What is Crowdfunding?

22 Aug cropped-authr-crowd-funding.jpg

What is Crowdfunding?

Crowdfunding (alternately crowd financing, equity crowdfunding, crowd-sourced fundraising) is the collective effort of individuals who network and pool their money, usually via the Internet, to support efforts initiated by other people or organizations. Crowdfunding is used in support of a wide variety of activities, including disaster relief, citizen journalism, support of artists by fans, political campaigns, startup company funding, motion picture promotion, free software development, inventions development, scientific research, and civic projects.

Crowdfunding can also refer to the funding of a company by selling small amounts of equity to many investors. This form of crowdfunding has recently received attention from policymakers in the United States with direct mention in the JOBS Act; legislation that allows for a wider pool of small investors with fewer restrictions. While the JOBS Act awaits implementation, hybrid models, such as Mosaic Inc., are using existing securities laws to enable the public in approved states to invest directly in clean energy projects as part of a crowd.

Crowdfunding has its origins in the concept of crowdsourcing, which is the broader concept of an individual reaching a goal by receiving and leveraging small contributions from many parties. Crowdfunding is the application of this concept to the collection of funds through small contributions from many parties in order to finance a particular project or venture.

Crowdfunding models involve a variety of participants. They include the people or organizations that propose the ideas and/or projects to be funded, and the crowd of people who support the proposals. Crowdfunding is then supported by an organization (the “platform”) which brings together the project initiator and the crowd.

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Funding your business online using crowdfunding

22 Aug crowdfunder

Funding your business online using crowdfunding:

In 1932, the government tried to protect investors from fraudulent investments by creating the SEC (Securities and Exchange Commission). This legislation and corresponding state laws prohibited businesses from advertising to sell shares of their business unless they filed paperwork with the SEC and reported their income quarterly to the SEC. There were exemptions – basically if you had just a few investors (varies by state – but usually 10 or 20), only sold stock once a year, only sold to people you knew, and didn’t advertise. The laws were strictly enforced. People who didn’t follow the rules were jailed. With the Internet, businesses began BORROWING money from ordinary people online. This was the beginning of crowdfunding. It was illegal to offer ownership shares, but it was perfectly fine to loan and borrow money over the Internet. In 2012, the INVESTOR rules changed. The 2012 JOBS Act opened up investment to allow crowdfunding for equity shares in businesses over the Internet. The JOBS ACT doesn’t take effect until the rules are developed by the SEC – which has been delayed to 2013/2014. The SEC is trying to balance the need to protect investors with too many onerous requirements on small business. However, there are a few things we know now:

  • If you want to RECEIVE crowdfunding EQUITY money, you will have to go through specific websites, where you will have to disclose a lot of personal and business financial information.
  • You CAN get crowdfunding equity money today from accredited investors. These are people who have $1 million or more and are experienced investors. You will be able to do general solicitation beginning mid-September 2013. This means that you cannot advertise your opportunity to the general public until mid-September 2013. Today, you CANNOT legally get crowdfunding EQUITY money from non-accredited investors.
  • There may be a requirement to have audited books and records.
  • You will have to completely separate your personal and business finances. Legally, this means you must be a corporation or LLC.
  • You will have to continually provide information to your investors.
  • State laws will have to catch up with federal laws – so it is important to work with an attorney.
  • Equity means you are sharing a percentage of your business forever. It means risk on the investor’s part – that they will never get a dime back. It means business owners have given up partial ownership and hopefully, for you and your investors, you will return significantly MORE money to your investors than you ever received from them. If you don’t want this, then you don’t want EQUITY funding – you want DEBT – where you only pay back the loan plus interest.

Here is information on crowdfunding from the California Small Business Development Centers:

10 Tips for Crowdfunding your Business

Brazzle Berry Celebrates 2 Year anniversary by launching crowdfunding.

17 Aug Crowdfund Brazzle Berry

Brazzle Berry celebrates 2 year anniversary by launching CrowdFunding campaign on Saturday August 17th 2013.

