Crowdfunding-QUILs-DIY

Published by Forbes  | By Gary Dushnitsky | 

What If Crowdfunding Becomes The Leading Source Of Finance For Entrepreneurs Or Growing Companies?

Can crowdfunding offer a viable source of funding to growth orientated businesses around the world? 2015 promises to be a big year for crowdfunding in terms of the role it may play in getting entrepreneurial ventures off the ground. What might that world look like if it became the leading source of finance for companies starting out? To that end, one has to better understand the phenomenon and its rapid expansion to date.

Why now? In 2014, the total global capital raised through crowdfunding platforms stood at $16.2 billion, according to a study by crowdfunding research firm Massolution, which was cited by the Economist. The number of crowdfunding platforms has experienced dramatic growth over the past decade. In Europe alone, I’ve observed the number of platforms growing from less than a dozen in 2009 to more than 10 times that in four years. Policymakers, to a large extent, have catapulted crowdfunding into global awareness.

The Jumpstart Our Business Startups ACT in the U.S., and similar legislation across the world, opened the “regulatory door” to this innovative funding approach. Before the act was passed in spring 2012, crowdfunding sites could reward investors with just products or discounts. But the act has given them the freedom to offer backers a stake in the business.

By analogy, the origin of the venture capital industry is often credited to another regulatory change, the Prudent Man Rule of 1979, which allowed U.S. pension funds to allocate a fraction of their assets under management towards risky investments. A supportive regulatory environment will be instrumental to the continued growth of crowdfunding as a credible and persistent alternative. It follows that crowdfunding will proliferate in those countries where regulators can balance the potential – and challenges – associated with the funding source.

Of the different types of crowdfunding models, there are four in particular experiencing high levels of traction:

  • Donation‐based (where contributors are motivated by social or intrinsic goals)
  • Rewards‐based (where contributors are effectively pre‐purchasing a product or service)
  • Debt crowdfunding (where contributors receive a debenture)
  • Equity crowdfunding (where contributors receive an equity stake in the funded company)

Success and failure can look very different for venture capitalists and crowdfunding investors. Oculus Rift, the virtual reality headset developer, is a case in point. In 2012, the company secured $2.5 million from more than 10,000 individuals on the reward‐based platform Kickstarter. Yet, the $2 billion Facebook acquisition two years later did not generate the anticipated jubilation among the crowd who’d supported the deal from the start.

Rather, the media reflected contributors’ disappointment and anger, such as “I backed Oculus Rift on Kickstarter and all I got was this lousy T‐shirt.”

The discussion charts the nature and scope of crowdfunding’s ultimate success. New pools of capital will become available alongside traditional investors (i.e., angels, VCs or banks) as well as in previously underfunded domains (e.g., deployment of renewable energy solution or social housing).

The key to realising such potential is threefold. First, it calls for informed entrepreneurs and contributors. Of course, financial reward is a marker of success. But it’s also important for entrepreneurs to recognise the value of fostering strong relations with their contributors, keeping their own ambitions and their contributors’ reasons for supporting them aligned. Second, the funding landscape will need to adapt to specific demands.

Different crowdfunding solutions will suit different start‐up phases, for example working capital needs may be financed through pre‐order sales on reward‐platforms, while specific objectives such as meeting upfront fixed costs might be done via contributions on donation‐platforms. Third, it will need a robust regulatory framework to support its development and growth. The right regulatory oversight will reflect the realigned landscape and offer a prudent environment that ensures transparency and safeguards to the crowd of investors.

 

 Dr. Gary Dushnitsky is an Associate Professor of Strategy and Entrepreneurship at the London Business School. His work focuses on the economics of entrepreneurship and innovation.

6 Epic Crowdfunding Trends

Published by UP Investments  | Dec 15, 2014

Invest “Reasons to be cheerful…..”

It’s that time of the year again where I look into my dusty crystal ball and (attempt to) offer wisdom and intelligence. Lucky you. Forecasts are a difficult enough practice in normal circumstances, let alone an election year, but that said it’s highly likely that SMEs and crowdfunding will escape the ravages of any electoral earthquake. Politicians thankfully don’t mess with the little guys. Those dirty banks though, easy pickings. So here you are, the six epic trends, which will transform crowdfunding in 2015.

Reasons to be cheerful – part 1

Crowdfunding is gearing UP to kick ass

As investors and businesses awareness of crowdfunding grows in 2015 the already heightened interest in crowdfunding will turn into a flood. Crowdfunding has been a novelty, with the media interest partly due to the fact that finance is actually incredibly boring to report on. Stocks, shares and banks miss the human touch. Crowdfunding is an exception to the rule. It’s about the people, stupid! As crowdfunding goes mainstream, 2015 will bring normalisation to how the crowdfunding process is perceived.

Reasons to be cheerful – part 2

UK government support for crowdfunding will endure and grow

Next year is election year, and as you know it’s hard to say in election years what measures the new incumbent party will choose to support. There has been little on the political landscape to support any argument that political support for the alternative finance sector will change. In fact, with the UK discovering a world-leading niche with the fintech sector, support for tech and finance is likely to grow, even potentially through direct government investment. Further tax incentives, changes in the way banks treat failed loan application and greater awareness at the very top, will ensure continued strength in the already rapidly growing industry.

