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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However, after SEBIs (Securities and Exchange Board of India) new guidelines, a lot of questions have been raised as to whether crowd-funding will be able to achieve what is worth since equity crowdfunding holds no existence in India now. But the massive response that reward based crowdfunding portals are getting, clearly illustrates that Indian markets are investment ready, thereby proliferating the effect. Hence, emerging start-ups, social causes, events, tech innovations and even real estate can look at it as one of the major avenues for fundraising.

So, the sectors that can expect a lot from crowd-funding are as follows:

1. Social Causes-  People around are indulged in some or the other way to benefit the society. For such social causes, crowd-funding can be extra beneficial as it can fuel up the entire initiative by gauging financial help and stitching more hands to join the initiative or cause.

Source- The Hindu Business

2. Innovation Start-ups-  For start-ups, reward based crowd-funding has become the easiest way to reach out to masses in the first phase of launch itself. This in indeed instilling them with lot of confidence in themselves as well as the product because they are not just raising funds it is also fetching them with a POC (PROOF OF CONCEPT) at a very early stage which helps them in company evaluation. Also, when a start-up raises funds first via a crowd-funding platform and then reaches out investors, it gives investors a lot of confidence in the product because if masses are ready to support, then it is quite evident that the product will be a big hit post launch.

3. Tech Products- Young students, tech geeks, coders, hack-a-holics are working hard to come up with the most creative, hard to think and innovative products in the market to make lives simpler and easier. Crowd-funding is the best way to let people know about these innovations and also enable them to become a part of the product life cycle by creating a backbone for the innovation and be the their first set of early adopters.

Source- oberlo

4. Events and Festivals- We see a lot musical festivals, religious festivals take up the crowd-funding way, to easily access the crowd, generate visibility and sell out tickets early. Music festivals such as Control Alt Delete, DIY Day and Bangalore Open Air festival are a few examples of events that were almost entirely funded by crowd contributions in 2014. One such recent event that was also crowd-funded was Cultural Fest organised by Art-Of-Living, which gauged a lot of mileage through this initiative.

5. Films and Music Albums– “Fans have the power to make or break a celebrity” is very rightly said. They are those who with their power can also launch music albums and fund movies that they wish to. With recent developments in the crowd-funding and crowd-sourcing industry, music albums, movies, theater shows, plays are proving to be crowd pullers because they can showcase to their audience that once launched, they can be huge success.

6. Authors and Books- Getting a book crowdfunded is the new trend for self-publishing authors. Crowd-funding is the best way to procure pre-selling orders for books that have not yet launched, which also helps in generating a fan base and relieves you from the stress of tight funds. Therefore, before you even launch your book, you are already there on people’s shelves and all of this by sincerely leveraging the power of the crowd, who can also become your potential investors.

7. Artists and Art Projects- Very recently, an SRCC student group named “iOTA” launched their crowdfunding campaign to promote Indian art and artists whose DIS-ABILITY is their ABILITY. This campaign gauged a lot of eyeballs and momentum amongst the youth. Similarly, many other artists are looking at Crowdfunding as a decent opportunity to get traction, visibility and worth for their art.

8. Real Estate– Real estate developers admit that crowd-funding is a double-edged sword and needs to be handled carefully. Currently real estate is going through a tough phase, suffering from liquidity woes, lack of transparency, project delays, long gestations period and lack of regulation in the Industry but once crowd-funding enters the picture, all these woes and grievances are taken care of automatically. And according to the back builders and developers, the ROI from crowd-funding in Real Estate has proved to be it to be the best investment so far.

All this very clearly illustrates that Crowdfunding has become the mainstream alternative to conventional and orthodox modes of raising funds. Therefore, as per my perspective of crowdfunding, it promises a bright future and remarkable growth in the times to come, because crowd-funding not only ensures that investors fund the campaign, but people who believe in the project also become a part of it.

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Since new businesses aren’t always the preferred choice for bank loans and investments, Crowdfunding is quickly becoming a new alternative. And if we focus specifically on reward based crowdfunding, we’d find that it’s a way of raising funds without having to return a single penny!

‘But! What is reward based crowdfunding?’ – And we thought you’d never ask.

