Crowdfunding Platforms 2016 update

Here is the update on crowdfunding for which you have been patiently waiting.

      In 2015, Crowdfunding raised over $34 billion through over 1200 (!) crowdfunding platforms around the world.  I haven't been able to track down all of these platforms, but crowdsourcing.org has a pretty good list.  I have integrated information from several sources to update the crowdfunding list (see tab above) on this blog.  I focused on the USA this time, although there are a few international platforms in there as well.  The updated list here includes over 375 crowdfunding related sites.

For background: In October of 2015, the SEC passed Title III of the JOBS Act. (It only took 4 years, but at least it is something.)  It is not clear what the ramifications of this will be, but here are a few recent developments to note:

• As of Jan 29th, crowdfunding sites are supposed to register with the SEC and be a member of FINRA.  
• As of May 16th, 2016, companies can solicit equity crowd investment from non-accredited investors.   
• The amount an unaccredited investor can invest is NOT unlimited.  Here is the table of investment limitations provided by the SEC: 

• Firms must disclose certain financial information depending on the amount raised.  Here is the SEC summary (see sec.gov for full details):

Tiered financial disclosure.  The minimum level of financial disclosure required by the company             depends on the amount of money being raised or raised by the company in the prior 12 months:

• $100,000 or less – financial statements and specific line items from income tax returns, both of which are certified by the principal executive officer of the company.
• $100,000.01 to $500,000 – financial statements reviewedby an independent public accountant and the accountant’s review report.
• $500,000.01 to $1 million – if first time crowdfunding,then financial statements reviewed by an independent public accountant and the accountant’s review report, otherwisefinancial statements audited by an independent public accountant and the accountant’s audit report.

A recent Forbes article argued that crowdfunding could top VC in the next couple of years.  Just as a comparison - crowdfunding hit $9 billion in the USA while VC funding topped over $47 billion last year (pwcmoneytree). We aren't there yet, but clearly crowdfunding is a force to be reckoned with.  

FoodCrunch 2015: Innovation You Can Taste

Sorry for the hiatus.  I am back with more start-up news.

The Food & Agribusiness Institute at Santa Clara University and Beta Gamma Sigma, international business honor society, hosted FoodCrunch: Innovation You Can Taste on April 30^th.  The event brought together two of the most important elements of Silicon Valley—technology and food.  Over the course of the evening, participants heard from four top executives in the industry and enjoyed a sampling fair with local vendors of innovative sustainable food products.  

Roger Royse of AgTech Incubator moderated the panel that included:

Dan Zigmond, VP of Hampton Creek

Kate Danaher, Lending Manager at RSF Finance

Harvindar Singh, local forager at Whole Foods Market

Eric Quick, CEO of Froovie

The panel was incredibly informative with great advice for any entrepreneur.  Here are some of the highlights:

Starting up

• EQ: Bootstrap as long as you can.  You will learn about your own resiliency.
• DZ: “The cost of failure has never been lower.”
• EQ: Don’t start a company just to sell it.

Knowledge

• KD: Investors and lenders want to know if you understand your clients, know your numbers, understand what your goals are, and how you are going to get there. 
• HS: Know your industry and do your homework.
• EQ: Free samples are free feedback.  Use it.

People matter:

• EQ: You want to listen to the people who will tell you that the product isn’t right yet.
• EQ: “Surround yourself with great advisors who will bring you forward.”
• HS: When he initially meets an entrepreneur, he doesn’t look at the product primarily, but observes the people first.  He wants to build a relationship.
• KD: Relationships are huge.
• KD: Stakeholders matter.
• DZ: In food you must win over customers one at a time. 

The product

• HS: Local markets are saturated so you need to be different, unique, not available on the market.   To do so, you need to be innovative and takes risks, stand out, and don’t be a me too product. 
• HS: To stand out, pay attention to your packaging.

Lessons from Crowdfunding

Kevin McMahon gave a talk at Santa Clara University last month (Sept 29^th) about starting his non-profit firm Art Heroes (art-heroes.org).  The timing was amazing because just 2 hours earlier, Kevin had successfully finished a crowdfunding campaign.  Art Heroes raised $23,000 on RocketHub and the lessons from his experience were fresh in his mind.  He made some terrific points that I wanted to share here.

Successful crowdfunding depends on the following:

1.       Know your story, tell your story – Run your story by your intended audience before launching your campaign.  It is easy to forget that each industry uses lingo that not everyone knows.  Make sure that your campaign is accessible to everyone. 

2.       Big donors up front – Get commitment from people who believe in you before you launch your campaign.  No one likes to be the first person on the dance floor and this goes for the crowdfunding campaign as well.  Network before you launch.

3.       All hands on deck – Just like starting a company, running a crowdfunding campaign alone is not easy.  Thus, if you can get others to co-sponsor it, you share the responsibility. 

4.       Thoughtful incentives – How many t-shirts can one person use?  Ask your audience about what they would like for rewards in return for their support.  And, no, 100 t-shirts is not a good way to start. 

5.       Social media madness – Use everything, all the time.  Before you launch, learn the basics of every social media platform.  Get on twitter, snapchat, Instagram… be everywhere. 

6.       Sharing is free – Even if your friends can’t support you monetarily, they can sharing your campaign for free.  Your network sharing your campaign with their network grows your audience exponentially. 

http://www.rockethub.com/projects/47080-art-heroes-connecting-creatives-with-causes

Crowdfunding platform list as of Sept 3 2014

Hello readers,

There is a new page on this blogging website that contains a summary of popular crowdfunding platforms.
It is a work in progress and is definitely not perfect, but it does have a lot of data in one spot.
Let me know if you have any information to update the list.

Entrepreneurship at Santa Clara University - really

Yes, you can be entrepreneurial in a large (old) organization.  Santa Clara University (SCU) has developed a Master’s of Science in Entrepreneurship with an emphasis in Global Innovation (MSE-GI).  This isn’t the first time that SCU’s Leavey School of Business has been entrepreneurial.  In 2010, the school launched CAPE, an entrepreneurship education program for non-matriculating students.  The fifth cohort started this summer with 50 participants.  In 2013, the Master’s of Science in Finance and Master’s of Science in Entrepreneurship started.  The MSE-GI is an overhaul of last year’s MSE; however, this time the program is focused in both scope and market.

The MSE-GI program is a 12-month, full-time post baccalaureate degree program for international students in Silicon Valley. The program integrates course work and internships to equip students with business skills and practical experiences necessary for successful careers in a range of organizations from start-ups to established market leaders. International students will be immersed in the business landscape, culture, and network of Silicon Valley and study under prominent Silicon Valley scholars, gain experience with local firms and network with business leaders. Additionally, students will gain the skills and contacts to enable them to lead entrepreneurial projects and intrapreneurial opportunities.

SCU was founded in 1851 in the heart of Silicon Valley. The university now has over 8000 students across undergraduate and graduate degree programs. 

The first cohort will begin in June of 2015. 

You read it here first.

The website will be up in a couple of weeks.     

http://www.scu.edu/business/