Reasons to be cheerful – part 3 

The entrance of mainstream companies and banks into the crowdfunding scene

There are smatterings of rumours within the industry that many of the old digital guard (Paypal, Ebay, Amazon) are looking at the sector as a way to build fresh new revenue models. In 2015 we will start to see an indication of how they will look to mobilise their large networks within crowdfunding. Likewise banks, which have viewed the sector with utter ambivalence, are starting to take notice. Whilst banks are utterly constrained by regulation, and therefore struggle to compete with new innovative business models, it is safe to expect to see banks investing and partnering up with crowdfunding sites. The effect of their entrance could transform the sector (I’ll leave it to you to decide whether that’s a good/bad thing).

Reasons to be cheerful – part 4

The FCA is about to turn the heat UP

In a growing young industry there are always going to be catch up between good practice, as defined by the regulators, and the crowdfunding sites themselves. Expect the FCA to make examples of bad practice. Lots of them. This will help crowdfunding in the long run in become the strong trusted industry everyone is forecasting.

Reasons to be cheerful – part 5

Crowd-lending ISAs are a BIG deal

2015 will bring a third ISA to the market, which will be based on loan-based crowdfunding. Can’t really understate the massiveness of this one. Many have as a consequence forecast that this will open UP access to £50bn a year of retail money. By all accounts this will be a huge transformation within the crowdfunding world, as well as signalling that crowdfunding is going mainstream. Also public awareness of crowdfunding will be transformed this time next year due to this change. Exciting stuff.

Reasons to be cheerful – part 6

Worldwide crowdfunding will continue to grow massively

Whilst the UK is the most advanced western crowdfunding marketplace, worldwide crowdfunding is catching up. A recent report suggesting crowdfunding was growing at 10x the rate of Moore’s Law. WOW. Alternative lending will continue to grow at around 200% a year globally. The 2013 Massolution report suggested that global crowdfunding had reached circa $5bn. With Nesta in Nov suggesting the 2015 alternative finance market in the UK alone would reach £4.4bn, it’s clear that global figures are going to be much higher. #theonlywayisUP

Reasons to be cheerful – part 7 (I lied when I said there were only 6 reasons – this one is HUGE)

P2P lenders tax relief

‘The government will introduce a new relief to allow individuals lending through P2P platforms to offset any losses from loans which go bad against other P2P income,’ said the Autumn Statement document. I think that sums it up nicely. Expect more investors viewing P2P as a viable lending option, in a similar vein to SEIS and EIS on the equity side.

There you have it. It’s safe to say that 2015 will be exciting for everyone involved in crowdfunding. It’s not just massive growth within the sector that is so intoxicating, but the way more and more businesses, investor and ordinary people are looking at crowdfunding as a weapon of empowerment. Now that can’t be a bad thing. As a site which works with every part of the UK’s crowdfunding world, we at UP are pretty excited to be launching with this backdrop. Bring on 2015.

Sign UP now here and get involved in the revolution.

5 Tips

This article is a guest submission by Dana Ostomel, founder and Chief Giving Officer of Deposit a Gift.

5 Crowdfunding Tips

Engaged, invested, involved. When you run a crowdfunding campaign, your goal is to turn your supporters into advocates, so they not only give, but help you spread the word. It’s no easy task to accomplish, but can be the difference between a campaign that just does ok, versus one that knocks it out of the park. Here are a few tips for a highly engaged campaign:

Visualize Before, During, and After

Having a marketing plan, that details intricately the steps you will take, to launch, and promote your campaign is incredibly important. This is crucial to have, before you even officially launch. It provides guidance on how, when, and where, you will communicate with supporters, to incite them to open their wallets. Many organizations just put up a campaign, without thinking about the steps needed to make it successful; They end up setting themselves up for failure. Depending on the relationship that you have with your community, it’s possible that a week’s prep is enough, while for others, it may take months to prime the audience. Having an action plan of exactly what your campaign promotion will look like, before it even begins, is one step that will put you on the road to success.

Tools For Engagement

Sterile campaigns go nowhere. You want your campaign to not only engage new contributors immediately, but be compelling to share, which is the key to leveraging the power of the crowd. When you personalize your campaign through unique hashtags, compelling images and announcements, you give your audience the tools to connect with your campaign so that they feel invested enough to share it with their friends. Unique Hashtags also give your campaign it’s own special way for people to find and share you on social media . It allows your appeal to stand out from the crowd, and is a great way brand your campaign.

The Power of Appreciation

You can only ask people to give so many times before it becomes annoying, and they tune you out on social media or delete your emails. That doesn’t meant that you should let communication fall by the wayside. On the contrary, you need to be emailing and posting daily, but, do it strategically. Send out announcements when you reach certain goals. Thank people for their support by tagging them on FB and Twitter so that others see who is getting involved; it reduces the bystander effect and it makes them want to get involved too. Everyone likes feeling acknowledged, and important. This brings us to our next point.

Turn Supporters Into Ambassadors

To get people to help, they need to feel like they are a part of your campaign, not just another wallet. So devise tools to enlist their support. Ask them to join your ‘online street team’ and then give them ways to participate, such as being part of an ‘email tree’, or sending out scripted emails. As people donate, part of your follow-up strategy should be to ask friends, family, and new supporters to share. Have them share on all of their social media channels and to send out emails, to family, friends, and anyone they think might contribute. Make it easy for them to do this by writing the posts and emails for them to simply copy/paste. Get your donors to do the work for you. Let them know that the success of your campaign depends on them.

