Entrepreneurs and private companies are now looking for non-conventional ways to raise finance to begin something new or expand their existing base. Non-traditional alternatives such as asset based financing and crowdfunding have become popular and this is just tip of the iceberg!

Crowdfunding especially, has become an easy alternative for Entrepreneurs and Independent ventures. It can be utilized to raise capital from a number of individuals, some of whom might be friends or family. Crowdfunding can be utilized to boost projects or inventions, launch a business, pre-sell new products, launch a new clothes line or even finance production costs for a feature film. 

Testing markets for a new product or raising working capital for raw materials or inventory are some other possible outcomes for crowdfunding. The situation is changing every day with the spirit of entrepreneurs, who like to stay undeterred when faced with a financial barrier. 

Billions of dollars are raised annually through crowdfunding and these platforms typically charge 5 percent or more on the funds raised.

But contrary to the popular belief, crowdfunding is an old concept. One of the most famous examples is the Statute of Liberty in the United States of America.

The American Committee for the Statue of Liberty was short on cash for the Statue’s pedestal in 1884 and a newspaper distributer Joseph Pulitzer saved the day with his innovative idea. He composed an article and distributed it in his daily paper which compelled about 125,000 New York citizens into contributing $1 or less to raise the cash required. 

This produced $100,000 to pay for the Statute of Liberty pedestal. As a token of appreciation, every contributor’s name was published in the daily paper. The facts of the case reflect modern crowdfunding elements. 

Modern crowdfunding has been around since the 2000s, here are some types: 

Debt – Interest is charged in return of the funds raised, with a specified time frame for repayment.

Equity – Ownership or a stake in the company/product is offered in return of the money contributed.

Unfortunately, Debt and Equity based crowdfunding is not allowed in India, at present.

Donations – Money is raised with no promise of something in return. Everyone contribute because they believe in the cause. 

Rewards – A reward is promised to every contributor, in exchange of the money raised. Rewards can be a Product, social media recognition or invite to an event.

Through crowdfunding, thousands of entrepreneurs and inventors have raised funding for new technologies, research and products. Crowdfunding makes it easier to enter the market which previously wasn’t so simple. Though, Crowdfunding can’t serve everyone’s purpose and different platforms don’t have everything in common, but it presents as a very easy and non-conventional method of raising finance.

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Xiaomi is not just a smartphone company or an electronic giant but is also a hub of innovation. With its innovative products released every other month, it has given the signal to the world that it will enter every sector that has any space for innovation. Recently Xiaomi-backed Yunmai launched a new wearable called the Yunmai smart training watch for INR 7200. If we take the clock back a few days to February 15, 2019, Xiaomi Mi Men’s Sports Shoes 2 were launched in India that featured Fishbone Structure and shock absorbance for INR 2500 and a Mi Luggage suitcase for INR 2,999 in September 2018. Now, Xiaomi is back with another innovative product. This time it has launched a crowdfunding campaign for smart fingerprint lock (AreoX Smart Fingerprint U-lock) that obviously operates on the fingerprint sensor but comes with a physical unlock key as well if the battery runs out.

Now, the important thing to notice here is that most of these products were launched through the crowdfunding campaigns, has innovation speak its best, are in budget and also curated keeping Indian customer requirements in mind. The crowdfunding project on Xiaomi’s crowdfunding platform YouPin has already crossed 1,011,000 Chinese Yuan (>Rs 1 Crore), which is almost 2.5 times of its set target. You can crowdfund and get the U-Lock with the shorter beam priced at 199 RMB(INR 2050) and the other one with the longer beam priced at 219 RMB (INR 2256) which is likely to start shipping from May 23, 2019.

Key features Xiaomi’s AreoX Smart Fingerprint U-lock Sports

As per the crowdfunding page, the U-lock can be used to lock bikes and even cars. The U-lock sports a stainless steel lock beam for which the company claims, can’t be easily cut with the help of a hacksaw and comes with “an anti-theft lock body”. The body of the lock is IP65 certified that makes it resistant to water and dust. The biometric identification can unlock within about 0.55 seconds and as to serve the purpose of any lock, to keep your belongings secure, the company claims that the lock detects dummy fingerprints within seconds. Its battery can last up to 12 months and you get a USB Type-C port in case, it gets discharged.

