What You Need to Know About the New Crowd-Funding Bill

By Jeff Steele at TheWrap The U.S. House overwhelmingly passed its first significant crowd-funding legislation, in the form of H.R. 2930, the Entrepreneur Access to Capital Act.   The bill (now in the Senate) amends the Securities Act of 1933, by allowing entrepreneurs to crowd source (online) up to $2 million per year in investment capital directly from individuals without having to register the investors with the SEC. However, the commencement and completion of the raise do need to be filed with the SEC.   Entrepreneurs (the “issuers”) must provide potential investors with audited financial statements in order to qualify for the $2 million cap, otherwise you are capped at $1 million.   Individual investments from crowd-shareholders are capped at $10,000 (or 10 percent of their annual income), whichever is less. To be clear, this is not free money; these are bona fide investor-securities for which they will receive a return on their investment as well as ownership interest in your enterprise, be it film, music, games, art, books, inventions, startups, etc. Many filmmakers have raised funding for films on popular gifting sites like Kickstarter and IndyGoGo. These sites have found success raising free money for ultra low budget films and other projects through crowdfunding models where people can pledge as little as $1 and as much as they like to a variety of different projects. That is free gift-money that cannot be paid back, so project benefactors have no financial interest in your film, nor can they take a charitable deduction on their gift (though some sites have contrived charitable workarounds.) H.R. 2930 specifically amends the “Requirements with Respect to Certain Small Transactions” (Section 4A of the Securities Act), by providing for registration exemptions for certain crowdfunded securities -- the details of which are summarized at the end of this article. Some important points worth highlighting are: The $1m/$2m funding caps and the $10,000 investment cap are pegged to the Consumer Price Index for all Urban Consumers, so they can be adjusted over time (this prevents the caps from becoming outdated.) A requirement that the issuer or broker use a 3rd party for cash management (this keeps prying fingers out of the cookie jar.) A requirement that the issuer or broker raise at least 60% of the target offering to take possession of the funds (this is a good because it keeps the issuer from collecting money for a project they can’t afford to finish.) Raising crowdfunds does not preclude issuer from raising capital by other means (this allows crowdsourced equity to participate in traditional capital structures alongside (other equity investors, tax credits, collateralized and mezzanine loans, etc.) Background checks are required for issuers and brokers/intermediaries. Crowdfunded shares cannot be resold for 1 year, unless the shareholder is an accredited investor or the issuer. The act does not specify which enterprises can be crowdfunded and which enterprises will be banned, if any.  So that remains to be seen. The act does preempt state “blue-sky” laws, but still allows for state enforcement. Massachusetts has the most representatives that voted against it (5 out of 10). Curious. The initial funding cap was $5 million, but was quickly lowered to $2m/$1m. The Act spells crowdfunding as one word, which will hopefully alleviate the 1 word vs. 2 words vs. hyphenated discrepancies. The bill has met some backlash by politicians claiming that crowdfunding measures would lead to speculative, risky offerings that could translate into heavy losses for small investors.  This argument has merit and should be carefully considered by the Senate and SEC.  It’s ironic that given the potential fraud risk and rampant financial abuses of the past 10 years that the House Republicans voted (in a strict partly-line vote) to kill an amendment that would have required intermediaries to disclose to potential investors how they are compensated.  This issue has plagued charities that outsource fundraising to 3rd party companies that, in turn, take a hefty percentage of the donations they raise.  Perhaps the Senate will re-introduce it. During the Senate Banking Committee’s December 1st hearing on spurring job creation through access to capital, Senate Banking Committee Chairman Tim Johnson said in his opening statement that they will hear from witnesses who will “provide insight on proposals to expand the scope of Regulation A offerings, to permit general solicitation of investors in Regulation D offerings, and to allow individuals to solicit and sell small amounts of stock over the Internet through crowd-funding.” Johnson continued, “They will address the size of a private offering and the amount of money that a crowdfunder should be able to risk without full regulatory protection.  They will discuss the types of markets where these securities should trade. They will also describe the existing investors’ safeguards, such as disclosures about the business and financials, and how current proposals would affect those safeguards.” Summary of H.R. 2930 (PDF): The amendments to Section 4A are as follows: ‘‘(6) transactions involving the offer or sale of securities by an issuer, provided that— ‘‘(A) the aggregate amount sold within the previous 12-month period in reliance upon this exemption is— ‘‘(i) $1,000,000, as such amount is adjusted by the Commission to reflect the annual change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, or less; or ‘‘(ii) if the issuer provides potential investors with audited financial statements, $2,000,000, as such amount is adjusted by the Commission to reflect the annual change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, or less; ‘‘(B) the aggregate amount sold to any investor in reliance on this exemption within the previous 12-month period does not exceed the lesser of ... ‘‘(i) $10,000, as such amount is adjusted by the Commission to reflect the annual change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics; and ... ‘‘(ii) 10 percent of such investor’s annual income; ‘‘(C) in the case of a transaction involving an intermediary between the issuer and the investor, such intermediary complies with the requirements under section 4A(a); and ... ‘‘(D) in the case of a transaction not involving an intermediary between the issuer and the investor, the issuer complies with the requirements under section 4A(b).’’ H.R. 2930 goes on to describe the statutory Requirements to Qualify for Crowdfunding Exemption, for issuers and brokers, which includes cautionary language, background checks, website requirements, etc. http://mobile.reuters.com/article/idUS125555802420111212?irpc=932

