Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street
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Rescooped by Richard Platt from Angel Investors Funding
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New Rules Allow Early Adopters to Become Early Investors

New Rules Allow Early Adopters to Become Early Investors | Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street | Scoop.it
Were you one of the first to identify Uber as a game changer?  What about being one of the first to use Amazon or Google in the early days? If you had..

Were you one of the first to identify Uber as a game changer?  What about being one of the first to use Amazon or Google in the early days?

If you had invested in Uber (now valued at $40B) in 2011, you would currently be sitting on a 600x return. Unfortunately, unless you were already very wealthy, securities laws would have prevented you from being able to invest in the these companies.

Early adopters have historically been prevented from crossing the threshold from customer to investor. However, a fundamental shift in the relationship between consumers and companies has been set in motion by new SEC regulations set to go into effect on June 19th.

Most early adopters interested in supporting private companies have been limited to rewards-based crowdfunding. This type of crowdfunding has proven to be a poor substitute for true early stage investing. Rewards-based crowdfunding websites such as Kickstarter allow individuals to pre-order products or donate towards something that they want to exist in the world. These “backers” do not get shares or equity in the company. Although these backers take on significant risk, they do not get any significant upside.

The story of Oculus VR is apt. Nearly two years after its celebrated rewards-based crowdfunding raise, Oculus was acquired by Facebook for $2B. Oculus’ early Kickstarter backers felt angered and betrayed. Though they had a sense of ownership in the company, they reaped no benefits from the transaction. Meanwhile, the institutional and accredited investors who invested in Oculus after the Kickstarter campaign (and in large part because of the Kickstarter campaign) made a large amount of money in a short period of time. $300 in equity in Oculus at the time of the Kickstarter campaign would have been worth approximately $45,000, a 145x return.

Successful technology startups owe it to their early adopters to let them participate in the company’s financial success.  These are the people who realized the company’s potential before the public and provided the momentum to turn that potential into a reality. Read more: click on image or title.


Via Marc Kneepkens
Richard Platt's insight:

Here are some of the key takeaways:

  • EMV cards are being rolled out with an embedded microchip for added security. The microchip carries out real-time risk assessments on a person’s card purchase activity based on the card user’s profile. The chip also generates dynamic cryptograms when the card is inserted into a payment terminal. Because these cryptograms change with every purchase, it makes it difficult for fraudsters to make counterfeit cards that can be used for in-store transactions.
  • To bolster security throughout the payments chain encryption of payments data is being widely implemented. Encryption degrades valuable data by using an algorithm to translate card numbers into new values. This makes it difficult for fraudsters to harvest the payments data for use in future transactions.
  • Point-to-point encryption is the most tightly defined form of payments encryption. In this scheme, sensitive payment data is encrypted from the point of capture at the payments terminal all the way through to the gateway or acquirer. This makes it much more difficult for fraudsters to harvest usable data from transactions in stores and online. 
  • Tokenization increases the security of transactions made online and in stores. Tokenization schemes assign a random value to payment data, making it effectively impossible for hackers to access the sensitive data from the token itself. Tokens are often “multiuse,” meaning merchants don’t have to force consumers to re-enter their payment details. Apple Pay uses an emerging form of tokenization. 
  • 3D Secure is an imperfect answer to user authentication online. One difficulty in fighting online fraud is that it is hard to tell whether the person using card data is actually the cardholder. 3D Secure adds a level of user authentication by requiring the customer to enter a passcode or biometric data in addition to payment data to complete a transaction online. Merchants who implement 3D Secure risk higher shopping-cart abandonment.
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Marc Kneepkens's curator insight, June 21, 2015 11:24 AM

Early adopters are part of the success of a startup and should be rewarded for their input and commitment. This article digests the new opportunities.

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230 European Crowdfunding Platforms

230  European Crowdfunding Platforms | Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street | Scoop.it

Le Start-up Europe crowdfunding network, programme de la commission européenne, a publié son rapport sur la santé du secteur dans le vieux continent. Il a recensé pas moins de 230 plate-formes de financement participatif en Europe, la France, l'Italie et l'Allemagne étant les pays les plus actifs dans ce domaine. Mais c'est l'Allemagne qui compte le plus de campagnes bouclées, avec un taux de réussite de 27%, contre 17% pour l'Espagne et 16% pour la France.