The base of this type of crowdfunding is the online tech platforms that enable easy access to all the information about the project being crowdfunded and feature to back the project on the spot. The campaign owner – who is looking to raise the funds – puts up all the essential information about his business/product/cause in form of a write up aided by visuals or even a video.

Made insanely popular by forums like Kickstarter and Indiegogo, Reward based crowdfunding works well for new business and social projects who are looking for quick fundraising. Another very core element to this type of crowdfunding is that it limits investor’s access to entrepreneur and still manages to maintain the legitimacy of the business proposition.

The lower target amount with the short campaign duration gives a sense of practicality by setting achievable targets. Plus, the presence of visuals on the campaign page add an edge to the pitch, where the backers can get an accurate feel of the products/causes they are backing.

Even the stats are encouraging.

Looking back into crowdfunding, some of the best examples of reward based crowdfunding campaigns in the recent years are astonishing.

In technology, Pebble Smartwatch raised $20 Million, almost 4,000% of its original goal, in early 2015. Talking of social causes, Flow Hive, a unique Bee hive invention broke all records and raised $2.8 million within first 24hours, as compared to its original target of $70K in 2016. In product pre-sales, world’s best travel jacket, with all-in-one features, raised over $9 million, going way above the initial $20K goal in 2015.

Yet the best part is…

The cherry on the top for reward based crowdfunding is you don’t have to return the money, nor are you expected to provide equity or interest in exchange for the funds. Though what the backers do get in return, however, are the rewards. For example, a fashion designer may offer customized outfits for the backers contributing over Rs. 5,000 for his/her campaign.

Similarly, a tech product, for example, a smart watch or a drone may promise the product to be home delivered to all backers who chose to buy it through the crowdfunding campaign. Offering creative Rewards can add value to your campaign and make the backers remember your platform. 

Like many campaigns offer social media acknowledgements, flashy badges and goodies that the backers can flaunt on social media. This serves two purposes, one the backer feels gratified at having contributed to the campaign and gets something extra to show off on Instagram. The other being, that this practice creates a loyalty in the hearts of the backers, who feel personally involved with the campaign and have social proof to show for it.

All in all,

Reward based crowdfunding is an easier alternative of raising capital for creative businesses and social causes, without the pressure of repaying a loan or stress of interest rates. But there are several things to be kept in mind before a business starts a crowdfunding campaign, for example you need to have a convincing story and you need to be ready to do some of the work yourself.

Crowdfunding is now made easy with Desired Wings. Just sign up and create your own crowdfunding campaign today!

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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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FOCI is a biometric wearable that helps boosts your focus. It can be clipped to your waist and let me tell you it looks and feels cool, sporting different color variants. The product is a result of 2 decades of research. It learns your cognitive states from breathing patterns and helps you improve 4 types of focus=

Mind orbs for your cognitive states

Notice the Mind Orb switching color immediately when you lose focus.

Measure your mental performance and improve it.

Improve your focus with AI

Vibration feedback near your waist to nudge you back to focus

Audio guidance for better performance

Train your mind with the habit of sharp focus.

FOCI is available on Indiegogo and has been 1168 % funded. What are you waiting for? Grab one. Be smart.

Main Image: ©DeviantArt

Lemon.Connect – Biggest Fintech Conference in London #JoinTheConf April 23 – 26, 2019. Register now!

The post FOCI, A Wearable That Will Help Boosts Your Focus Like Sherlock’s Is Finally Here appeared first on Catapooolt.

“I must study politics and war that my sons may have the liberty to study mathematics and philosophy. My sons ought to study mathematics and philosophy, geography, natural history, naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry, and porcelain,”John Adams, US diplomat & politician (1735 – 1826).

So, what did you interpret by what US diplomat & politician, John Adams had to say? What I understood was that art is something that is clean, honest and makes us feel divine and if it was not about survival, wars, money or materialistic things we would be spending more time exploring it. Now, you might be a scientist or an analyst or a doctor, where do you find yourself when looking to enjoy your free time? Is it listening to music on your headphones? Is it going out for a movie with your family? Is it reading that fiction novel?