99designs Raises $35 Million for Crowdsourced Graphic Design

Authored by Mark Hefflinger on April 29, 2011 - 6:27am.

San Francisco - 99designs, the developer of an online marketplace for crowdsourced graphic design, said on Thursday it has raised $35 million in its first round of funding, led by Accel Partners.

Angel investors Michael Dearing (eBay, Harrison Metal), Dave Goldberg (Survey Monkey), Stewart Butterfield (Flickr, Tiny Speck) and Anthony Casalena (Squarespace) also participated.

San Francisco-based 99designs was founded in Australia in 2008, when co-founders Mark Harbottle and Matt Mickiewicz -- the entrepreneurs behind sitepoint.com, Flippa.com and Learnable.com -- spun it out of the SitePointForums.

The company, which has 26 employees, said it will use the capital for international expansion, platform development, community initiatives like design scholarships and aggressive hiring in both San Francisco and Melbourne.

"Most importantly, this investment goes a long way towards guaranteeing that we will be around long term," wrote Harbottle in the company's blog.

99designs said it currently has over 100,000 designers in 192 countries, and has paid out over $19 million to designers to date.
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Small Business Financing Might Get Easier If SEC Eases Crowdfunding Regulations

Venture & Angel Capital April 27, 2011 By Rieva Lesonsky

Social media has made it cheaper and easier for small business owners to market their companies. Now, social media companies might be making it easier for small businesses to raise capital, too.

Back in January, I posted on Small Business Trends about the rise of crowdfunding as a possible solution for small business owners seeking financing. Closely related to peer-to-peer lending sites, such as Prosper.com, crowdfunding goes one step further. While peer-to-peer lending focuses on individual transactions, crowdfunding uses the Internet to encourage many individual investors to contribute small amounts, adding up to substantial capital.

Today, individual investors are clamoring for a piece of hot social media companies like Facebook and Twitter, but those companies don’t want to go through the complex legal disclosures current securities laws require. As a result of this demand, reports VentureBeat, the Securities and Exchange Commission (SEC) has decided to study the crowdfunding issue. “[The] staff is taking a fresh look at our rules to develop ideas for the Commission about ways to reduce the regulatory burdens on small business capital formation in a manner consistent with investor protection,” says SEC Chairman Mary Schapiro.

Easing restrictions on crowdfunding would let Facebook and Twitter raise money from thousands of investors –and could also benefit small business owners looking to bootstrap their businesses without having to give up control to venture capitalists. For example, if you wanted to raise $100,000, you could sell $100 shares to 1,000 individual investors via Facebook.

Of course, although these individual investors are investing only small amounts of money, there’s still a risk involved–and that’s what the SEC is concerned about. Back in 1992, the SEC allowed small companies to issue shares of up to $1 million to ordinary investors without any going through the usual regulatory hoops, such as full disclosure of the company’s financial information. In 1999, however, that regulation was changed because of concerns about fraud.