A smart lock that costs INR 2000 to save your precious belongings isn’t a bad deal? What are your views on this thing?

Sources:

Xiaomi announces the AreoX Smart Fingerprint U-lock priced at 199 yuan (~$29) – Gizmochina

Xiaomi launches AreoX Smart Fingerprint U-lock as part of crowdfunding program – BGR

AreoX smart fingerprint U-lock – YouPin

Main Image: ©

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1. The Chosen

VidAngel, an American streaming video and production company released a concept pilot of an upcoming television drama series The Chosen, a story of Jesus, which ended up being viewed over 15 million times on social media platforms. It is an effort to portray Jesus “through the eyes of those who met him”

The creators of the project had set a target of $13 million and have already raised $11 million from nearly 16,000 investors, as of 18 February 2019.

IMDb rating: NA

2. Veronica Mars

Veronica Mars used to be the popular girl? Yes, she was. She had cool friends and the jock boyfriend. The crowdfunding target was smashed as it had never been before when Veronica Mars” series was brought back to life in the form a movie with the help of crowdfunding campaign in 2014, seven years after the TV show was taken off-air.

Rob Thomas, the film’s director and co-writer said, “We raised the first million dollars in the first four hours, and in 12 hours we had hit our goal of $2 million”

The project ended on March 13, 2012 and raised $5.7 million in total.

IMDb rating: 6.8

3. Project Bring Back Reading Rainbow for Every Child, Everywhere

The project we are going to talk about now is based on television series that garnered 26 Emmy Awards, over 200 broadcast awards and a Peabody Award. Yes, you read that right.

Reading Rainbow(June 6, 1983, to November 10, 2006), an American educational children’s television series was brought back to life by making it available on iPad, on the web, game consoles, set-top boxes and other mobile devices. Also, the goal was to provide subscriptions of the classroom version to 7,500 disadvantaged classrooms for free. The show teaches reading skills, habits, and attitudes.

The campaign garnered $5.4 million by July 2, 2014, when the campaign ended.

4. Super Troopers 2

As you can pretty much infer by the name itself that the movie was a sequel to Super Troopers(2001). The characters found a place in people’s heart so much that the project to bring them back to life was heavily crowdfunded. It is an American comedy movie directed by Jay Chandrasekhar. Don’t you think if there is a sequel to a movie, the first one could be a must watch?

The project was able to raise $4.6 million by Apr 25, 2015.

IMDb rating: 6.1

5. Wish I Was Here

Remember Zach Braff from the movie Garden State? It is him again. Wish I Was Here is an American comedy-drama movie directed by Zach Braff himself. If you miss Zach, watch it.

The project was able to raise $ 3.1 million by May 24, 2013.

IMDb rating: 6.7

6. Lazer Team

Lazer Team is an American science fiction action comedy movie directed and produced by Matt Hullum. A group of four forms the Lazer Team, who find themselves responsible for the fate of the planet. Do you ask why? Because they discover an alien crash site containing a battle suit.

The crowdfunding project collected $ 2.5 million by July 6, 2014

IMDb rating: 5.6

7. Gosnell: The Trial of America’s Biggest Serial Killer

This one shall freak you out. It is an American film based on real-life events about Kermit Gosnell, a physician and abortion provider. Kermit was convicted of involuntary manslaughter in the death of a patient undergoing an abortion procedure, first-degree murder in the deaths of three infants born alive, 211 counts of violating a 24-hour informed consent law and 21 felony counts of illegal late-term abortion.

The crowdfunding project raised $ 2.2 million by May 12, 2014.

IMDb rating: 7

8. Blue Mountain State: The Movie

Blue Mountain State is a sitcom that portrays certain aspects of American university life including sex, drugs, wild partying, American football, binge drinking, and hazing.

The crowdfunding campaign successfully raised  $ 1.9 million by May 15, 2014.