Maximize the Newsletter

In order to keep your community interested and engaged, they need to know what’s going on. A newsletter is a terrific way to keep people informed and make them feel a part of the journey, which is what ultimately leads to them feeling invested in your success. People want to know how their money is being spent, what is going on with your campaign and what your plans are for the future. A weekly newsletter, allows you to do all that and more. Make it informative, include pictures, personalize it. Use the newsletter as a tool, to keep people interested. Think of it as a way to create a community of people, who are supportive and invested, in your campaign, and organization.

These are just a few of the tips and tricks that we’ve learned after helping many campaigns get off the ground to a successful start. We are always available to help you get a campaign up and running. Interested in starting your own crowdfunding campaign? Click here to check us out!

Dana Ostomel from Deposit a GiftDana Ostomel is the founder and Chief Gifting Officer of Deposit a Gift, the crowdfunding platform for personal and organizational fundraising that allows anyone to easily create an online fundraising campaign for any organizational, school or personal need. Whether you’re a nonprofit or school looking to get into crowdsourced fundraising, or an individual looking to raise money for a personal project, business, disaster relief, memorial fund or help with medical bills, Deposit a Gift makes it easy.

BidOkee-Loyalty-DIY

A lot of crowdfunding campaigns offer backers swag like T-shirts or virtual rewards. BidOkee’s model takes things a serious step forward.

BidOkee’s loyalty program lets you reward your backers with valuable points they can use in BidOkee’s auction hub and ecommerce store. That gives real value to the reward points you offer. It also drives supporters to your site and encourages them to increase their pledge levels.

There is nothing in the crowdfunding world quite like BidOkee’s loyalty rewards program. It is a powerful tool for recruitment, retention and social sharing.

The quality of loyalty rewards programs broadly depends on: the ease and rate of point collection; breadth of collection opportunities; ease of redemption; extent of redemption opportunities; and holistic, experiential merit (how it feels to participate).

Compared to other loyalty programs, BidOkee offers ease of acquisition, with slightly more involved redemption schemes. BidOkee excels at the rate of collection, and overall fun of engagement.

The DIY culture means consumers expect to have equity, fair play, transparency and control over their circumstances. They want to know that the information collected on them will benefit them, not just the company. They want to know that the social currency they provide a company will benefit them also – via rewards. BidOkee honors these beliefs.

BidOkee’s crowdfunding experience allows backers to amass Net Worth, in the form of soft currencies – in this case BidOkee points. These currencies can be used in the BidOkee MarketPlace to participate in auctions and contests – providing tangible value to users and a return on investment to campaigners. The MarketPlace, where backers can utilize their Net Worth points by participate in fun, exciting and competitive auctions and contest giveaways, also has a “Buy Now” option where users can utilize their loyalty rewards for immediate purchases.

Loyalty rewards are earned based on BidOkee’s ‘give or get’ approach. Either earn loyalty rewards by financially supporting a campaign or earn loyalty rewards by referring others to a campaign. Either way, the user earns points and becomes a backer of a campaign. Campaigns win by increasing their user base, which earns them revenue through actions taken on the BidOkee MarketPlace or by obtaining more donations because backers earn great loyalty rewards.

But campaigns also win by placing their innovative inventions and products on the BidOkee marketplace. This is where millions of users from thousands of campaigns can utilize their loyalty rewards to purchase these products, driving revenue and new backers for startups from unanticipated prospects.

Beyond an outstanding return ratio to campaigns, loyalty rewards via gamification and on-trend design differentiate BidOkee from other crowdfunding campaigns.

Reciprocal loyalty is also the foundation upon which BidOkee is constructed. Reciprocal loyalty is two-way loyalty, where backers support BidOkee through social@thecore activity, being remunerated with high-value intangible and tangible rewards.

Loyalty rewards are just one of the unprecedented features that make BidOkee a revolution in crowdfunding.

We are building the world’s first cooperative do-it-yourself crowdfunding platform, which will allow anyone to build and run their own successful crowdfunding campaign. Loyalty rewards are a powerful tool to drive support to your crowdfunding campaign.

We have built the platform and now we are raising the capital to turn it into a do-it-yourself tool that can help everyone reach their crowdfunding objectives. And we need your help.

We are crowdfunding for crowdfunding. With your support, we will soon launch BidOkee as the world’s first gamified do-it-yourself crowdfunding platform with features not offered by the crowdfunding mega-sites.

Will you join the revolution? Click here for more information and to support BidOkee’s crowdfunding for crowdfunding campaign.

 

Campaign Backers

There is no greater asset to a crowdfunding campaign than the network of people supporters you build.

Yet this invaluable asset is something crowdfunding mega-sites like to keep to themselves or share with you only if your campaign succeeds.

Through our own research, we estimate that the average campaign garners 302 subscribers.

As you build your crowdfunding campaign, you are building a community, a network of backers and friends. Yet, when your campaign ends, you may lose them if your campaign is unsuccessful. And we know a majority of campaigns fail to meet their goals. Therefore, despite the fact you did the work and expended the resources to attract users to your campaign, the crowdfunding mega-site retains the information for their own benefit – not yours. It’s a great deal for the crowdfunding platform, which gets to monetize the users you attracted to their site. These are backers who have shown some interest in your product and your campaign. You should be able to communicate with them.

BidOkee has a better way.

When you build your crowdfunding site on BidOkee, your network will remain your network. Your friends will remain your friends. Your community is your community.