A petition that would allow crowdfunding of up to $100,000 has been backed by 150 organizations and individuals. What do you think about the SEC’s move?

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New site helps small businesses crowdsource capital from their communities

By Anneke Jong

Stanford Graduate School of Business classmates create Profounder, an online crowdsourcing tool that helps entrepreneurs raise money online from their friends and family.

(CBS News/ What's Trending) Part of the mission of What's Trending is to bring you to the source of what will be trending in the years to come.

"Summit at Sea" was an invitation-only conference held from April 8 -11, 2011 for entrepreneurs who wanted to share their new ideas with other likeminded individuals. These "Summit Series" meetings have introduced the world to some of most innovative thinkers of today. Founder of Philanthro Productions Anneke Jong was on the cruise with the "Summit at Sea" attendees and discussed their forward-thinking businesses that they hope will change the way we live.

After founding Kiva, an innovative microlending website that helped individuals to invest in entrepreneurs in developing countries, Jessica Jackley turned her sights to supporting innovators back home.

With her Stanford Graduate School of Business classmate Dana Mauriello, Jackley co-founded Profounder, an online crowdfunding platform that gives entrepreneurs the tools to raise investment capital from members of their communities. Instead of just raising capital the usual way, the two introduced Profounder at the DC10 Summit Series in 2010 at a live pitch event and won $50,000 for their idea. Now, they're spreading word about their business -- and helping others -- by sponsoring a live pitch event for up-and-coming businesses at Summit at Sea.

What's Trending: Can you tell me more about your experience with the live pitch event last year?

Mauriello: We had the opportunity to pitch the business idea for Profounder for five minutes to all the attendees (of the DC10 Summit Series), who then got to do some live trading of fantasy stocks for all the businesses being presented. Second Market created an app that enabled everyone in the audience to do live trading of fantasy stocks from their phones. At the end, the business with the highest value stock won $50,000 from the Summit Series team and Presumed Abundance.

Many of the people involved in that experience are now really integral parts of our business. Barry Silbert from Second Market is an investor. Kim [Scheinberg] and Rafe [Furst] from Presumed Abundance are also deeply involved in our business, and we're so thankful for that. It really all gelled around the same time.

Jackley: It was pretty wonderful. I wanted to add that of the $50,000 we got, $10,000 was used today to pay it forward with another pitch event which we hosted. Our goal would be that next year we continue to have a pool of money that is paid forward through the investments that Profounder has made as a company in Summit businesses.

WT: Can you guys talk about paying it forward and, what you did today with this live pitch event?

Mauriello: During this pitch event we wanted to make it more than about just money. We also made it about crowd-sourcing a number of resources from the audience so everyone could participate and get involved, and a variety of different businesses in different stages could also be involved.

Six entrepreneurs got to pitch their business for five minutes, and then we asked for three things: what someone could do to advocate for them, what someone could do to lend their skills and services and how people could actually invest. After all the pitches were done, we had boards up on the wall for each of the six businesses. We had color-coded post-it notes for each category of contribution, and we tallied who had the most support. The winner received $7,500, that was the innovative new URL shortener called bre.ad, and $2,500 went to the runner up, Sole Bicycles.

WT: How did you identify the entrepreneurs who pitched today?

Jackley: What's nice is that it [Summit Series] is a supportive community. There's not really competitiveness as much as there's a mutual desire to see each other succeed... Even more than volunteers, we had recommendations. People would suggest someone else and say, "You should really talk to so-and-so, they're awesome and their product is amazing."

Mauriello: Our whole motivation for doing the event wasn't just about the money. Last year, we saw that you just get so excited about each other's businesses, but it can be hard to find opportunities to get involved in a tangible way. You noticed last year there were auctions and other ways to get involved and raise money for the non-profits, but for the for-profit ideas, there wasn't really that tool for engagement. This is our first iteration of that, which we hope continues.

WT: Profounder is founded on the principle of crowd-sourcing support for new ventures. What do you guys see as the future of that space? How are you hoping to shape it and what's next for Profounder?