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Via Nelly Renard, Edouard Estour, Marc Kneepkens
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Marc Kneepkens's curator insight, May 30, 2014 7:49 AM

Interesting numbers from Europe.

Philippe GABORIEAU's curator insight, May 30, 2014 1:05 PM

Le financement des entreprises en crowdfunding se développe dans toute l'Europe

Michel CEZON's curator insight, June 3, 2014 3:30 AM

Le rapport complet à lire sur http://www.crowdfundingnetwork.eu/

La section Crowdfunding 101 du site est très bien faite : à lire !!!

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This Site Lets You Get Backers for Your Crowdfunding Project Before It Launches

This Site Lets You Get Backers for Your Crowdfunding Project Before It Launches | Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street | Scoop.it

Kickstarter says only 44 percent of its crowdfunding campaigns are successful. Provo, Utah-based startup Prefundia claims it can boost that success rate to 71 percent for anyone who uses its web platform to test out their idea for several weeks before formally committing to a Kickstarter posting. How? By drumming up buzz.

"It's specifically designed to help Kickstarter projects acquire a mass following," says Prefundia co-founder Jeff Schwarting, "so when they do launch there, they can come in with momentum and rake it in on the first day."





Via Marc Kneepkens
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Marc Kneepkens's curator insight, April 10, 2014 6:56 PM

One important detail I noticed on the site: All Prefundia services are free.

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How to Attract Investors via Equity Crowdfunding

How to Attract Investors via Equity Crowdfunding | Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street | Scoop.it

Equity crowdfunding investors are not like other crowdfunding contributors. They are not looking to support a particular item or to get a physical trinket for their support. Investors who you want to attract via equity crowdfunding are interested in long-term rewards, innovation, and growth. Attracting these investors should not mirror the other types of crowdfunding available. The goal is to attract serious investors in a non-traditional, high risk form of investment, also known as your start-up. Of course, the greater the risk, the greater the reward. In order to attract these investors, the issuer must let potential investors see the clarity and strength of the investment and future enterprise.



Via Marc Kneepkens
Richard Platt's insight:

Good clean report,  practical and to the point. It teaches a few basic skills when crowdfunding equity for your startup.

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Marc Kneepkens's curator insight, February 28, 2014 3:33 PM

Clear, concise, direct.

Great article, very practical and to the point. It teaches a few basic skills when crowdfunding equity for your startup.

Not the same as 'rewards' crowdfunding.

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Crowdfunding Phenom: Kickstarter CEO Yancey Strickler on Success, Copycats, and 'Broken Promises'

Crowdfunding Phenom:  Kickstarter CEO Yancey Strickler on Success, Copycats, and 'Broken Promises' | Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street | Scoop.it

The crowdfunding model is now a mini-cottage industry, thanks to Kickstarter, and yes, he's been spoofed by 'South Park.'

Excerpts:

...When did the concept of crowdfunding first click for you?

In 2005. I had these artist and musician friends with day jobs that they hated, but they couldn’t afford to just do art or music. There’s a widespread assumption that creative things just magically happen, and they don’t. Creation requires funding.

    

....(order changed)  Today, millions of people use the site each day, adding up to a daily average of $1 million in pledges (some 70,000 campaigns have launched on the site). 

      

...Are there plans to grow the staff?

Actually, no. I think we’ll get to 100 people, but not much beyond that in the near future. Being a small company [means we are] light on costs, and I like the scrappiness of trying to accomplish a lot with a little. There’s far more shared ownership with a small team.
     
...Are you threatened by ...copycat competitors?

I’ve always known others would copy our idea, but to be honest, we’ve always been the strongest product. ....and for most of our measurements -- dollars pledged, site visitors, project supporters -- there’s a huge gulf between us and the rest of the field.

 


Via Deb Nystrom, REVELN
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Deb Nystrom, REVELN's curator insight, October 16, 2014 1:55 PM

FOR THE WIN:  Spot on great ideas, carried to full implementation and sustained in good faith, with some bumps in the road. Overall good ideas, good will and smart business practices will win the day, says I.   As an consultant, there's a lot to like about Kickstarter, including my favorite value in the work world, "choice."  We have a lot that is industrial age about our still new, burgeoning information age.  Fortunately, Kickstarter the concept, and the reality, is not one of them.