When your campaign ends, you can launch another one. You can initiate stretch goals. Or you can send your network over to support another great campaign that you love. It’s your choice.

The only way crowdfunding works is through building networks of people. Shouldn’t you be able to keep those networks yourself? BidOkee thinks so.

If you agree — and why wouldn’t you — help build BidOkee by supporting our crowdfunding for crowdfunding campaign. 

We’re all in this together.

BidOkee's DIY Crowdfunding Site

In today’s world, especially because of Millennials who are behind many of the one million start-ups each year, customer and user empowerment is shaping entire industries. The technology revolution is about empowering the individual to take control of their environment.

Mobile technology provides instantaneous freedom that empowers the individual – such as our smartphones and tablets, which are replacing desktops and laptops and which may one day themselves be replaced by wearable gadgets.

The advent of social media has transformed media altogether, providing an immediate outlet to millions of people to create success stories overnight or, on the other hand, ravaging people and companies just as quickly. The power of instantaneous communities is shaping politics and creating revolutions.

And this has created a do-it-yourself (DIY) culture that is expected and demanded by a generation that is liberated by technology. DIY is now mainstream and has turned the table on big corporations. Rather than being spoon-fed by advertisers telling us what we should think, this generation of savvy technology users is telling corporations what they want and expect. Corporations are getting their marching orders from the masses via social media and app connectivity. The DIY culture expects equity, fair play, transparency and control over their circumstances. They want to know that information collected on them will benefit them, not just the company. They want to know that the social currency they provide a company will benefit them too.

Part of the DIY culture is the sharing of things, especially as the world becomes smaller via social media. As a result, a collaborative environment – or cooperative model – is emerging on the internet where people are empowered individually and as a result are sharing collectively. The more empowered people feel, the more they wish to share and help others.

And as the DIY culture continues to emerge, individuals are looking for more customization that will meet their personal goals, yet still allow them to participate collectively. That means they want to be self-empowered, with the ability to control (and monetize) their own information or to use it to benefit others.

There is a collision imminent between these expectations and the way crowdfunding is operating today.

It may seem obvious, but your crowdfunding site and the community you build on it should stay in your hands.

And yet, in almost every case, the crowdfunding mega-sites maintain ownership over your site and the information about the people who come to it. This goes against the emerging DIY collective culture that is driving people to build their own websites, fix things around the house with help from the local building centre and the overall do-it-yourself attitude.

BidOkee has a different way of doing things.

BidOkee is building a gamified DIY crowdfunding platform that will allow anyone to build — and own — their own crowdfunding site.

The content is yours. The web address is yours. The branding is yours. It’s all yours.

It’s a wonder nobody thought of it before.

When you own your own crowdfunding site, you can mobilize your network for stretch goals or subsequent campaigns. When you have successfully reached your goals, you can mobilize your networks again in support of other campaigns you love. Owning your own crowdfunding campaign site just makes sense.

BidOkee is making it a reality.

We need you to make BidOkee a reality. Please support BidOkee’s crowdfunding for crowdfunding campaign and check out the amazing rewards you can get, including subscriptions when we launch that will help you reach your goals quickly.

crowdfunding-canada

Virgin Startup signIs this the start of a new trend – or even a new phase – in crowdfunding? Might it be another step in rewards crowdfunding ‘coming of age’ in the UK? It’s certainly getting noticed as the route of choice to seed a startup.
In a an interesting move Crowdfunder UK has hooked up with Virgin Startups – who worked with the UK government to create it’s flagship ‘Startup Loans’ scheme – is to offer loans to those who raise funds on their rewards-crowdfunding platform.
The logic is that ‘it’s about validation of the idea” in the belief that ideas ‘that are successfully crowdfunded are likely to be viable businesses” and “therefore more suited for one of [Virgin Startup’s] start-up loans”. Which, they say “is good news for anyone in need of help turning their idea into reality”. Which rather makes it sound like an option for anyone who has successfully raised a crowdfund.
Richard BransonCertainly a venture which has managed to create a product or proposition and persuade enough people to part with some cash in order to raise the money needed to make it a reality has gone a very long way to proving that a market exists – and that they can reach it. That’s a key part of the power of rewards crowdfunding. It does not however make the venture, at that early stage (which now has the money it needs to progress and prove itself) necessarily a good candidate for a startup, or any other kind of, loan.
Virgin Group Founder, Sir Richard Branson, is quoted as saying, “The great thing about being an entrepreneur today is the vast array of funding options available. The partnership between Crowdfunder and Virgin StartUp is a unique way for entrepreneurs to secure funding and receive the support and information they need to get their business ideas off the ground.” However – it’s unlikely to remain unique for long as undoubtedly it will be, cloned by others.
CrowdfunderIn fact unless and until there are revenues available to service such a loan, or at least they are clearly in sight or there’s some other means of servicing the debt, it’s really not advisable for such a startup to be taking on such a burden. By their nature very few such seed-stage businesses have reliable revenues, a steady income, to support borrowing. Which is why crowdfunding is such a great alternative in the first place.
jess rattyI’m sure that both Crowdfunder and Virgin Startup Loans are reputable companies with good intentions – and it’s reassuring to hear that the amount of such loan offers will be set by the Virgin Startup team. Crowdfunder’s communications manager  Jessica Ratty, kindly also confirmed “It’s not automatic and project owners will be undergoing an application process with Virgin Startup. Crowdfunding will be “assisting with eligibility” for loans.
But it would be a mistake to leave the impression that loan availability may be triggered by a successful raise because if this were the case it would be dangerous, and otherwise misleading.
 