Jackley: The statistics are so ridiculous and extreme; I almost start laughing when I say them. 99.9% of all businesses in this country are technically categorized as small businesses. Who's thinking about them, who's serving them? This market is so underserved. Eighty-seven percent of funding to private companies in the U.S. comes from friends and family -- not VCs, not angels, not bank loans -- it's offline, it's scrappy, it's haphazard, it makes Thanksgiving awkward... There aren't good tools to make it any kind of a standardized process. Not only is it offline, but they don't know what to comply with and which papers to file.

So, we decided to put this online and start with the people closest to you in concentric circles to do community-based crowd-funding, different than a wide-open, come-one-come-all marketplace. There's is a huge opportunity to start small and slowly build out. We're trying to provide entrepreneurs with the rules, the laws, and the best technolog, so people can slowly figure out how to fundraise not just through the obvious social networks, but beyond.

WT: At today's live pitch event, you included opportunities for people to invest money, but also to offer their skills, their support and their advocacy. It sounds like you guys want to build that into the functionality of Profounder to not only fundraise, but also to provide connections and support.

Mauriello: We wanted to start with the deepest need where we felt like the least innovation was currently happening, and that was definitely friends and family fundraising. It hadn't been innovated at all since the church collection basket. We wanted to start there and then partner with others in the space who are doing amazing things to provide this whole basket.

But, more and more we see that it isn't just money that is going to make it or break it. Money helps, but they may also need great marketing advice or just having people shop at your place more often can been tremendously valuable. So that's a next step for us.

Former strategy consultant by day and social entrepreneur by night, Anneke Jong is a student at the Stanford Graduate School of Business and a founding partner of Philanthro Productions. She writes and speaks about technology, design, storytelling, and the future of philanthropy. Twitter: @annekejong , Blog: www.annekejong.com.

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Finding Vivian Maier a $100,000 by Kickstarter.com

Tomorrow a Kickstarter.com project entitled "Finding Vivian Maier" - a feature length documentary with a pre-production funding target of $20,000 will have overreached its target with a culm of $104,207 as of this posting. What makes "Finding Vivian Maier" - a feature length documentary film such a winner...Well the answer is in the authenticity of the project and most of all the person the film is ultimately about. Vivian Maier nanny and street photographer who caught history in time and asked for nothing in return will unfold in this feature length documentary and take her humble place in the pantheon of undiscovered talent while alive, only to become globally famous upon her death and with the discovery of her pictures a truly amazing story will finally be told thanks to John Maloof, Anthony Rydzon, and award-winning Danish documentary film maker, Lars Mortensen.



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Crowdfunding Cuts Out (Most Of) The Middlemen Categories: That's What Fans Are For

by WHITNEY BLAIR WYCKOFF NPR

For musician Anthony Cekay, a venture into the world of crowdfunding started with a poem.

A friend challenged Cekay, who double-majored in English and music in college, to write a poem that humanized the devil. From Cekay's poem grew a series of poems; the poems evolved into a melody; and that melody developed into an eight-hour piece of music, "The Spectacular War Museum."

Cekay was invited to present the piece in vignettes at a New York venue, but he wanted to offer an experience that went beyond a traditional performance: He wanted to stream his shows and have a jazz blogger offer a running commentary throughout. The problem was that the venue, while supportive of the project, didn't have the capital he needed to back the whole thing.

So, Cekay turned to the crowdfunding site RocketHub and raised $2,500 to pay for equipment, 20 musicians and tech support.

"We brought in well over 600 people both live and watching the performances recorded," Cekay says. "And that just wouldn't have been possible to do online without the crowdfunding element."


RocketHub is one of several crowdfunding sites burgeoning on the Internet that allow musicians — and other creative-types like filmmakers, writers and painters — to enact a kind of grassroots campaign online to earn money to fund their ideas. It may help musicians to get a career boost or pursue a nontraditional project, but it also allows fans to interact with musicians in a unique way.

For one thing, fans who contribute get a tangible reward from the artists. Cekay says his "fuelers" had a level of involvement that went beyond seeing one of his shows. Depending on how much money someone contributed, that person would receive a highlights DVD, mp3s or a books of poetry that inspired the music.


