Lessons for Entrepreneurs from Crowdfunding

There is a lot of buzz out there these days about crowdfunding. As Kauffman Dissertation Fellow Ethan Mollick at the University of Pennsylvania’s Wharton School puts it, “Crowdfunding has been drawing substantial attention from policy makers, managers, and entrepreneurs, but relatively little notice from academics, even though it touches on many topics of importance to scholars of entrepreneurship.”

His paper from last July, “The Dynamics of Crowdfunding: Determinants of Success and Failure” (available here), examined almost 47,000 projects on Kickstarter that raised a combined revenue of $198 million. Mollick concluded that several factors influence whether a project will succeed or not:

  1. The greater the size of the founder’s social network, the greater the chance for success (particularly Facebook in this case; this is also known as the ‘be popular’ strategy).
  2. The underlying quality of the projects – those with high-quality, polished pitches are more likely to be funded (e.g., use a video; as Kickstarter’s website states, “Projects with videos succeed at a much higher rate than those without.”).
  3. A strong geographic component tie-in seems to increase success (pitching country music in Nashville, film in Los Angeles, etc.).
  4. A shorter Kickstarter duration is better (35 percent chance of success for 30-day pitches, 29 percent for 60-day pitches). Mollick noted that a longer duration implies a lack of confidence in the project’s success.
  5. Being highlighted on the Kickstarter website is hugely beneficial (89 percent chance of success vs. 30 percent for unfeatured projects).
  6. A large number of creative individuals in the city where the project is based is associated with greater success (target these kinds of people).

Geographic Distribution of Projects by Success

Success by Geographic Area
The circles on this map represent counts of Kickstarter projects by city; the larger the circle, the more projects based in that area. The shading within the circle reflects the portion that were successful—dark green represents successfully funded projects while light green indicates the project was not funded. Based on Mollick’s research, odds are that the successfully funded projects in given cities were a good fit culture-wise for that city.



Choosing The Best Platform For Your Startup

Daydreaming of MoneyWith seed capital for startups getting difficult to find by the day,many Entrepreneurs are looking at crowdfunding platforms to raise funding for their startups.

What is Crowdfunding? It describes the collective effort of individuals who network and pool their resources, usually via the Internet, to support efforts initiated by other people or organizations. Crowd funding is used in support of a wide variety of activities, including disaster relief, citizen journalism, support of artists by fans, political campaigns, startup company funding, movie or free software development, and scientific research.

Fred Wilson, who is the founder of the venture capital firm Union Square Ventures (which has invested in Twitter, Tumblr, Foursquare, and Zynga), predicts that once the crowdfunding scenario gets up and running, the equity crowdfunding market will reach $300 billion and will be largely driven by families and individuals investing a small percentage of their assets via crowdfunding. As a point of comparison, a study from Crowdsourcing.org reports that about $1.5 billion was raised from 452 crowdfunding platforms in 2011.

Here are a list of the best crowdfunding platforms to look to if you are a startup entrepreneur.

Kickstarter: Kickstarter is probably the oldest and the strongest crowdfunding platform. With over 74k Projects launched on it’s website, and 383M $ raised through the website for projects, Kickstarter has a success rate of 44%. It can help fund everything from films, games, and music to art, design, and technology. Kickstarter is full of ambitious, innovative, and imaginative projects that are brought to life through the direct support of others.

WeFunder: Wefunder is a crowd investing platform for startups. They help seed investors purchase stock for as little as $100 in the most promising new businesses around the country. They also help founders raise funds from their most passionate users who provide product feedback, marketing evangelism, and business connections. The company was founded in January 2010 by an MIT Sloan School of Management. Right now it boasts of a huge number of investments, as written on their website: 9,287 funders pledge to invest $25,989,550 in startups

Indigogo: Indiegogo is one of the world’s largest and earliest crowdfunding websites. They have helped to raise millions of dollars for over 30,000 campaigns, across 194 countries. Danae, Eric and Slava each tried to raise money for something they were passionate about, but they came up short. They had great ideas, the passion to work hard, and good networks, yet access to funding through traditional channels proved limited. The trio was determined to find a solution to the problem. Indiegogo was born; the crowdfunding solution that empowers ideas and enables people to donate funds easily.

