Top Ten Crowdfunding Predictions For 2014

shutterstock_142046731-800x752I saw this article published today on the MedCityNews website and found these predictions to be most astute and would like to share them with my readers:


1. Utilizing Social Graphs – Implementing social graph application programming interfaces (APIs) for crowdfunding platforms will make it easy to see friends of friends who are investing in crowdfunding campaigns due to popular social media networks such as Facebook, Google+, Linkedin, Meetup, Pinterest, Twitter, YouTube and others. Data mining and big data services will become very sophisticated services for the crowdfunding industry. Once these services get started it will be very hard for fraudulent companies to succeed because they will vetted by millions of investors working together to form a policing crowd.

2. Predicting the Success of Crowdfunding Campaigns – Investment professionals will develop crowdfunding campaign evaluation systems that break down campaigns into easy to evaluate modules similar to the way the crowd of fantasy football gurus rate individual players based on their performance. Utilizing a crowd to rate crowdfunding deals by various categories will make it easy and simple for large number of non-investment professionals to vet deals together.

3. Growing an Industry Crowdfunding Service Providers (CSPs) – In order to help 229 million new investors vet deals the crowdfunding industry is going to spawn a tremendous amount of new CSPs that will help novice and accredited investors examine equity investment deals to determine potential success or failure. To date our database includes CSPs that provide white label crowdfunding platforms, payment processing, SEC compliance, digital signatures, legal documents, intellectual property (IP), valuation calculators, investment scoring, due diligence, social trust, business planning, marketing, PR and social media and marketing companies.

4. Rising Stars of Crowdfunding Content – The demand for crowdfunding TV programs will grow exponentially to provide content similar to the Shark Tank, but without the bite. Whereas reality TV shows currently feature drama that bashes unprepared entrepreneurs, the American public will be drawn to programming that educates startups on how to launch successful crowdfunding campaigns, build vertical business-to-business crowdfunding platforms as well as how to vet and invest in Crowdfunding equity investment opportunities.

5.Creating Economic Development Centers – For the past 10 years banks have denied small businesses access to startup capital. In a town of 50,000 families, equity crowdfunding will allow each family to invest up to $2,000 per year into local businesses the community needs and wants. This will create an investment pool of $100 million dollars each year that will not only create lots of jobs, but allow everyone in the community to encourage, steer and participate in the prosperity of the community. Investing locally as a crowd will make it easy to vet and assess cooperative crowdfunding deals for the social good of the community.

 

Read more: http://medcitynews.com/2014/01/top-10-crowdfunding-predictions-2014/#ixzz2pC29y43A

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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.

 

Yesterday’s Crowdfunding Seminar By CJ Cornell of Propel Arizona at SMAZ6

At yesterday’s Social Media Arizona #smaz there were many speakers covering different social media related topics and the one that interested me the most was the Crowdfunding seminar presented by CJ Cornell of Propel Arizona

CJ Cornell is an ASU Professor and the founder of Propel Arizona.

In a nutshell, Propel Arizona is a Crowdfunding platform for Arizona Entrepreneurs.

But it’s much more than funding, Propel Arizona is a way to get all of Arizona involved with innovation, and helping to build the next Google, Apple or Facebook.

Propel Arizona is a broad initiative designed to help drive economic growth in the state of Arizona by providing an environment where people can support and help the entrepreneurial ventures, innovative ideas, projects and the entrepreneurs that build them.

Online, Propel Arizona allows entrepreneurs with projects or ideas that one day may be wildly successful, to engage with the community and enlist their support – financial support and other kinds of important support.

Specifically, Propel Arizona is about “Crowdfunding” entrepreneurs and innovative projects that have the potential to become wildly successful – perhaps in the Facebook-Google-Amazon kind of way that generates jobs, wealth and inspires even more entrepreneurs and new ventures.

Members of the Arizona community can get involved with the excitment of the entrepreneurial startup – from concept to product to market – and become early funders of promising projects.  In the end, helping these potentially high-growth entrepreneurial projects become successful, will help contribute to the overall economic growth and prosperity of all Arizona.  Every Propel Arizona member gets to fill out their own profile page (1), can add projects needing funding and post a blog post promoting their projects.

(1)