Isaiah Singer
Anthony Cekay's cousin Christopher Allen, who fueled Cekay's project, with Anthony Cekay and Brain Meece. Allen won a t-shirt in a raffle Cekay held each week to fuel the project.
Yancey Strickler, a co-founder of a crowdfunding site called Kickstarter, says crowdfunding is a business model that lies somewhere between commerce and patronage. Musicians get funding, but fans get something too: They get access.

"People like knowing where something is coming from and what the process has been to get there, and it gives you [as a consumer] an opportunity to be involved in a way that you never would otherwise," Strickler says.

The idea of selling seats to the creative process is nothing new. In fact, Brian Meece, a co-creator of RocketHub, says crowdfunding is a throwback — a throw way back.

"We sometimes say Beethoven-plus-social-media equals crowdfunding," he says. "Because back in Beethoven's day, he had patrons basically give him financial contributions so he could continue his work. And that's how he got paid."

The difference is that instead a handful of patrons funding an artist, crowdfunding has allowed more people to play that role. But despite the success that some artists have seen using crowdfunding, music researchers say it's not a replacement for the traditional record companies.

"I think the crowdfunding aspect is interesting, but shouldn't be overestimated," says Mark Mulligan, vice president and research director of Forrester Research.

There are practical obstacles. Crowdfunding can't do the dirty work that many musicians either can't, or flat-out don't want to do — things that a label might take care of, like marketing, promotions and distribution. In other words, it can help you buy a van for a tour, but it can't book your shows for you.

As Kristin Thomson, a consultant for the Future of Music Coalition, says, marketing through crowdfunding takes a certain kind of creativity — and an already-existing rolodex or fan base. It's difficult trying to build a fan base while you're trying to get people to financially support you, she says.

"Ultimately, a band wants to be out — playing music, writing music, performing," Mulligan says. "They don't want to be marketing and promoting."

Mulligan says that crowdfunding may resonate with certain types of artists, but for the mainstream, it's a means to an end: a stepping stone to a record label — or a life after one.

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Palm Beach County millionaire creates 'crowdfunding' web site to help people in need

At microgiving.com, anyone can raise money for a creative project, worthy cause or to help pay bills 

 

Say you want to release your debut album but need funding for CDs and marketing materials.

Suppose you're unemployed, broke and need a little cash to pay your rent.

Maybe you want to raise money to help end genocide.

There's a website that can help. The brainchild of Palm Beach County multimillionaire John Ferber, the MicroGiving Foundation links donors to creative projects, start-up businesses, worthy causes and people in need.

People who need money post their project, cause or business idea on http://www.microgiving.com along with how much money they need to raise. They typically offer donors a small token in return: a promise to pay it forward, a copy of a CD, a special thank-you note.

And then they wait for the money to roll in.

"We're sleeping and it's raising money," said Boca Raton High School teacher Sharona Kay. Students in her Holocaust class started a nonprofit organization in 2007 that sells colorful triangles in memory of Holocaust victims and uses the money to support global anti-genocide programs.

The group posted a profile and video on MicroGiving a couple of months ago and has raised more than $3,000.

MicroGiving.com is part of a growing phenomenon called crowdfunding, in which people with similar interests pool their money online to support a specific project or cause.

Ferber, who will be one of the featured millionaires on ABC's new reality show "Secret Milionaire" calls it the digital version of passing the hat.

A number of crowdfunding websites have popped up in the recent years. Each specializes in a particular area.

KickStarter, for instance, allows creative types to post their projects — a film, an art exhibit, an invention.

Kiva allows donors to provide microloans to poor people around the world to start businesses. At Donors Choose, people contribute to education projects in needy classrooms.

Ferber's initial idea for MicroGiving was to directly connect donors with people in dire straits.

In the aftermath of Hurricane Katrina, Ferber, 37, donated money to a major U.S. charity but it wasn't satisfying to him, and it wasn't feasible for him to travel to New Orleans.

"I wanted to do more," he said. "I wanted to help people directly."

It was the same frustration he felt when his sister-in-law died of cystic fibrosis. He gave to charity, but he wondered: Where is this money going? Who am I helping?

Then in 2006, Muhammad Yunus won the Nobel Peace Prize. The Bangladeshi economist developed the concept of microfinancing, providing loans to poor entrepreneurs who can't get traditional bank loans.