Half Moon Bay, Ca:  Approaching 2 years as a retail creative concept of the local Seaton Brothers, Brazzle Berry is now preparing to source working capital financing needs by crowdfunding 99 diverse rewards ranging $9-$9,999:
·  “Big Crowds Funding Small Businesses” Lessons learned on Crowdfunding E-Book.
·  Healthy Happens Brazzle Berry Cookbook
·  ($99 -/+) Giants, Sharks, Warriors, 49er, Raiders, S.F Opera, Coastal Rep tickets.
·  Mavericks T-Shirt and Paddle Board Lesson, HMB Taffy, Oceano Hotel Package.
·  Brazillian Blowout Hair Treatment by Aqua Beauty Lounge (AQB).
·  $99- “Big Crowds Funding Small Businesses” incubator conference 21st-23rd of February 2014.
·  Baseball/Sports/Autograph/Beanie Baby collection.

·  Traditionally only non-profits have thrived on sites like Kickstarter.com, IndieGogo.com and Rocket Hub.com, however the extended credit crises impact in dissolving small business loan markets is now converging with social networking to make crowdfunding a lucrative alternative for unconventional start-ups, like Brazzle Berry, requiring early capital injections to grow responsibly.

Seeking $99,000 in total, 99 rewards will be crowdfunded at RocketHub.Com before Brazzle Berry’s campaign ends November 17th 2013. If successful, funds will then be transferred for the specific goods/services delivered according to their predetermined schedules. Any excess funds received will ultimately allow Brazzle Berry to thrive by paying down high interest credit card debt and survive a looming slowdown in sales soon expected to take their seasonal dive.
Brazzle Berry’s destiny could forever fail to fruition without local support of our berry rewarding crowdfunding campaign going live on Saturday August 17th at 7:00 P.M. Free food samples, prizes, karaoke, on

Saturday August 17th from 7:00-9:00 + 50% off all yogurt 7 PM – MIDNIGHT.  Find out more information by visiting CrowdFundBerry.Com.

A Crowdfunding Community built on Education, Participation and Trust!

15 Aug sf-crowdfunding

The wave of CrowdFunding is in site and, as entrepreneurs and investors, we know how to handle a the next big idea.

The Crowdfund Roundup is transparent co-operative of CrowdCos, CrowdVestors, Investors, Affiliates and Sponsors working together to understand crowdfunding investment and companies learning how to turn new ideas into products.We intend to gather the right resources and to form the right partnerships that will make SF Bay CR the place to come for your CrowdCreative endeavors!

Join us, sit a spell and lend a hand. This IS the next best thing!

Sonoma, CA: Sonoma Caterers Aim to Crowdfund Food Truck Biz

28 Jul Sonoma Caterers Aim to Crowdfund Food Truck Biz

Sonoma, CA: Sonoma Caterers Aim to Crowdfund Food Truck Biz


The owners of a Sonoma-based catering company serving up old-fashioned recipes of the South have turned to 21st Century Silicon Valley technology  that they’re hoping will help them share their passion for gourmet comfort foods while boosting their bottom line.

Arthur Chang and Rachel Hundley, who left high-stress careers in law and finance in New York City to start “Drums & Crumbs” in Wine County earlier this year, are seeking funding for a food truck that they say is integral to their business’ expansion.

They’ve launched a campaign that they hope will help them achieve their goal through Kickstarter, a “crowdfunding” website that’s been used for a wide range of ventures – Spike Lee aims to raise $1.25 million for his next film through crowdfunding to site.

Crowdfunding is no traditional investment. Drums & Crumbs funders will get free eats along with the satisfaction of knowing they’ve helped entrepreneurs pursue their passion – not dividends.

Chang and Hundley are offering a free lunch box to donors who give $10 or more along with other rewards ranging from picnics for four and cooking lessons to a catered wedding for 75.

Credit: Drums & Crumbs

Credit: Drums & Crumbs

They’re hoping a video in support of the campaign will help them meet an Aug. 21 crowdfunding deadline.

To join their crowdfunding effort visit their Kickstarter page. For Drums & Crumbs catering inquiries call 707-999-8394 or emailcatering@drumsandcrumbs.com.