The point I am trying to make here is that art is something that makes us feel human and that is something we are really missing in this century. Also, a lack of money for the talented but middle-class artist and lack of awareness is killing it. People need to show their trust in crowdfunding platforms like PledgeMusic and other such that are struggling with the same. But hey, here is some good news for this art form.

Back to the story

Wefuture, a UK-based startup that operates a crowdfunding platform and ‘music interaction network’ called Show4me, says it has closed a $12.8 million funding round, with the investment coming from an unnamed UK-based corporate investor. As per Show4me’s founder, Karėn Chiftalaryan, the latest funding round is the platform’s third having attracted $13.5m total investment so far.

Show4me is a platform designed to ‘help musicians and music industry players manage their music business activities on a single specialized network, grow their fan base and engage them through unique direct-interaction model’. The company claims that over 5,000 musicians and music business execs are registered on the network prior to its official launch.

This is what Karen had to say on the latest funding raised.

Karen said, “By raising a total amount of $13.5m within three investment rounds, we are confident in the future and further developments of the network.”

He further added, “What we give is a short path to success for talented musicians and bands with increased revenues, lower risks, and monetization right from the start. All the processes involved are significantly simplified and sped up, which frees up more time for creativity.”

Now, will you back a budding artist? I hope you do. 

Main Image: © Music Business Worldwide

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1. “If you launch your campaign with zero audience, you are launching to crickets.” – Khierstyn Ross of CrowdfundingUncut

2. “Life is not scripted. Conversations with our donors should not be either.” Lauren Semple.” –  Aching Arms.

3. “Most giving is 80% emotion and 20 % rational.  And the best way to get to someone’s emotions is to tell a story.” – Unknown

4. “No one has ever become poor by giving.” – Anne Frank

5. “The only thing that matters a damn is the donor experience.” – Mark Phillips

6. “Do you Homework. Trying to throw together a campaign in a few days and thinking that you will shoot the moon is highly unlikely.” – Chris Muscarella of Field Company

7. “Fundraising is the gentle art of teaching the joy of giving.” – Henry Rosso

8. “Something we have done really well with our campaigns is that we are extremely transparent. We go to great lengths and to create and justify our designs.” – Peter Dering of Peak Design

9. “If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them.” – Jeff Brooks

10. “Before you even start building your crowdfunding page, Start building a crowd first.” – Roy Morejon of Command Partners

11. “Donor loyalty is not about the donor being loyal to you, it is you being loyal to the donor.” – Harvey McKinnon

12. “You must always be honest with your backers about what you do and why you do it.” – Mihail Klenov of Half Bikes

13. Fundraisers should use pride, not apology, when asking for a gift for a charity that is doing good work. – Henry Rosso

14. “Fundraisers are the catalysts of change.” – Unknown

15. “The best campaigns I have worked with tell a specific story to a specific group of people.” – Clay Herbert of Fund Your Dream

Main Image: ©Catapooolt.com

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Due to such unfortunate events the Banning of Unregulated Deposit Schemes Bill, 2018, which aims to check unscrupulous entities from cheating gullible investors, was introduced in the Lok Sabha in July last year. This proposed legislation to check Ponzi schemes can make crowdfunding illegal and financing for startups more difficult unless the concept of an “unregulated deposit” is explicitly defined in the bill, according to M Veerappa Moily, chairman of the parliamentary standing committee on finance, that submitted its recommendations on the bill to the Parliament earlier this month, on January 3.

Even though the panel appreciated the intent of the bill, it expressed its concern over unbridled powers the proposed law gives to enforcement agencies by not defining “unregulated” deposits explicitly.

According to the proposed bill, except deposits that are regulated by regulators, all other fund-raising activities will fall within the definition of “unregulated” deposits.

As per the bill, legitimate deposits, are overseen by the Securities & Exchange Board of India (SEBI), National Housing Bank, Pension Fund Regulatory and Development Authority, Reserve Bank of India (RBI), Insurance Regulatory and Development Authority of India (IRDAI), Employees’ Provident Fund Organisation, the ministry of corporate affairs and other schemes offered by state governments.