IMDb rating: NA

9. Road Hard

Road Hard is a comedy film co-written by Carolla and Kevin Hench and directed by Adam Carolla. The story revolves around Adam Carolla who is desperate to revitalize his once-successful television career. He plays the role of an embittered comedian who is forced to hit the road and perform in low-profile stand-up gigs.

The movie project garnered $1.4 million in its crowdfunding campaign by Aug 2, 2013.

IMDb rating: 6.1

10. Da Sweet Blood of Jesus

Da Sweet Blood of Jesus is an American horror film directed by Spike Lee. The story revolves around a wealthy anthropologist who is stabbed by an ancient African dagger and turned into a vampire.

The project successfully raised $1.4 million by Aug 21, 2013

IMDb rating: 4.1

Sources:

List of highest funded crowdfunding projects – Wikipedia

IMDb

Main Image: ©Worldview Entertainment Double Feature Films

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Now, if you are thinking if your idea, initiative or whatever you have in mind is not something that the crowd will be interested in supporting, let me clear your doubts. You just need to look out for the multiple solutions possible. Figure out the ways how other people approached the same issues you are facing now. You will become an alchemist, my friend. You will create magic.

Be it politics, healthcare, real estate, women entrepreneur oriented crowdfunding, crowdfunding startups, fintech, technology, legal, rescue and causes, innovation, some crazy Innovation, gadgets, brewery, education and whatnot, crowdfunding is the key. Stop hesitating, start crowdfunding.

Here is an infographic tracking the scope of crowdfunding in different domains.

Equity and debt investment crowdfunding is another gem adding to the beauty of crowdfunding. You can learn more about it in the preceding hyperlink.  

The beauty of crowdfunding is in its omnipresence, be it crowdfunding for education, legal, startup, healthcare, gaming or political.

To read more on the above infographic, read the following write-ups.

Politics

• Atishi Marlena, AAP’s East Delhi Parliamentary Seat In-Charge’s Crowdfunding Campaign Reaches Rs 19 Lacs

• Shah Faesel, The Kashmiri IAS Officer Launches Crowdfunding Campaign Seeking Donation For ‘Clean Politics’

• Dmytro Gnap, A Former Ukrainian Journalist Crowdfunding His Bid To Be Ukraine’s Next President

Legal

• Julia Salasky, The Women Who Made Justice Accessible With The Help of Crowdfunding

Startups

• When Blockchain, AI And Big Data Became Friends With Crowdfunding In India

• Black Hops, One Of Australia’s Fastest Growing Breweries, Invites Backers To Its Equity Crowdfunding Campaign

Women Entrepreneur Oriented Crowdfunding

• Cheer Up, Ladies! Studies Show How Women Are Outshining Men When It Comes To Crowdfunding

Fintech

• Crowdcube, The UK Based Crowdfunding Platform, Announces £500,000 Fund To Boost Inclusive U.K Fintech

• EY Report: Crowdfunding Outraces Bank Financing As Preferred Option In the UK

Healthcare

• iDyslexic, An App Facilitating Brighter Future For Students With Dyslexia Goes Live Ahead Of Crowdfunding

• Crowdfunding Campaign Of A Medicinal Cannabis Company In New Zealand Reaches $820K

Innovation

• FOCI, A Wearable That Will Help Boosts Your Focus Like Sherlock’s Is Finally Here

• CycleWing, A Deployable Wind Propulsion For Bicycles Is Now Crowdfunding On Kickstarter

Rescue And Causes

• Crowdfunding Campaign To Treat The Shot & Robbed Telangana Engineering Student Sai Krishna In Michigan Goes Live

• Crowdfunding Initiative Supported By Messi, Mbappe & Other To Rescue Missing Emiliano Sala Reaches £370k

Gadgets

• All-In-One Modular Smartphone Doogee S90 Is All Set For Its Crowdfunding Campaign Launch

• Meizu Zero, World’s First Holeless Phone Goes Live On Indiegogo Crowdfunding For $1299

TV Shows And Art Projects

• The Chosen, A TV Show About Jesus, Issues Equity, Making It The Largest-Ever Crowdfunded Campaign In The Category

• Show4me, A Music Interaction Network & Crowdfunding Firm Closes $12.8 Million Funding Round

I hope you enjoyed reading it. Let me know what do you think of the scenario of crowdfunding in India. Criticise it, or ask questions if you think I can answer them. Let’s have some conversation. Over to you.