Tamale Lady Needs Crowdsourcing for Restaurant

28 Jun Tamale Lady Seeks Crowdfunding for Restaurant

Tamale Lady Needs Crowdsourcing for Restaurant

The Tamale Lady is fundraising to get her very own restaurant open.

The Tamale Lady isn’t a bar hopper anymore.

Instead, she’s looking for the public to help her turn her business into a brick-and-mortar operation.

Virginia Ramos was the Mission District tamale-seller extraordinaire whose late-night visits to watering holes, pubs and bars bearing the cornhusks filled with food were a San Francisco staple — right up until she was forced to stop selling her tamales from an insulated cooler due to health regulations.

That ended a 20-year run for Ramos, 60, who started selling tamales in an effort to make extra money for her seven children, SF Weekly reported.

Ramos needed a commercial kitchen to continue her tamale trade, the Department of Public Health ruled, which means an honest-to-goodness restaurant location.

Now she needs $155,000 — and your help. She’s launched an Indiegogo.com account and is taking donations.

No tamales included — for now.

Tamale Lady Seeks Crowdfunding for Restaurant

Crowdfunding Raises $1 Million for Asteroid Miners’ Public Space Telescope

21 Jun Crowdfunding Raises $1 Million for Asteroid Miners' Public Space Telescope

Crowdfunding Raises $1 Million for Asteroid Miners’ Public Space Telescope

More than 11,000 supporters donated to Planetary Resources’ asteroid-hunting, publicly accessible telescope program

The world’s first selfie-snapping, asteroid-hunting, public space telescope is $1 million closer to its launch into Earth orbit, having surpassed its initial crowdfunding goal.

Planetary Resources’ online fundraising campaign soared past the seven-figure mark Wednesday evening (June 19), green-lighting the asteroid-mining company’s plans to deploy a publicly accessible space telescope in 2015.

More than 11,000 people pledged at least $10 to the project, which promises to not only capture images of its supporters’ selected astronomical targets with the Arkyd space telescope, but also photograph their submitted self-portraits (“Space Selfies”) on a digital screen mounted on the outside of the small satellite.

“Thank you everyone who pushed it over the $1 million mark!” Peter Diamandis, Planetary Resources’ co-founder, wrote on Kickstarter, the website that is hosting the crowdfunding campaign.

It took 20 days to raise the $1 million. Pledges can still be made for another 10 days, until 10 p.m. EDT on June 30 (0200 GMT July 1).

Planetary Resources intends to mine near-Earth asteroids for resources such as water and precious metals, with the ultimate goal of helping expand humanity’s footprint out into the solar system. The company has designed its Arkyd-100 space telescope to search for potential target space rocks.

“Our primary goal has been to build technology enabling us to prospect and mine asteroids,” the company wrote on its website promoting the funding campaign. “We’ve spent the last year making great leaps in the development of these technologies. These advancements have presented us with the opportunity to engage in another passion of our team: to make space exploration accessible to everyone.”

Path to $1 million

Planetary Resources launched the crowdfunding drive on May 29 during an event held at The Museum in Flight in Seattle.

For just $25, the company offered to upload a photo of the backer’s choice to the Arkyd, display it on a small digital screen mounted on the exterior of the satellite and then capture it in a photo with the Earth’s horizon looming in the background. The “Space Selfie” promises to be the first orbital “photo booth,” delivering digital images (or prints at higher pledge levels) to the supporters.

For pledges beginning at $99, supporters’ funds contribute to students’ and scientists’ research using the Arkyd. For $200, backers can opt to point the telescope at an astronomical target of their choosing. A $5,000 pledge buys the chance to identify a school, university or museum to receive observation time.

At the top level of support, $10,000 or more, backers are offered tours of Planetary Resources’ facilities, invitations to the Arkyd launch, the opportunity to etch their name on the space telescope and the chance to name one of the asteroids that the Arkyd is expected to discover.

Planetary Resources also lists “add-ons” to the pledges, including T-shirts and greeting cards printed with supporters’ astronomical or “Space Selfie” images, an Arkyd embroidered mission patch and a half-scale model of the space telescope.