"I had a eureka of an idea," Ferber said. "Instead of a loan, it's a gift."

He decided to create a website.

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Kickstarter Crowd-funding Hits $1,000,000 A Week

By Ryan Kim - Gigaom - Feb. 18, 2011, 1:00pm PT

Coming up on its two-year-anniversary, Kickstarter co-founder Yancey Strickler is struck by how little the site has changed. Maybe the biggest difference has been just how many artists and creative types have flocked to the crowd-funding site, helping validate a new form of fundraising that is opening the eyes of not only artists but technology leaders.

New York-based Kickstarter, which launched in April 2009, began with the promise of creating an intersection between patronage and commerce, where artists could enlist the help of supporters, who would in turn pledge their money and help validate the artist’s project. What began as a small endeavor has blossomed into a sizable business, one that now raises $1 million a week in pledges and has hit $35 million pledged overall. So far, Kickstarter has helped 5,000 projects get funded with about 2,500 actively fundraising at the moment. About 250 to 300 new proposals come in a day, hoping to appeal to a pool of supporters of more than 600,000 people. Strickler said the concept for Kickstarter, first conceived by co-founder Perry Chen, has proven to be a powerful tool in helping ideas bloom.

“There are thousands of projects we’ve helped that may not have existed otherwise, and we feel incredibly proud of that,” Strickler said. “I’ve personally backed 340 projects, and I’m thrilled to be involved in all of them. The mood here in the office is one of excitement. We have a sense of wonder about the ways people are using Kickstarter.”

The projects are indeed all over the map. One recent project is aimed at building a Robocop statue in Detroit, similar to the Rocky statue in Philadelphia. Another is aimed at replacing use of the N-word in The Adventures of Huckleberry Finn with the word “robot.” Independent game developer Muse Games is using Kickstarter to launch a limited edition of its game called CreaVures. Strickler said they’re all valid ways to draw support and attention around an idea.

The start-up has gotten a lot of press in tech circles for helping launch Diaspora, the open-source, social networking project. More recently, the TikTok and LunaTik iPod nano watch kits broke site records, raising close to a million dollars. But for all its success, technology is in the middle of the pack for Kickstarter categories in terms of number of projects. Leading the way are films by a long shot, followed by music and art. While the site has helped other would-be Diasporas and iPod accessories get off the ground, Strickler said Kickstarter is not meant to be a replacement for traditional VC or angel funding. ”We don’t want people looking to do a Series A; that won’t work too well with us,” he said.

It comes down to the site’s mission in creating discrete projects supporters can rally around, rather than boosting a start-up or business. Kickstarter, in fact, turns down 45 percent of applications because they don’t fit its requirements. Strickler said Kickstarter succeeds because of its simplicity and limits and because it calls for supporters to be rewarded, often in the form of early access or something produced by the project itself. That ensures everyone benefits, and it helps motivate supporters to spread the word. Projects can raise funds for up to 90 days, but the pledges aren’t collected unless the project hits its stated goal. That helps ensure there’s real demand and interest in the project and reduces the risk for backers.

The site, which makes money by taking a 5 percent cut of raised funds, has evolved modestly in its almost two years. One of the more significant changes was the introduction earlier this month of curated pages, which allows organizations, institutions and soon individuals to organize and manage multiple pages of Kickstarter projects. Strickler said it’s another way to highlight various projects on the site, which can only feature eight of them on its homepage. Overall, he sees more opportunities ahead as different groups discover the power of Kickstarter. He said theater and dance now have the highest success rates, in part, because they have strong communities that haven’t had tools like Kickstarter before. And early success stories are fueling even more projects.
“It’s all very organic,” Strickler said. “When you see one theater project make it, then you see 10 more because of the awareness.”
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Crowd Power according to Gene Sharp

We’ve never put politics on our site before. But after listening to Gene Sharp, who you say? On Radio 4 this morning we couldn’t resist but to link his ideology and crowd sourcing? Crowd Power has toppled the dictator and is spreading like a hacker’s virus through the Middle East. The power of the crowd from Gandhi, to Tunisia and now to Egypt, Libya and Bahrain has used Gene Sharp’s writings as a blueprint to topple absolute power that corrupts absolutely. If ever there was a training manual on how to topple a regime Gene Sharp has written it. What makes it interesting is that the crowd has demonstrated peacefully and you can’t silence that only with death and violence and in the end the dictator loses power against it. There is crowd sourcing, crowd funding and now crowd changing. Changing the political landscape of the Middle East from within…

BOSTON — Halfway around the world from Tahrir Square in Cairo, Egypt, a U.S. intellectual shuffles about his cluttered brick row house in a working-class Boston neighborhood. His name is Gene Sharp. Stoop-shouldered and white-haired at 83, he grows orchids, has yet to master the Internet and hardly seems like a dangerous man.

