adapters and
beyond market maturation.

Crowdfunding Risks and Industry Barriers: by David Seaton

Crowdfunding also comes with a number of potential risks or barriers.

Reputation – failure to meet campaign goals or to generate interest
result can be considered a public failure. Reaching financial goals
and successfully gathering substantial public support but being unable
to deliver on a project for some reason can severely negatively impact
one’s reputation ultimately causing irreversible damage.

IP protection – many Interactive Digital Media developers and content
producers are reluctant to publicly announce the details of a project
before production due to concerns about idea theft and protecting
their IP from plagiarism.

Donor exhaustion – there is a risk that if the same network of
supporters is reached out to multiple times, that network will
eventually cease to supply necessary support.

Public fear of abuse – concern among supporters that without a
regulatory framework, the likelihood of a scam or an abuse of funds is
high. The concern may become a barrier to public engagement.

Time Investment – The required level of time resources which must be
dedicated prior to launching a crowdfunding project, and during the
management of the project itself, can often be overlooked and
misjudged by many people considering raising funding through
crowdfunding. Crowdfunding draws a crowd: investors and other
interested observers who follow the progress, or lack of progress, of
a project. Sometimes it proves easier to raise the money for a project
than to make the project a success. Managing communications with a
large number of possibly disappointed investors and supporters can be
a substantial, and potentially diverting, task.

Crowdfunding Benefits and risks: Crowdfunding and Beyond by David Seaton

Crowdfunding campaigns provide producers with a number of benefits,
beyond the strict financial gains. The following are all examples of
the non-financial benefits of crowdfunding.

Profile – A compelling project can raise a producer’s profile and
provide a boost their reputation.

Marketing – Project initiators can show there is an audience and
market for their project in advance of full scale launch. In the case
of an unsuccessful campaign, it provides good market feedback and can
even allow for positive iterations and changes to be made prior to
sunk costs.

Audience engagement – crowd funding creates a forum where project
initiators can engage with their audiences. Audience can engage in the
production process by following progress through updates from the
creators and sharing feedback via comment features on the project’s
crowdfunding page. Long-term engaging an audience to this degree is
precisely the type of community building that can lead to the creation
of an loyal evangelist customer base.

Feedback – offering pre-release access to content or the opportunity
to beta-test content to project backers as a part of the funding
incentives provides the project initiators with instant access to good
market testing feedback.

Proponents of the crowdfunding approach argue that it allows good
ideas which do not fit the pattern required by conventional financiers
to break through and attract cash through the wisdom of the crowd. If
it does achieve “traction” in this way, not only can the enterprise
secure seed funding to begin its project, but it may also secure
evidence of backing from potential customers and benefit from word of
mouth promotion in order to reach the fundraising goal. Another
potential positive effect is the propensity of groups to “produce an
accurate aggregate prediction” about eventual market outcomes.
Proponents also identify a potential outcome of crowdfunding as an
exponential increase in available venture capital. One report claims
that If every American family gave one percent of their investable
assets to crowdfunding, $300 billion (a 10X increase) would come into
venture capital.  Proponents also cite that a benefit for companies
receiving crowdfunding support is that they retain control of their
operations, as voting rights are not conveyed along with ownership
when crowdfunding.

Intellectual property exposure

One of the most apparent challenges of posting new ideas on
crowdfunding sites is there may be little or no intellectual property
(IP) protection provided by the sites themselves. Once an idea is
posted, it can be copied or otherwise disseminated. Ideas can be
protected on crowdfunding sites through early filing of patent
applications, use of copyright and trademark protection as well as a
new form of idea protection supported by the World Intellectual
Property Organization called Creative Barcode.