Bolstered by media reports, endorsements by “Star Trek” actors and by museum directors, as well as the support of about 70 social-media evangelists who the company calls “Vanguards,” Planetary Resources’ Kickstarter campaign raised more than $200,000 on its first day.

Crowdfunded babies, hashtags for blizzards, watching Game of Thrones on your iPhone

17 Jun crowdfunded babies, hashtags for blizzards, watching Game of Thrones on your iPhone

Crowdfunded babies, hashtags for blizzards, watching Game of Thrones on your iPhone

The Bloomberg Next Big Thing Summit, a two-day conference to showcase the latest and greatest in entrepreneurial ventures and technological innovation, kicked off Monday in Half Moon Bay. The conference, which goes through Tuesday, is one of those rare events that bring the big Silicon Valley players, including executives from Facebook and Twitter, together with political leaders such as Lt. Gov. Gavin Newsom, mathematicians and startup founders. They explore the big ideas and companies of the day that are reshaping retail, media, mobile, science and technology industries — and potentially our lives.

Here’s a rundown of a few of those next big things:

  • GitHub – the open-source software site and code-sharing service from San Francisco could be the opposite of Yahoo, in that its office of Fourth Street is often a lonely place. About 70 percent of GitHub employees don’t live in the Bay Area, and those who do live in the neighborhood aren’t required to come to the office, said GitHub Chief Information Officer Scott Chacon. Flexibility, he said, is part of being a great entrepreneur. (Yahoo, by comparison, recently banned working from home.)

GitHub landed a whopping $100 million investment last year from Silicon Valley venture capital firm Andreessen Horowitz . Already, GitHub has earned the reputation as the go-to resource for coding and one of the most powerful social networks for developers.

  • Crowdfunding – online and social fundraising has been used to fund the creative pursuits artists and musicians, provide the seed funding for a company and raise money for a noble cause. But did you know that crowdfunding helped make a baby? So said Slava Rubin, founder and CEO of Indiegogo, an international crowdfunding site with headquarters in San Francisco. Rubin told the audience that one enterprising couple raised thousands of dollars on the site to pay for fertility treatments. The procedure was successful, and they recently had the first crowdfunded baby.
  • HBO GO – Launched in 2011, HBO GO lets viewers watch the network’s shows on their laptops, tablets, smartphones and Xbox . The service, provided through an app, has a hefty monthly subscription fee (while Hulu and other internet TV providers offer free streaming) but media experts said on Monday that HBO’s move to the app store could help the company avoid the fate of obsolescence that awaits most other cable networks.
  • Aereo TV – The internet TV provider may face ongoing legal hurdles, but Aereo satisfies consumers’ growing need to watch whatever TV they want, whenever they want.  Cable companies, watch out.  Aereo is poised to upend the TV industry as we know it.
  • Mobile ticketing – StubHub, the online ticketing marketplace owned by eBay, is pushing for more venues to accept mobile ticketing. Most consumers want to keep their tickets on their smartphone, but because the technology at concert halls and sporting stadiums hasn’t caught up, many consumers have to make an extra trip to FedEx to print their tickets, said StubHub president Chris Tsakalakis.

Technology in stadiums across the globe is lacking – there are only about five stadiums in the world with decent wireless, said Oliver Slipper, CEO of Perform Group. But Silicon Valley is about to lead the pack. The new 49ers stadium in Santa Clara will have a terabyte of bandwidth, making it one of the most wired venues in the world.

  • Weather – real-time data from social networks about weather and road conditions could help prevent accidents and keep people safe during storms. Companies such as The Weather Company are figuring this out. CEO David Kenny said he was pushing for earlier naming of blizzards so that Twitter users could hashtag the name of the snowstorm in a tweet. The hashtags (#) could then be used to track the storm’s progress.
  • Cybersecurity – If you think your social security number and credit card information hasn’t already been compromised, you’re living a lie, said Mark McLaughlin, chairman CEO of Palo Alto Networks. Companies are trying to play defense from not only a troublemaking teenage hacker, but also potential threats from foreign governments and terrorist organizations. Basically, everyone is worried, no one has the answer.

“The anxiety is very high about the threats out there,” McLaughlin said.

Crowdfunder event – where is the love?