But for the world's despots, his ideas can be fatal.

Few Americans have heard of Sharp. But for decades, his practical writings on nonviolent revolution — most notably "From Dictatorship to Democracy," a 93-page guide to toppling autocrats, available for download in 24 languages — have inspired dissidents around the world, including in Myanmar, Bosnia, Estonia and Zimbabwe, and now Tunisia and Egypt.

When Egypt's April 6 Youth Movement was struggling to recover from a failed dissident effort in 2005, its leaders tossed around "crazy ideas" about bringing down government, said Ahmed Maher, a leading strategist. They stumbled on Sharp while examining the Serbian movement Otpor, which he had influenced.

When the nonpartisan International Center on Nonviolent Conflict, which trains democracy activists, slipped into Cairo several years ago to conduct a workshop, among the papers it distributed was Sharp's "198 Methods of Nonviolent Action," a list of tactics that includes hunger strikes, "protest disrobing" and "disclosing identities of secret agents."
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Too small to bag a bulk discount? Join the 'crowdsourcing' clubs

By JO THORNHILL
Last updated at 9:24 PM on 19th February 2011

As food and fuel prices continue to soar, now is a great time to club together to get the best deals.

From forming community-based co-operatives to using cutting-edge websites offering special rates on the cost of utilities, a joint approach can boost spending power in these tough times.
Financial Mail looks at the best ways to team up.

Online Collectives

Trainee barrister Emma Knight signed up to incahoot.com a month ago but she is already telling her friends to join. Incahoot is one of a new breed of 'collective' or 'crowdsourcing' websites that use bulk buying to negotiate special rates and discounted deals.
It is free to join and Incahoot currently has a handful of deals on offer - these include broadband, gas and electricity, iPhone handsets and mobile phone packages.

Emma, 24, who lives with husband, Matthew, 26, a research executive, in Wandsworth, south London, went to Incahoot on the recommendation of a friend as she wanted a better mobile phone deal with O2. A simple switch saved her £360.

'I've been with O2 for six years and was spending £20 a month for which I got 600 free minutes and 1,000 free texts each month,' says Emma. 'With the Incahoot deal I got a free smartphone and for £20 a month I now get 900 free minutes per month and 5,000 free texts.

'The same deal with O2 on the High Street would cost me £40 per month - so I've made a big monthly saving. The cherry on the cake was the £120 cashback for doing the deal.'
Emma is so impressed with Incahoot she says she will switch to the broadband and energy deals once her current contracts come to an end. For each friend she recommends who signs up to a deal, she will also get a £10 reward.

'I've made a note in my diary to switch using Incahoot once my current contracts expire as I don't want to have to pay a penalty,' says Emma. 'Incahoot will email an alert.'
Another collective website - groupon.co.uk - claims to be able to negotiate discounts of 50 to 90 per cent on deals with popular retailers as well as local businesses.
You register for free and can check out the national and local deals in your area - from discounts on restaurant meals and cinema seats to cut-price spa treatments.

Co-operatives

The co-operative model is becoming more fashionable in this age of austerity, but it is certainly not new. The first co-op was set up in 1844 by workers in Rochdale, Lancashire, angry that food prices were too high and that the shops were owned by the mill owners.
The workers began their movement by offering staple products such as butter and sugar in their own shop, banding together to negotiate the best wholesale prices for members.
Today, as more households are seeing their budgets stretched, the idea of banding together with others in the local community to maximise buying power has never been more relevant.
Ed Mayo, secretary general of trade association Co-operatives UK, says there are more than 400 buying cooperatives.