Learn how to create your first crowdfunding campaign.

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Black Hops Inception – 2015

The genesis and development of this thought about opening up a brewery manifested when 3 mates Dan, Eddie and Govs began discussing a concept over a beer at the pub. They decided that they will make craft beer and share everything they learn along the way. Eventually, they made their first beer, the Eggnog Stout.  

They brewed the world’s first official Call of Duty beer in 2015 and successfully raised $17,000 via Pozible to become the first Aussie brewery to launch via crowdfunding.

Accolades

Black Hops was recently awarded 5 Gold Medals at the 2018 Australian International Beer Awards.

They were honoured with two trophies including the Champion Small Australian Brewery, making it one of Australia’s highest rated and fastest growing breweries.

The Brewery will feature investment rewards from $50 and up to $10,000 for retail investors. Investors will be offered priority access to limited release beers too. Black Hops has set a target to raise $400,000 from investors through this equity crowdfunding campaign with Birchal.

This is what Dan Norris, co-founder of Black Hops had to say on “equity crowdfunding”

“We’ve been following the process for legalising equity crowdfunding for a few years. Now that it’s finally here, we are looking forward to being one of the first breweries to run a campaign and the first to use equity crowdfunding to help fund the opening of a brewery.”

“One of the best things about crowdfunding is how great it is at building up a group of advocates and followers. We’ve done this since day one with our Black Hops Ambassadors.”

He further added, “Backers are likely to be fans and advocates of your business and thrilled to be part of the action. And what better advocates for your company than the people who are prepared to buy a stake in it. We believe that equity crowdfunding is a great way for everyday drinkers of our beer to become investors and share in our future growth.”

Overview

Previously, under the crowd-sourced funding (CSF) regime companies were required to convert to unlisted public companies before they could raise funds under the regime. Now, it has been expanded to include proprietary companies as well, thereby such companies can raise up to $5 million every 12 months from retail investors on a licensed CSF platform.

Read more- What are Different Crowdfunding Models that have steamroll Traditional Financing?

Main Image: © Black Hops

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It’s not a new concept! Memorials and worship places have been funded and built in by small donations for years. In the recent years, Indian startup story has witnessed more twists than before. If you are also a part of this startup story, crowdfunding can be the way of connecting investors and bring your story to life.

Here’s how does it work?

Selecting the project and building a story

Launching a new product or starting a campaign should be specific with a perceived outcome. Your campaign should be time bound. Try to make a complete story that would appeal people to contribute in your product. Make them understand why your project is unique and what problem you are solving that will compel your potential backers to fund you.

Mount a funding budget

Set up a specific budget you need and be clear where it will go. Be precise about meeting up your targets as it allows the investors to know the licitness and credibility of your project. It shows that people have been interested in backing up your project,

The budget should include the commission fees of your crowdfunding platform and the reward budget.

Choosing a Platform

It is the one of the most important and crucial step in launching your crowdfunding campaign. It depends upon what type of project you are launching and what your goals are. There are loads of platforms to decide from such as Milaap, Indigogo, Catapooolt etc. which offers you a good stuff of audience.  You need to decide between:-

Reward and donations based – Offering ‘rewards’ and perks for your backers is always good. You could give them gifts and perks based on how much contribution people pledge.

‘All or nothing’ or ‘Keep it all’- Some platforms keep the rule of ‘ All or nothing ‘ where if you don’t meet your target you will have nothing. And platform like Catapooolt offers you to get all the money minus their fees, even if you fail to meet your target.

