JOBS Act Giving Crowdfunding a Boost

The JOBS Act (Jumpstart Our Business Startup Act), a law that encourages the funding of U.S. small businesses and startups by easing various securities regulations, had the Reg A+ exemption go live on June 19th of this year. The exemption will further facilitate access to capital for smaller companies and provide investors with more investment options.

Smaller companies now have the opportunity to offer and sell up to $50 million in securities in an annual period, subject to eligibility, disclosure and reporting requirements. This is great news for startups and small businesses, of which 86 of the fasting growing startups in the U.S. call Utah home. Regarded as the next “Silicon Valley”, the state leads the Forbes 2014 list of top states to do business, and ranks third on CNBC’s list of the best states to do business.

Because of this, crowdfunding platforms, such as Seed Equity Ventures, are now closing the gap for entrepreneurs working to raise capital in the early stages of their business. Giving them a direct lifeline to make it out alive past their seed stage. All the while, they are providing investors worldwide the option to get involved with compelling new opportunities they otherwise wouldn’t normally find.

The introduction of crowdfunding into the financial landscape of today has created an easy exchange of capital between businesses and their investors through its efficiency in getting key information out to the masses. And the numbers don’t lie.

Last year saw a 167 percent increase in money raised for companies and individuals via crowdfunding; that’s a $15.1 billion jump from 2013. Over $250 million of that came directly from venture capitalists and strategic investors.

Startups with even the greatest potential who choose to not go the crowdfunding route often find themselves struggling to stay afloat in their early stages, namely the seed stage. This is because most venture capitals and institutions are more inclined to make an investment in a smaller business once it’s already been established in the marketplace and seeking to expand.


Crowdfunding – Democracy to the Business World

Todd Crosland GrowthAs the financial landscape continues to develop, and money can more easily travel from investors to businesses, certain products that show great promise see a greater chance of spotlight. Any start-up today would be remiss to overlook opportunities for crowdfunding in a technologically powered, democratically run world.

Crowdfunding is the easiest way for young entrepreneurs who are trying to introduce their idea to reach their funding goals through mass communication with and access to individual investors and investment firms. Because of crowdfunding, small ventures can reach mainstream appeal with relative ease.

The availability of funds helped Utah-based DemoChimp reach its financial goals by providing a connection to the outside. Businesses in Utah often struggle to reach the hotspots of angel investing (for example New York) and require crowdfunding efforts more than the average start-up. The newest in the digital community is DemoChimp. DemoChimp is primarily a business-to-business Software as a Service program that creates automated demonstrations of a product based on input criteria designated important by the customization of the user. It separates itself from more simple powerpoint slide introductions by designing mobile and visually interactive versions of a product for consensus-based presentation. It self-describes as software that “automates custom product demos to accelerate sales.” Its goal is to expedite, and nearly bypass, the process of manually arranging product demos to increase the adaptability of a typically, or formerly crystallized process. It is a highly organized form of data consolidation in a rapidly accelerating field. DemoChimp has already shown greater agility and dissemination of information with users feeling more comfortable about the priorities they can set for certain pieces or aspects of information. DemoChimp responds to the needs of the individual while representing the offerings of a business. It is cloud accessible and continues to facilitate the traveling of information across and outside of company lines.

DemoChimp & Crowdfunding

DemoChimp exemplified the essential benefit of crowdfunding by successfully raising almost $3 million from varied capital investors. It did this with the help of Albion Financial, Peak Ventures, and Seed Equity, a worldwide broker dealer and funding firm most affiliated with investments in start-up companies and digital campaigns. Seed Equity’s interest means a lot for DemoChimp, as the crowdfunding firm brandishes a personal mission of connecting the most promising business opportunities with global institutional and individual investors. This money raised from friends, related personnel, private investors, and large firms have established DemoChimp as a major player in the realm of business-to-business transactions.