Equity vs DebtOf course not every crowdfunder will want or apply for a loan – but neither should they be under any commercial or other pressure to take one. Especially at a moment of euphoria having just achieved their goal and, quite understandably, feeling on top of the world.
Handled well this combination could help a minority of crowdfunded entrepreneurs further accelerate their ventures.
But this approach is likely to be copied and in other hands however this would undoubtedly pose a real danger to some over-exuberant entrepreneurs unused to such success and tempted to take and spend a loan they think they can repay in the moments of exuberance but which could prove the undoing of their venture in the medium or longer term.
Crowdfunding has proved to be a very effective antidote to the effects of irresponsible lending. It would be a very great pity if, at a time when it’s won it’s spurs and is making great inroads, in an attempt to ‘gild the lily’, it not only marred that record but led to more irresponsible lending, with all the misery that can entail. If this combination is copied elsewhere it is vital that this is done responsibly.

barry-jamesBarry James is the co-founder of TheCrowdfundingCentre and the Social Foundation. Founded in 2012, the organization was created to further research, education and policy initiatives into the new, post-crash economy and “Crowdnomics”. James also created “Crowdfunding: Deep Impact”, the UK’s first national conference held in February 2013 which led to the influential Westminister Crowdfunding Forum. James is a frequent speaker on crowdfunding, entrepreneurship and innovation. He has recently created CrowdPowerTools.
Crowdfunding-Pay-it-Forward-DIY

When your crowdfunding campaign succeeds, it will be because of the network of concentric circles you built around your friends and family, stretching out to people who may not know you but who are inspired by your idea.

When your campaign ends, your community doesn’t have to.

At the beginning of crowdfunding, when there were far fewer campaigns, there was a possibility of being “discovered.” Even then, having existing social capital – networks that can be mobilized through online sharing – was crucial to success. Now it is one of the only avenues through which campaigns can succeed (unless it is one of the rare campaigns to receive national media attention). As “discoverability” has ceased to be something the mega-sites can offer, their only value now is as a medium, as a platform, even with all their associated faults.

Today, social networks are considered tangible valuable assets, and these assets are denied by mega-sites to the majority of crowdfunding campaigns.

The BidOkee DIY model leaves this network asset information in the hands of proponents, allowing successive rounds of fundraising, stretch goals and on-going revenue. This model permits and encourages the nurturing of the crowd – the networks built and sustained by the campaign initiators – as an on-going asset and community. This is the least that should be expected in a customer service-driven culture. Yet it is fundamental to the crowdfunding mega-sites that this crucial data be withheld from the campaigns and exploited by the mega-sites. This is not sustainable and proponents will soon be demanding fairness on this front.

BidOkee’s DIY model is tailored to precisely address this pain point and help campaigns build concentric circles of community networks. Our model is social@thecore, tangibly rewarding backers for sharing with their networks through a four-generation referral system and building communities that can later be mobilized for campaigns initiated by backers themselves. It is a sort of open-source crowdfunding with a pay-it-forward mentality of crowdfunders helping other crowdfunders.

The pay-it-forward philosophy of BidOkee is about a collective community assisting each other with resources to advance each campaign so that the over 60% of failed campaigns within the industry can become a majority of successful campaigns.

We all know that the crowdfunding industry is growing, with over a million projects launched annually. And now the big consumer and retail companies are getting in the game. Therefore, it is becoming more remote for a grassroots crowdfunding campaign to succeed – unless a new model of cooperation is created that allows successful campaigns to help new campaigns launch.

We know that getting a crowdfunding campaign off the ground can be hard work. Nobody knows that better than people who have successfully completed a crowdfunding campaign. So, when your campaign ends, BidOkee lets you pay it forward by mobilizing your network of supporters to move to another campaign you love.

It could be your campaign. It could be a friend’s campaign. It could just be a campaign for a product you think is cool. It’s totally up to you.

That’s revolutionary. On crowdfunding mega-sites, when you’re campaign ends, your network of supporters disappears. Not on BidOkee.

BidOkee is a building cooperative model of crowdfunding. We are building a do-it-yourself crowdfunding platform that lets anyone build and run a successful crowdfunding campaign with built in mechanisms for successful sharing, collaboration and cooperative use of resources. And that is why BidOkee is set up to hare over $100 million in revenue with our crowdfunding clients annually.

Our cooperative model lets you share your success with others by paying it forward.

First, though, we want you to help us succeed so we can help you succeed.

BidOkee is crowdfunding for crowdfunding. We have built the platform and are now raising capital to turn this revolutionary tool into a do-it-yourself crowdfunding site that lets anyone build and launch a successful crowdfunding campaign.

If you help us meet our goals, we’ll help you meet your goals. That’s the pay it forward model driving the BidOkee project.

Crowdfunding-8Problems-DIY

Crowdfunding is growing massively – over 1,000% in just five years.
Like a lot of new industries, though, crowdfunding faces a do-or-die moment.

There are inherent challenges in crowdfunding as it exists today that probably hold the seeds of failure for the entire model. Like the promising software programs and platforms of a decade or two ago, the crowdfunding mega-sites of today may be destined to be mere memories tomorrow.