31 May crowd-funding2

The investment community has been reaping the benefits from the success of their portfolio companies. Are those days over for the Venture Capitalist, Angel Investor, Investment bankers or any other institutional investor? Can anyone become an investor if they join a crowdfunding platform. Is crowdfunding just a new buzzword or the wave of the future that can help the startup community find investments quicker and easier?

Speakers include

Tim Draper, Founder & Managing Director, DFJ
Chance Barnett, CEO, Crowdfunder
Bill Reichert, Managing Director, Garage Technology Venture
Steve Bennet, Lecturer College of Business, SJSU Angel Investor
Adam Draper, Founder & CEO, Boost VC
Tony Seba, Author/Lecturer/Investor, USAsia Venture Partners
Dino Vendetti, Managing Director, Formative Ventures
Andy Wong, Hoya Corporation Japan, Hoya Holding
Adam Levin, Associate, Crosslink Capital
Ajit Deshpande, Partner, Opus Capital Partner
Roger Royse, Attorney, Royse Law

Additional info: http://crowdfunder.io
Enter promo code vipcrowd for 25 discount

Crowd funding opens up doors for raising money

29 Nov crowd-funding2

Crowd funding opens up doors for raising money

SAN FRANCISCO (KGO) — Traditional fundraising usually involves something like a bake sale or auction. Now, social media has opened up a vast new arena where almost anybody can raise money for almost any goal. It’s called crowd funding and apparently it really works.

I reported earlier about a local elementary school that was able to raise badly needed cash by using a crowd funding site. Now thousands of folks are raising money for everything from making movies to paying medical bills. For one San Francisco woman who is fighting cancer, it has done even more — it has brought hope.

Michelle Shutzer of San Francisco mingles with the horses that roam free at a Sonoma County farm.

“Hey Jody. Hey sweet pea, I don’t have any carrots today,” said Shutzer to a horse.

She doesn’t want to ride. Just to walk among them.

The farm is run by The Flag Foundation, which connects humans with horses for therapy. It has provided Shutzer new strength in her grueling fight against stage four colon cancer. “MacGregor” is a big part of it. The horse is blind, looking for his mate and Shutzer is looking for something too.

“When you’re here you are completely transported. There’s no disease, there’s no unhappiness,” said Shutzer.

She has chemotherapy but she’s also trying this therapy, naturopathic medicine and nutritional supplements. Her insurance doesn’t cover those treatments, but a website did.

Shutzer’s friends started a campaign on the crowd funding platform Fundly. The page “Michelle is a Miracle,” raised $20,000 in a couple of weeks. Much of it came from folks she doesn’t even know, as her friends reached out to their friends on Facebook, and the circle kept growing.

“You’d never think that a click of a button would do this, but really every single dollar that has been contributed to me, it’s like someone’s heart saying to me, ‘I will you to be healed,’” said Shutzer.

Crowd funding is a growing field that lets average citizens raise money for a range of pursuits. Everything from buying school supplies to rebuilding a neighborhood after a hurricane.

An 8-year-old Marin girl raised $55,000 on Fundly to fight slavery of little girls overseas.

One little boy with a lung disease raised $19,000 to buy games for children at a Massachusetts hospital.

And last month 7 On Your Side reported about Sunnyside Elementary School in San Francisco which raised $39,000 so far to make up a $40,000 budget shortfall and avoid losing a classroom teacher.

“We’ve been doing great. We didn’t expect to get this far so quickly,” said Rhiana Maidenberg, from the Sunnyside PTA.

The school used a different fundraising platform called GoFundMe. There are other sites too. Kickstarter helps artists and inventors to launch their projects and Indiegogo is a site for global fundraising.

“I can go straight to the need, fund the specific need, I can get a playground built,” said David Boyce, the CEO of Fundly.

Boyce is CEO of Fundly. He said Shutzer inspired donors to help save her life.

“It’s like a gift. It’s indescribable in words,” said Shutzer.

And MacGregor, the horse searches blindly for his mate, is an inspiration too.

You can set up your own crowd funding campaign for free, though that is just for setting it up. The websites typically take about five percent of the donations.


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