Prepare a pitch and promote your campaign

Prepare an overwhelming pitch about your campaign telling who you are ,what’s your idea, why you started that will revoke the interest of your potential pledgers. Have an impressive pitch video catering a personalized strife to the viewers. You have to make people informed about your crowdfunding campaign. Create a coordinated online social media campaign with the help of your crowdfunding platform. Reach out to media and people to have more coverage to your campaign. Encourage them to back up your campaign by hosting an event or through any other engagement. It is not easy to arouse people’s interest unless you give your full commitment to your campaign. Be passionate enough to turn your dream into reality.

Follow Feedback

It is your backers which helps you to climb the mount. Taking your customers feedback seriously is really significant. Getting reviews and making improvements is essential before launching the campaign. Keep in touch with your supporters and keep them modemised about your progress. Thanks them and let them feel that their contribution is making a difference.

Its time to capitalize your venture and let your business grow through crowdfunding. The arise of crowdfunding has provided an alternative to traditional ways of funding. It is an effective way to help entrepreneurs in reaching their dreams. The increasing social media trends inculcates perfect conditions for crowdfunding as a fundraising tool to prosper in the capital market. So fund your project and go crowd out loud!

The post What is Crowdfunding and how does it work? appeared first on Catapooolt.

“Crowdfunding is creating a new public demand which connects common people with investment opportunities that used to be accessible only by the very wealthy.”

And there is no doubt or secret to the intricacies of investment that crowdfunding has aid to small businesses or the newbies of the startup world by connecting them to the common public for raising capital. Crowdfunding simply means, getting funds from a large number of people with the usage of the internet and an online social media platform. The inception of this modern day crowdfunding dates back to 1997 when a British rock band funded their reunion tour through online donations from fans. Since then, crowdfunding has taken many forms and has emerged as one of the most effective options for entrepreneurs and other project initiators to validate their ideas.

So let’s understand some of these different dimensions of Crowdfunding and gets penetrate about them:-

1. Reward- based Crowdfunding

This model of crowdfunding is mainly used by startups who want to accelerate the pace of their initiative and by other projects of artists or film producers, software development or civic projects etc. Reward crowdfunding is based on the perks or rewards a potential backer gets in return of the investment made by him/her. Rewards can be in the form of product or service, he/she is backing up or any other rewards mentioned in the campaign in prior.It is a lucrative method to raise funds as donors donate in the expectation of return. The rewards are differentiated on the basis of backers contributing smaller amounts and the ones who cater gratitude.

Following perks can be rewarded to the potential patrons:

• The backers who contribute less than rs.500 can be revert back with the recognition through the way of a ‘Thank You’ note or a gift card or simply by thanking them personally on the campaigner’s social media page. Make them realize that their every effort is worth of a count.
• Contributors can be rewarded by services like giving them discount, or some smaller reward tiers like shout outs or exclusive t-shirts.
• An effective way of rewarding is pre-orders. Backers will back up in the expectation of availing the product they are contributing their money for.

Companies like Catapooolt, Kickstarter and Indiegogo have emerged as the best reward based crowdfunding platforms of India and are helping hundreds of startups gaining funds for various causes.

2. Equity- based Crowdfunding

SEBI (Securities and Exchange Board of India) regulates the rules regarding Equity Crowdfunding and has made it illegal in India. In this model of Crowdfunding, the backers are termed as ‘investors’ because they invest their money into the company for an amount of share in it on the basis of capital invested. Primarily, these investments are made in the companies with the goal of making a return in 5-6 years.

Usually, a large amount of capital is raised through this model and not the smaller ones. This amount is mainly for either launching a company or taking a big leap, not just for backing up a cause. In India, such funds are raised through an angel investor or a VC for a startup. We have been using other forms of crowdfunding that is reward or donation based, so if you want to raise capital you can avail the advantages of crowdfunding through platforms like Catapooolt for ensuring a swift capital coming in your way.

3. Debt- based Crowdfunding

Also known as ‘Peer-to-Peer Crowdfunding’ or ‘Crowdlending’ is a model based on the process in which investor invests in your project in return of the ‘interest’. Money lent by multiple investors in small amounts through the internet is called Debt-based Crowdfunding. It is somewhat similar to loan except that in crowdfunding, loan is borrowed from a number of investors in small amounts rather than from a single bank. Debt Crowdfunding has an edge over bank loan because of the interest rates being lower and funds can be garnered with ease by reaching among the masses at the same time.