Here’s why, in eight simple numbers.

Lack of flexibility
Crowdfunding mega-sites are take-it-or-leave-it, one-size-fits-all cookie cutters.

Time limits
Arbitrary time limits are among the main reasons why more than half of all crowdfunding campaigns fail.

All or nothing
Raise your entire goal amount of get nothing. Another arbitrary rule that contributes to failure, not success.

Monuments to failure
Want your unsuccessful crowdfunding campaign to remain online forever as a monument to failure? Well, that’s one way the crowdfunding mega-sites are willing to oblige you.

Secrecy and control
Crowdfunding sites maintain control of the user data for the networks and community you build.

Acceptance barriers
After you’ve investigated the hundreds of different types of crowdfunding platforms out there to find the one that best suits you, you can ask politely to join. The answer is often no.

Inherent competition
Want your campaign to be viewed right next to hundreds of featured competing projects? Crowdfunding mega-sites seem perfectly built to undermine your success by putting you up against hundreds or thousands of other projects.

Lack of features
Want to tweak your campaign site? You can’t. Want ecommerce features, cool tools, loyalty rewards or anything fun? Forget it. You’ll take what the crowdfunding sites offer and you’ll like it.

Until something better comes along, these are the eight main problems that define crowdfunding today.

Hoping for something better?

 

27AB258900000578-0-image-a-8_1429276244701

By MARC SHOFFMAN FOR THISISMONEY.CO.UK

There is plenty of independent information when it comes to choosing funds and shares, but how do you know what to look for in a crowdfunding project?

You are left to do your own research on peer-to-peer and crowdfunding platforms as there is little independent information on projects or the platforms you are putting money into.

Now a new crowdfunding analyst firm called All Street has launched with the aim of plugging this gap, we reveal how to assess a crowdfunding project.

From breweries to people and businesses, crowdfunding provides hundreds of opportunities for investors to lend money directly to a range of projects.

You can either provide a personal loan using peer-to-peer, also known as lend-to-save, or get a stake in a new business or project on a crowdfunding platform.

Platforms have to do due diligence on those both lending and asking for money, but the only way of investors assessing offers is by reading the information the business makes available.

The risks are supposed to be outlined through the platform you use, but you still have to make a decision about investing in a person or project with information from just one source.

In contrast, a fund or share would have data such as company accounts, financial metrics that show their risk and performance history, as well as independent analyst reports on their prospects.

So how do you know if a crowdfunding project is any good and even if the platform itself is safe?

AllStreet, which has also launched its own crowdfunding campaign to raise £15,000, says it will help investors make more informed financial decisions by providing independent reports on opportunities.

For a £25 monthly subscription, investors will be able to access five reports a month from All Street that will provide an assessment of a peer-to-peer or crowdfunding opportunity, analysis of the business model and wider market views.

It will also look at who is behind the platform the project is listed on.

It’s worth bearing in mind that while investors can benefit from good independent research, the cost of a service like AllStreet’s can swiftly mount up and represent a hefty chunk of the relatively small amounts many people invest in crowdfunding. A £25 monthly charge amounts to £300 per year for what is ultimately a limited service.

If you are considering signing up for this kind of service, make sure that you can cancel your subscription if you do not feel that it is worth having.

Investors considering crowdfunding should also remember it is high risk. Experts advise that you should only allocate a small percentage of your investable wealth to these kinds of investments.

It is is also important to remember to spread your risk. Professional investors who run small company and venture capital funds will often own stakes in 50 to 100, or even more companies.

Investors in crowdfunding can easily get carried away by the story being sold to them and should be very careful not to put too many eggs in one basket.

Emanuela Vartolomei, founder of All Street, said: ‘Crowdfunding is transforming the investment market and opening it up to us all. Whether you have a little or a lot to invest, everyone can support companies or projects they believe in and really make their money work for them.

‘However, investing money in start-up firms brings its own risks and it is important that individual investors are aware of what those risks are and have all the key information at hand in order to make better investment decisions.’

How should you assess a crowdfunding investment?

All Street has outlined five top tips to help you decide.

Do your research

Don’t just decide based on the crowdfunding page and video. While platforms do some basic background checks, you have to be comfortable that the project is what you think it is and taking their word for it isn’t always enough.

Investors should get as much information as possible. Even if it’s not such a large amount, you don’t want to be investing your money into a company whose issues might not be immediately apparent.

Pick several projects in different industries

Investing all of your money into one project could increase your chances of losing money or leave you feeling unsatisfied if for example the social impact project that you supported has failed.

Choose projects that operate in different markets or target different audiences to improve your chances of getting the social impact you want or bringing the financial return you hoped for.

Be clear about why you are investing

There are no guarantees in crowdfunding and thinking carefully about why you are supporting the venture will help you make decisions that you won’t regret.

Do you want to make a return or are you supporting the venture simply because you want to help?

Even if the company is offering rewards or a regular financial return, consider how you will feel if you don’t get the return you expect, or any return at all.

Know what you’re buying

There are several different types of crowdfunding, and within those groups there are varying structures. You want to be aware of

  • Equity crowdfunding: You give money in return for a stake in the company. Just like traditional shares there are lots of different types, some give you voting rights, some might change in value if the company issues more shares at a later date. Investigate what rights your shares give you.
  • Debt crowdfunding: This is commonly called peer-to-peer lending and usually involves you getting your money back plus interest. They look like a regular loan but you need to bear in mind that these loans don’t guarantee that you will get the money back plus interest.
  • Donation crowdfunding: Donors have a social or personal motivation for putting their money in and expect nothing back. Make sure you support projects you really believe in and that are aligned with your values.