CrowdFunder: Based in Los Angeles, crowdfunder is a social network for entrepreneurs and investors to connect, crowdfund and grow. The company puts tools, connections and advice in the hands of business owners and investors at all stages in the life cycle of a business. Startups and small businesses can raise funds through equity, debt and contribution-based instruments. Crowdfunder is also holding a series of contests in cities around the US where local businesses compete, and get a chance to win funding upto US $500,000. This website however mainly concentrates on the US market.

RocketHub: RocketHub is a crowdfunding platform for creative professionals. There are project topics tagged with various tagwords from beautiful to weird on this site. Rockethub is gaining a lot of popularity in recent times due to it’s continuous media exposure.

SeedInvest: Concentrating on American startups, this website was started by a group of MBA professionals from The Wharton School of the University of Pennsylvania, SeedInvest seamlessly brings together entrepreneurs and investors through an equity-based crowdfunding platform in a way that has never been done before. SeedInvest empowers entrepreneurs with a platform to pitch to millions of investors throughout the US in order to raise seed capital

Quirky: Quirky is a Crowdfunding Website for Inventors. According to the website, it has developed 241 products, has 188 retail partners and has a community of over 283,000 people. For centuries, becoming an “inventor” has been a hard gig to crack. Complexities relating to financing, engineering, distribution, and legalities have stood in the way of brilliant people executing on their great ideas. Since launching in 2009, Quirky has rapidly changed the way the world thinks about product development

Startsomegood: Startsomegood is a Crowdfunding Website for Social Entrepreneurs. Start Some Good is a new crowdfunding website for social initiatives to raise funds through a community of supporters. You can even see a project from India on this website.

Fundable: Founded by serial entrepreneur Wil Schroter, Fundable investors have the opportunity to invest in small business for equity. The website is currently running a rewards-based funding platform.

Believers Fund: This website is for mobile apps. This innovative crowdFunding platform has partnered with companies like Microsoft Bizspark, and has oflate, become the talk of the crowdfunding niche.

There are other crowdfunding websites like EarlyShares, GetFunded, RelayFund, CrowdCube, New Jelly, CoFolio, Peerbackers.

Since this is a top ten, we have chosen the ones that we thought are apt for the list. Have we missed out anything? Please let us know

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Article Source: http://EzineArticles.com/?expert=Vikram_V

One Man’s Quest to Tell/Sell His Memoir, “Been There Done That”

Author launches Kickstarter campaign in effort to share his remarkable story of survival with others

rickramoneLOS ANGELES (March 3, 2013) – Rick Bassman has lived eight lives as a Stage 4 Cancer survivor, homeless person, gunshot and stabbing victim, heroin and cocaine addict, criminal, and 5’4” “tough guy”/street fighter. Yet, despite all his travails, the former Emmy Award winning Disney executive, NFL agent and movie producer and professional wrestling mogul & MMA pioneer may be facing the toughest challenge of his tumultuous lifetime: the publication of his memoir, Been There, Done That.

Bassman, in keeping with his own life script, has decided to do things his own way. And that certainly applies to the publication of his memoir. Rather than entrusting his life’s work to the hands and whims of others—even declining a highly lucrative major publishing deal—Bassman has decided to appeal to the public via Kickstarter (please see link below) to assist him in publishing his incredible life’s journeyhis way.

Been There, Done That is one man’s touching memoir of going to hell and coming back through the other side, electrified. From dying of cancer, living destitute on the streets and watching his family die one by one, to producing movies and concerts and communing with spiritual leaders and porn stars, Bassman’s life can best be described as not only that of a Winner and a Loser, but a Survivor. A true Survivor.

Readers will revel in travelling to every corner of the globe on one bizarre adventure after another, to the extreme, opposite recesses of an often hysterical, often dark and twisted, and always outrageous mind.Been There, Done That follows one person—self-described as short, bald, funny-looking and now old—on his quest to live his life to the max or do his damndest to die trying. Been There, Done That is not only the story of one Rick Bassman. Readers will find something of themselves in Bassman’s courageous quest and unflinching determination to live life to the fullest, on his terms, no matter the insurmountable obstacles.

Been There, Done That is not the conclusion of the Rick Bassman story. Far from it. There’s still Chapter Nine and you’re part of that. Will you help Rick so that he can share his inspirational story of survival, of beating overwhelming odds, again and again, with others?

Kickstarter: LINK HERE


Press Contact for Rick Bassman:

Liam Collopy


LCO – Levine Communications Office Inc.

9100 Wilshire Blvd., Ste. 540 E. Tower

Beverly Hills, CA 90212

E: lcollopy@LCOonline.com

T: 310.300.0950 x 308