Posted on

2012: The Year Crowdfunding Was Kickstarted Into The Mainstream

By Matt Burns for Techcrunch.com

There we were, circled around a bachelor party campfire and drunk on keg beer, discussing the viability of using Kickstarter to fund a sex toy startup. My buddy Derk (he goes by Dangerous D at karaoke) had designed and handmade a compact speed controller for small vibrators (pic below). He was selling them at $75 a pop and apparently – I have yet to see or try one – they were getting rave reviews. Dangerous D’s Magic Box, he called it. Another friend and I were passionately trying to convince him to quit his job as a store manager and start a sex toy startup. We were positive, and a bit drunk, that all he needed was a successful Kickstarter campaign. The video would obviously be key.

It was then I knew that 2012 was the year of crowdfunding. It’s a household term now. This year saw the birth of the Pebble Smartwatch, iPhone-powered gTar, OUYA gaming system, and literally tens of thousands of arts, media, and design projects. And those were just on Kickstarter. Other projects turned to Indiegogo, RockThePost, and Quirky. Some startups like Lockitron even went at it alone, conducting their own crowdfunding campaign themselves.

Full Story

Posted on

Platform Review: Razoo

Summary: Razoo has helped nearly one million officially registered nonprofit organizations to crowdfund. The site allows nonprofits to accept donations on their own website or on their Facebook page. Fundraising causes are organized into categories like animals, arts, cancer, disaster relief, environmental, and more. Charities can also post their fundraising events, including memorials and walkathons.

Best Feature: Razoo allows charities to create a profile for their cause, complete with video and photos. The site offers detailed examples of fundraising ideas for nonprofits to get started, and hosts “giving days,” which are 24-hour online fundraising competitions. The site also offers an iPhone app and donation widget for the organization’s website or Facebook page, which makes receiving and tracking donations a breeze. Tech-savvy individuals will like Razoo’s iPhone app, which allows users to receive notifications when someone donates, and includes an option to thank each donor individually.

What To Consider: You must be an officially recognized nonprofit to use this service. Razoo includes a list of approved charities, but if yours isn’t on the list, you can email your letter of determination from the IRS directly to Razoo so they can include it. You can learn more about this here.

Ideal User: Razoo is a good choice for nonprofits looking for an easy way to manage and encourage donations via web and social media.

Cost: The site charges a flat rate of 2.9% on all donations to cover credit card processing costs. Users can set up a fundraiser for any charity with no setup fees or monthly subscription fees.

Posted on

Investment banks: Gatekeepers no more as Crowdfunding changes the game.

By Kristin Voinovich For Venture Beat

January 6, 2013 12:18 PM

Investment Bankers have traditionally been the gatekeepers of access to the capital markets.  It is time for crowdfunding to play a greater role.

The caliber of underwriting firm is often an indication of the quality of the issuing company. The investment banks are paid well for that implicit endorsement, but that puts their reputations on the line. Their success is tied to the execution, after market performance and perception of the deals they complete –so they had better be selective and smart.

However, the banks are not infallible. The capital raising process has been inexorably altered by many different changes to the funding environment.  I am not talking just about the botched Facebook IPO either.   But the banks are pretty good.

The playing field between institutional investors and “mom and pop” is not level.  The market is driven by inefficiencies and the average investor is generally on the wrong side of the spread.  The differential comes down to knowledge.
Full Story

Posted on

The Crowdfunding Crowd Is Anxious

By AMY CORTESE for NY Times

RYAN CALDBECK was stumped. A director at a private equity firm, he was taking part in a panel discussion at a consumer goods conference last summer in New York when an entrepreneur raised his hand with a question: Where could a young company with just a few million dollars in sales go for money to grow?

Mr. Caldbeck and his peers on the panel fumbled for a response. The fact is, most private equity investors and venture capitalists won’t touch a consumer products company until it has surpassed $10 million in sales — anything else is too small to bother with.

The best advice the panel could offer was for the entrepreneur to tap his credit cards.

“The purpose of the panel was to help entrepreneurs raise money, but we had no answers,” Mr. Caldbeck remembers. “That’s when I knew that there is a big issue here.”

Full Story