“There are also financing arrangements and channels of financing, involving entities in the informal sector including startups and small entrepreneurs, which may by ‘default’ fall under the ambit of ‘unregulated scheme’ due to absence in the Bill of a coherent, clear-cut definition of ‘unregulated’,” the report said.

“We have submitted our recommendations. Now, it is up to the government to apply its mind and accept or reject our recommendations,” Moily said.

This is what Subhadeep Bhattacharyya, co-founder, jubi.ai, a Mumbai-based tech startup has to say on the subject

Subhadeep said, “In India, the angel ecosystem is not well defined. Their funding cheque-sizes are often very small. Most of the investors are now consolidating their investments instead of funding more number of startups. The global ecosystem is well ahead of us. At this point in time, a bill in its present form can have a negative impact on startups. This is the time for India to nurture startups.”

Shruti Rajan, a partner at the law firm Cyril Amarchand Mangaldas remarks and shares her suggestions on the bill.

Shruti said, “The solution to that could be to introduce exceptions based on ticket size, nature of the investor, etc in this bill. But as and when SEBI introduces a regulatory structure for crowdfunding, one would have to go back to this legislation and bring in necessary amendments as well.”

She further added, “A law like this, therefore, only reinforces the importance of protecting that last-mile investor/depositor. Once it becomes law, the bill does not prohibit fund-raising from NBFCs (non-banking financial companies), MFIs (microfinance institutions), etc, even where formal banking channels are not available. In a way, this will also encourage small ventures to seek formal lines of credit rather than unorganised pools of capital for funding. All this serves the larger financial inclusion goal very well.”

Sources:

Proposed law on ponzi scheme to hurt crowdfunding for startups: Panel

Main Image: © Indian Express, file photo

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VidAngel, an American streaming video and production company released a concept pilot of The Chosen, a story of Jesus, on social media that ended up being viewed 15 million times. Yes. That actually happened. No kidding.

This is what Dallas Jenkins, director and co-writer of the series, who recently directed The Resurrection of Gavin Stone for Blumhouse Productions and Walden Media, has to say on the miracle:-

“We started this campaign with no built-in audience and we based it on a short film I made on my friend’s Illinois farm for my church’s Christmas Eve service after my previous film had disappointed at the box office,” Jenkins said. “What’s happened has blown us away, but it’s an indication that there’s tremendous demand for something like this. I love binge-watching original series, so why not one about Jesus and his followers?”

The project utilised “equity crowdfunding” to raise money for the scripted show, offering one share for each dollar invested. The production company artfully issued equity to investors making the use of a provision made in 2016 in President Obama’s so-called JOBS Act. The “equity crowdfunding“ is highly regulated by the Securities and Exchange Commission(SEC), but has stated that production companies and other entities can offer a share of the profits to online strangers who financially invest in their projects.

This project called “The Chosen” is live and has raised more than $9 million. They are seeking $13 million to produce a full series.

Here are the historical statistics of crowdfunding in any TV show:

Super Troopers 2, the record-holder for film and TV category in Indiegogo raised $4.6 million. Mystery Science Theater 3000, which was later picked up by Netflix had raised $5.8 million on Kickstarter. None of these projects at Kickstarter or Indiegogo offered equity to investors.

What shall we learn from it?

Equity crowdfunding and rewards basics. 

• It should be noted that these shares can’t be resold at this time, but managers of the production company have guaranteed that they shall not accept any profits — should there be any — until all investors make at least 120 percent on their investment made. Investors could also potentially make more money, as they are the partial owners in perpetuity. VidAngel and crowdfunding investors are hoping to make a profit via streaming and broadcast licenses, DVD and VOD.

• Instead of the usual reward schemes, like tickets to screenings, DVDs or one on one interaction opportunity with actors, they chose to go with equity crowdfunding and the results are in front of you.

You can watch the pilot of “The Chosen” and listen to the team behind the project in the following videos below.  

Do let us know your views on the matter discussed. If you also have any idea that has been lingering in your mind for long and has not manifest just because of lack of funds, you can launch your campaign with Catapooolt – India’s largest crowdfunding platform.  

Main Image: ©VidAngel

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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!

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