I've also included crowdfunding and crowdsourcing as a community building, ownership trend that field of Organization Development (OD), among others, is ignoring in a digital chapter on its way to publication for Wiley for Practicing OD, 2015 edition.

 

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The rise of crowdfunding: 10 things to know

The rise of crowdfunding: 10 things to know | Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street | Scoop.it
Crowdfunding platforms are changing the way we finance projects and services, but the laws surrounding them are still ambiguous. Here are 10 facts to get you up to speed.

Crowdfunding is a tool that allows anyone -- be it startup founders, musicians, artists, students, children, or even someone in a developing country who lacks basic electricity -- to attract a pool of people via the internet to invest in their business idea. A funding target is established, and rewards to backers are offered.This new type of startup business model has the opportunity to disrupt industries and change the way we determine success and let the best ideas flourish, rather than the best access to capital. It's exciting, because the venture capital model that powers Silicon Valley and the global startup scene is inherently biased based on geography and connections. According to the Small Business Administration, about 600,000 new businesses are started in the US every year. The number of startups funded by VCs? 300. That means 99.95% of entrepreneurs won't get funded.To affect real change, we have to understand the basics: what defines crowdfunding, how it works best, and how the current laws shape what's possible. We also need to look at the ways the law is changing and what it means for the future of crowdfunding.Here is a list of the 10 most important things to know about this important new buzzword.

To read the full article, click on the title or image.



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Via Marc Kneepkens
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Marc Kneepkens's curator insight, April 30, 2014 8:44 AM

Startup or small business looking for funding? Here is a great introduction to crowdfunding, with links to funding platforms and a good overview of how crowdfunding works.

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The Crowdfunding Backlash: What Do You Owe Your Backers?

The Crowdfunding Backlash: What Do You Owe Your Backers? | Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street | Scoop.it
Backers who supported Oculus Rift on Kickstarter are now angered that the company has sold to Facebook. What do crowdfunding projects owe their backers?

Oculus VR chief Palmer Luckey turned to Kickstarter to raise $2.4 million to create prototypes for the Oculus Rift headset. Billed as "the first truly immersive virtual reality headset for video games," the crowdfunding campaign attracted more than 9,500 backers. But now that the company has been sold to Facebook for more than $2 billion, some of the backers feel duped.

Countless backers of Oculus Rift vented their frustrations on the Oculus Rift Kickstarter. 

"I am saddened that the independent dream that was Oculus is now selling out to Facebook," wrote one of the project's backers. "Honestly, I feel that every single donor should get a "kickback/refund" from that $2 Billion (they'd still have plenty left over!) to put towards a Kickstarter project that isn't a masquerading golddigger. The whole idea of Kickstarter is to support people in making the world a better place through original ideas and technology, not selling out to corporate America. We already have enough politicians that do that - and you see how good that's worked out for the country. A shame and disappointment to everyone who backed Oculus; it's a damn shame."

It's reminiscent of what happened when Zach Braff's Kickstarter-funded "Wish I Was Here" sold big at Sundance and some of the film's backers complained that he had forgotten the little folks who helped the film get made.



Via Marc Kneepkens
Richard Platt's insight:

You don't own anything if you pledge $$,  so there does need to be some up front regulations for Crowdfunding before you actually invest

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Marc Kneepkens's curator insight, March 29, 2014 7:39 PM

It's nice to be part of a community, something big, something that makes a difference. You don't own it though by pledging a small amount of money.

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Digital Hollywood 2012: Crowd Funding – The New World Financial Source “the story” is king

Digital Hollywood 2012: Crowd Funding – The New World Financial Source “the story” is king | Crowd Funding, Micro-funding, New Approach for Investors - Alternatives to Wall Street | Scoop.it

Geoffrey Maingart: "One of the most important subjects of the conference was “crowdfunding,” the great alternative way to fund a venture, and it can be done without giving up equity or accumulating debt" ...


Via The Digital Rocking Chair
Richard Platt's insight:

New Venture funding that even celebrities are involving themselves in

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