It can be an optimum method for businesses that might get failed to raise loans from banks. But as the saying goes, nothing comes exquisitely. The drawbacks faced by debt-financing are the regular interest payments and the security that companies have to pledge against their assets. Thus, it may be suitable for companies who have already established venture and adequate assets or sufficient cash flow credibility.

A Quick Collation

A major asset that Debt Crowdfunding has over an Equity Based Crowdfunding campaign is that the campaigner doesn’t have to lose any share in its company. Thus, investors are serviced only with the profit share and the owner continues to enjoy his ownership. Equity Crowdfunding is illegal in India. Therefore, for newly established ventures, an imperative option can be to go for the reward and donation based models of crowdfunding. Whatever the model you choose, just go dig well before in the advantages and disadvantages it chalk up.

The post What are Different Crowdfunding Models that have steamroll Traditional Financing? appeared first on Catapooolt.

Crowdfunding has come up as a resolution for that. It is a way of linking project initiators to their potential backers. Crowdfunding is the process of raising funds through a large group of people, especially via internet, which involves a platform, the entrepreneur in need of funds and the people willing to contribute the idea in exchange of rewards and recognition.

Crowdfunding is now emerging as an effective funding avenue in India with a transaction value expected to show an annual growth rate (CAGR 2018-2022) of 28.0% resulting in the total amount of US$21.7 m in 2022. Thus, entrepreneurs can derive huge benefits through this emerging avenue of fundraising which can help them to flourish in the market, if necessary efforts and dedication is put in.

Let see how crowdfunding is advantageous to new entrepreneurs.

Access to swift startup capital

Entrepreneurs usually end up with countless rounds of banks visits and offices of investors which indicates that raising capital is not an easy task. Crowdfunding helps you to save the time and energy you otherwise have to spend on negotiating and prospecting funds from these institutions. Moreover, if you raise investment through other means you may have to lose your equity in the company. Whereas crowdfunding helps entrepreneurs to raise funds from community of people by simply allowing them rewards and perks along with having no equity to give up and no money to pay.

Effective form of Marketing

Crowdfunding is much more than just getting your project funded as it helps you to connect to the people and introduce your vision to the market. A good crowdfunding campaign offers you to reach numerous channel and in order to raise more funding, you tend to market your product more effectually which makes crowdfunding an effective marketing tool.

Social media being an essential component of the crowdfunding process allows you to get a good traffic to your sites and social media pages, creating a demand for your product at a much earlier stage. And once you generate required funds you will get assurance regarding your marketing strategy and validation of your idea.

Reach to large audience

Before you even go public, crowdfunding helps your company go global by enabling you to reach beyond boundaries.Raising funds through crowdfunding helps you target large group of people backing your offering. Moreover, it helps to create a loyal fan base. Investors do not just become your customers but also boost your customer base by extending their word of mouth to their connections.

Validating the idea

Showing investors the validation of your market at such early stage is very difficult. But, crowdfunding helps you to influence investors by giving them a proof of your concept. Letting them know that you had a successful crowdfunding campaign makes them realize about your product’s credibility. A successful campaign tests the public’s reaction and verifies the track of one’s progress confirming that you are on a right way!

Feedback and expert’s guidance

Feedback is really important to attest one’s journey of entrepreneurship. A startup goes with numerous activities sinking their money much before they understand about the product’s demand. Crowdfunding helps entrepreneurs find what their audience exactly thinks before eve spending a penny. The feedback you receive may help you crating your product a better and stronger proposition which may end you up with much more success and letting your venture to prosper.

We understand that entrepreneurs step out with big visions and dreams in their eyes. Crowdfunding caters you a way to bring out your venture to life. It serves as a superb avenue for entrepreneurs for funding their startups and helping their project grow. So treat yourself and your startup with crowdfunding to realize your dreams that go far beyond your imagination. Have a throw at your competitors and get an early edge over them by grabbing the associated advantages of crowdfunding.

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