The product continues to expand as it ventures into user-based automation, intelligently designing a demo around the specific demands of the viewer. Reports show that the artificial intelligence is embryonic but positively developing. This money raised from venture capital will be directed toward advancements in the software’s intelligence and marketing capacities. It will seek to find a balanced medium of granularity to assure maximum speed of operation with minimum overhead of communication. Funds not spent on the technical and operational components of the product will be directed toward new leads and customer acquisition. DemoChimp is already being operated by top corporations such as Microsoft and Hewlett-Packard, and its expansion into the non-digital realms is imminent.


Pebble Time Makes Crowdfunding History

Todd Crosland Pebble TimePebble Time has surpassed the Coolest Cooler for most successful crowd funding campaign of all time. The smartwatch startup company, Pebble Technology Corporation, plans to release their new Time smartwatch in May of this year. So far their Kickstarter campaign has raised over $16.5 million in crowdfunding revenue, surpassing the previous record holder, the Coolest Cooler, which raised $13.3 million. And Pebble Time still ahs 21 days to go in their Kickstarter campaign, as they were the fastest to raise $1 million in the crowdfunding website’s six-year history. They were able to raise $1 million in a little over a half an hour and over $6.2 million in under four hours.

The startup tech company held the previous record with their first generation smartwatch raising $10.3 million on Kickstarter in 2012. The Coolest Cooler, a cooler with Bluetooth speakers and integrated blender, took the crown last summer raising $13.3 million.

Pebble’s new Time smartwatch comes with an e-reader screen similar to the one used for Amazon’s Kindle. This allows for a longer battery life, as Pebble promises 7 days of battery life.  In addition to the extended battery life, the watch is also water resistant.

This startup company now has validation as it looks towards future competition with Apple’s smartwatch. The founders of Pebble have all but nice things to say about the crowdfunding website, Kickstarter, as they supported the company ever since they were just five guys in a living room in Palo Alto.

Pebble’s success on Kickstarter in 2012 really brought the crowdfunding website to life, as it paved the way for other tech hardware startups to use this method of gaining capital.

The small tech startup has been able to compete with the big players like Samsung, LG, and Motorola thanks to crowdfunding vis Kickstarter. The competition will be difficult, but this story demonstrates the power of crowdfunding in allowing smaller players to make big impacts and inspire market change.


Crowdfunding Tips for Startup Entrepreneurs

Todd Crosland CrowdfundingA recent article in crowdfund insider discussed different rules for crowdfunding success. Crowdfunding is a relatively new method for startups to build capital where the general public can invest in a company and gain equity. This method of funding developed so that entrepreneurs could reach a wider audience to raise money in the early stages of development. Crowdfund insider lays out six rules that a startup entrepreneur should be aware of if they decide to use the crowdfunding method for further support.

The first rule is to engage in the investor community. Entrepreneurs need to be present and easily reachable through social media. Research shows that entrepreneurs who are socially active in the investor community are able to attract more investors.

The next rule is every entrepreneur needs to have proof of concept. Having an idea will not obtain any entrepreneurs any investment. They have to have some sort of advancement in their product to prove that the product can be turned into a business. Whether it is sales numbers, awards, or partners signed on, there needs to be something more than just an idea to add to the credibility of the product.

Rule number three is to value your company at a price that isn’t too greedy or too humble. Investors pay attention to the entrepreneur’s valuation to evaluate the kind of entrepreneur that they are. The valuation acts as a self-imposed forecast to how their business will scale.

Next on the list is passion. An entrepreneur must be passionate about the product that they are putting forth. This will show that they are willing to work hard and put the effort into making their company successful. Passion also helps build a strong employee base as passion becomes contagious.

A unique selling proposition is one of the first aspects of a company that an investor looks at. The entrepreneur needs a clear vision as to how the company will succeed and deliver that message in a clear and succinct manner.

Last but not least, if an entrepreneur want’s to gain attention in the crowdfunding community, they need to have a video to tell their company and product story. The video acts as a resume and cover letter for a job; it is the first entry point to an investor. This is where the entrepreneur can clearly display their product, lay out their business plan, and pitch their vision. This is also the platform where entrepreneurs will show their personality and passion for the company as investors watch and make a preliminary judgment.

You can read these tips in more detail from the article itself posted here.