Talk to people

Crowdfunding is all about people and sharing knowledge – talk to people about the projects you plan to support. It is easy to buy into a five minute video with emotive music, but a chat with a friend or family member will help you see the project more objectively. They may ask questions you hadn’t thought about.

Read more: http://www.thisismoney.co.uk/money/diyinvesting/article-3043804/Stand-crowd-assess-crowdfunding-peer-peer-investments.html#ixzz3XttXAhFA

 

Crowdfunding-CSR-DIY

Corporate social responsibility is a new bottom line.

Especially for younger consumers, supporting businesses that do good in the world is a priority.

When BidOkee is completed, it will integrate CSR opportunities and charitable giving seamlessly into the design of our platform. Campaigns can offer backers the opportunity to allocate a percentage of their pledges to charities – BidOkee’s structure allows a single featured charity, a choice among several causes, or even a contest in which backers can vote for the charities they want the community to support. This can be a winner-take-all vote or the funds can be distributed based on proportion of votes received.

The benefits are numerous.

The CSR component helps great causes, obviously.

It also makes a proud statement by the campaign about what issues and causes are important to them.

And it is especially effective as an engagement and virality tool, encouraging backers to spread the word through their networks to build support for their chosen charity.

This is just one of many amazing components BidOkee will make available to crowdfunding campaigns when we launch our unprecedented do-it-yourself crowdfunding platform.

We have a prototype. Check it out at www.BidOkee.com! Help make it happen – we need your support.

crowdfunding-for-big-brands

MarketingProfs | Richard Swart | Sep 19, 2014

When UC Berkeley decided to offer its executive education course on corporate crowdfunding, some faculty members wondered what relevance crowdfunding had to major brands. Especially because the original intent of crowdfunding was to help struggling small businesses—not billion-dollar brands.

However, many companies are starting to realize that crowdfunding represents a unique marketing opportunity for forwarding-thinking companies to dramatically strengthen consumer ties with their brand. Crowdfunding can also be used to drive innovation, and it is the newest (and probably most effective) form of crowdsourced product innovation.

Crowdfunding is the collection of finance from backers (the “crowd”) to fund an initiative, and it usually occurs on Internet platforms.

Since emerging in 2008, crowdfunding has become a multibillion-dollar global industry with thousands of platforms offering funding opportunities to entrepreneurs, community organizations, and lately major corporations, such as Dodge, Honda, Coca-Cola, American Express, and DC Comics.

Corporations with access to debt and securities markets don’t need to use crowdfunding to finance operations for growth capital. However, what smart CMOs and CEOs have realized is that crowdfunding does a remarkably effective job in helping to drive marketing initiatives to existing customers and acquiring new customers. 

Forget the hypothetical value of a social media mention, such as a Facebook like.

When you can get a customer or social follower to contribute cash to a corporate-sponsored campaign, you have the deepest form of social media engagement possible.

What Strategic Corporate Crowdfunding Looks Like

The first model of strategic corporate crowdfunding is not to create an opportunity for customers to finance the purchase of your product for themselves but usually for a social cause or community organization.

Dodge did a fantastic job with its DodgeDartRegisty.com campaign. (check out Video)

The registry allowed customers to have backers fund parts of the car. For example, a customer’s aunt could buy the steering wheel.

The magic of this model was revealed when community organizations started trying to fund the purchase of Dodge Darts to deliver food to the homeless and to provide access to transportation in women’s shelters. The campaign then went viral with more than 1,000,000 social media impressions.

Though fewer than 40 cars were purchased directly, the company engaged and mined data from tens of thousands of potential new customers and saw sales more than double the following quarter.

Video:  NCFA interview with Richard Swart, UC Berkeley Directory Crowdfunding Research, on Global Crowdfunding

Dell used a similar logic by having customers fund the purchase of a laptop for first-generation, low-income college students.

The second model of strategic corporate crowdfunding is to use crowdfunding campaigns for community projects for entrepreneurs whose missions align with the company.

Honda used a campaign on Indiegogo.com to raise funds to save the American drive-in theater. This marketing strategy is about social engagement and brand positioning.

Kimberly-Clark uses a hybrid model with its Huggies MomInspired campaign. The company provided grants to moms to develop innovative products for children. What Kimberly-Clark created is an external R&D laboratory, which led to significant opportunities for revenue increase.

Huggies now learns from its customers—without focus groups or formal market research. Its cost per social impression is 40% lower than other forms of marketing, and the company has not had a single negative social comment.

Continue to the full article –> here

 

Crowdfunding-ReapRewards-DIY

Successful small businesses on sites like Kickstarter, Indiegogo tend to raise more money on subsequent projects

Here’s a secret for budding entrepreneurs using crowdfunding platforms to finance their projects: It pays to go back for seconds.

Consider the success rates on Kickstarter, the New York-based online platform where users make contributions on projects in exchange for rewards, like an early version of the product.

On average, people raising money on the site for projects are successful in meeting their goals 38% of the time, according to Kickstarter. But new data show that those with one successful project under their belts have nearly double the chances of success—73%—of reaching their next funding goal. And those with five projects have a 91% likelihood, according to the six-year-old site.

A similar trend is under way at Indiegogo, a San Francisco-based crowdfunding site created in 2008, said Chief Executive Slava Rubin.

Read the rest of the article here.

Crowdfunding-Empowering-Startups-DIY

BidOkee is establishing a cooperative model through which networks, resources, connections and best practices are shared between campaigns to realize crowdfunding’s original potential.

BidOkee’s CEO, Eyal Lichtmann, contends a major problem with crowdfunding is that small campaigns are being pushed aside as big corporations look to dominate the industry.

Approximately one million crowdfunding campaigns are launched annually. Over $20 billion in crowdfunding transactions will occur this year – a 100% increase over last year – according to EquitynetA World Bank report estimates that, by 2025, this number will spike to $300 billion annually, while others estimate as high as $500 billion, with up to $3.2 trillion in economic activity.

Entrpreneur.com reports how difficult it is for start-ups to get funding despite the proliferation of crowdfunding worldwide. Currently 90% of the world’s online population has access to crowdfunding and $1,400 is raised in donations every minute. Still, only 3% of all start-up funding comes from crowdfunding.

And E-commerce Times reports that Fortune 500 firms are actively experimenting with crowdfunding as a product launch and testing platform, potentially pushing out the small players. UC Berkeley is actually looking into providing courses for corporate executives wanting to launch crowdfunding campaigns. In addition, many charities, NGOs and scientific and health research projects are also looking to crowdfund their projects.

“As a result, traditional crowdfunding platforms, and the industry as a whole, are becoming very crowded,” Lichtmann says. “With more and more competition, including consultants and corporate campaigns, the bar is getting higher for small businesses. The cost and effort to successfully execute large campaigns is becoming prohibitive for many small firms and entrepreneurs. As crowdfunding platforms get bigger, start-ups are getting pushed out.

BidOkee-3Industries-Slide“Breaking through the barriers is an uphill battle,” Lichtmann continues, “especially now, as small start-ups are being eclipsed by hundreds or thousands of campaigns launched by deep-pocketed Fortune 500 companies and established organizations. The biggest advertising and marketing firms, scientists and crowdfunding consultants are taking over. The bigger the crowdfunding site, the less a small start-up can compete.”

Dr. Richard Swart, the director of research on crowdfinance at UC Berkeley, indicated there are Fortune 100 companies that are thinking about launching a crowdfunding campaign.

Corporations have enormous resources to launch and build support for their crowdfunding campaigns and that is driving the cost of crowdfunding services higher for the little guy. Companies such as Coca-Cola, Microsoft, Dodge and DC Comics are using crowdfunding for marketing purposes, with the deleterious effect of marginalizing smaller players seeking to raise funds on the same platforms while at the same time driving up marketing, PR, consultancy and production costs within the industry.

“Crowdfunding was intended to enhance the start-up experience and bypass the onerous process of finding traditional investors to launch an idea or product,” says Lichtmann. “It was not intended as a marketing platform for established or already successful companies.”

An example, he says, is the Pebble watch, which already had sufficient cash on hand for their project but wanted the additional exposure Kickstarter offered.

“And now the biggest consumer companies in the world are moving into crowdfunding as a platform to market test and pay for their product launches,” says Lichtmann. “This is counter to the whole notion of crowdfunding, which was supposed to assist start-ups penetrating the vast expanse of the marketplace.”

Some activist-commentators are calling out the commandeering of crowdfunding by multinational behemoths, though not everyone agrees, and a healthy debate is beginning.

“The survival of crowdfunding requires a true cooperative model that has the best interest of the small player in mind,” he says.

Lichtmann’s company, BidOkee, has launched a beta version of what will be a do-it-yourself crowdfunding platform based on a cooperative model.

“The DIY model we are building allows people the freedom to share, cooperate, assist, collaborate and utilize more human resources through cross-pollination of projects and ideas to yield infinitely more unique possibilities,” he says.

Scott Steinberg, author of The Crowdfunding Bible, featured BidOkee on NewsWatch TV. He declared: “This could change crowdfunding as we know it.”

Combining DIY with a cooperative model may sound contradictory, Lichtmann acknowledges.

“But a do-it-yourself model is about being wholly independent,” he says. “And the cooperative model is about relying on the goodwill and assistance of others. And that is the exact formula BidOkee is looking to propagate.”

BidOkee is establishing a cooperative model through which networks, resources, wisdom, advice, connections and best practices are shared between campaigns.

“If we reach our goals, we hope to share over $100 million annually back with campaigns,” he says. “But that number can grow higher. In addition, we are looking at cross-pollination opportunities that allow one successful start-up crowdfunding campaign to assist another start-up campaign with backers, users and other resources.

Also, with the integration of loyalty rewards through a gamified system, campaigns can have access to tens of thousands of additional leads for their campaigns. We want to change 60% failure rates to 80% success rates. That is what we are striving for.”

As Darryl Burma, CEO of Crowdmapped.com says, “BidOkee will definitely disrupt the industry. It is doing something we have not seen before and is a game-changer.”

BidOkee is currently developing the beta platform into a software-as-a-service (SaaS) model, which will give anyone the opportunity to launch their own independent, self-directed crowdfunding campaign with tools and features no other platform offers.

“We are now crowdfunding for crowdfunding and hope people will support our campaign to get this model to market” says Lichtmann. “We think this is the future – a future that realizes crowdfunding’s original potential.”