'Our research shows half of consumers are planning to save money by co-operating with others this year,' he says. 'Co-operatives have always had a good reputation for being ethical, sustainable and member-controlled, but now the cost-saving aspects are becoming increasingly important.'

The Government will launch a consumer White Paper next month that will include proposals to encourage everyone to join local co-operatives, for example to buy groceries.
There are a wide range of cooperative businesses, but they all have basic principles in common - they are owned and run by members and profits are used for the benefit of members.
Joanna MacDouall helps to run the True Food Community Co-operative in Reading, Berkshire. The group has grown out of a small buying club set up by several independent wholefood shop owners who were forced to close their businesses following the building of a large shopping centre in the town 12 years ago.

True Food is a similar concept to the People's Supermarket, based in Holborn, central London, which features in a Channel 4 programme on Sunday evenings. True Food initially ran markets every other weekend at local community centres, with the focus on organic food.
Today, the co-operative has more than 200 members and tens of thousands of customers flock to its Grove Road shop as well as the regular markets.
Membership is £10 a year, but that includes a £20 shopping voucher as well as various special offers and discounts.

Although the ethical and healthy living aspects of the co-operative are what tend to attract people initially, Joanna believes there are significant savings to be made. 'There is often a perception we'll be more expensive because our goods are organic,' she says.
'But we're usually buying direct from suppliers, cutting out wholesalers, so we can really reduce costs and bargain hard for our members.
'As prices are soaring in the supermarkets, many of our shoppers are pleasantly surprised at our prices, particularly for our fruit and veg.'

Joanna also says most of True Foods' goods are sold loose, so shoppers can buy as much or as little as they want.

The aim is to minimise waste, but this can also cut bills. It is the antithesis of the supermarkets' 'buy one get one free' offers, which encourage consumers to pay more for goods they often don't want. 'Sometimes you might only want one apple or a small amount of cereals or pulses,' says Joanna. 'At our shop you can do that. You don't have to pay for more than you need.'

Joanna, the chief buyer for the group, also runs the shop with manager Alex Trott and markets manager Chris Aldridge - one of the founders. In total there are four paid members of staff, but the cooperative also relies on volunteers.

'We are so much more than a buying club now,' says Joanna. 'As more consumers become disillusioned with the big supermarkets and others look to make their household budget go further, this is when co-operatives are filling a vital gap in the market.'
To find a food co-operative in your area, visit foodcoops.org. For more on setting up a co-operative, visit uk.coop.

Investment clubs

Being a member of a club has benefits when it comes to investment as it means you can tap into the ideas of other investors.

Investment clubs can be set up by families, work colleagues and friends up to a legal maximum of 20 people.

The aim is to pool cash and ideas and then invest in the stock market. There should also be less risk as the larger pot of pooled cash means that investments can be spread across a wider variety of shares.
Clubs usually meet regularly, typically once a month, to discuss investment strategies. Members all pay the same amount into a collective fund, for example £25 to £30 a month. Ideas are then discussed and members share their opinions and research on particular listed companies.
A treasurer is nominated to look after the buying and selling of shares and a secretary keeps the minutes of meetings. There is more information on setting up and running an investment club at proshareclubs.co.uk. It also has a manual for £25.

House buying

With the average house price now six times the average annual wage, it is not surprising that millions of buyers are shut out of the property market. And those on their own - without the extra income of a spouse or partner - face an even greater struggle to get on the ladder.
Joining with friends or a family member to buy property has become increasingly common since the property boom. It can give those fed up with wasting cash on rent that all-important first foot on the ladder.

Many banks and building societies will lend mortgages to groups of friends, typically up to four unrelated people. David Hollingworth, mortgage expert at broker London & Country in Bath, Somerset, says that Britannia - now part of Co-operative Financial Services - NatWest, HSBC and Santander are probably the best known for this.

'Lenders will usually base the mortgage amount on the two biggest salaries where there are more than two friends involved in the purchase,' says Hollingworth.

'But if three or four people are named on the mortgage application they will all be jointly and severally liable for repayments. This means if one person is unable to pay, for example due to job loss, the other applicants will still be expected to meet the full monthly payment.'
Hollingworth advises that friends draw up contracts to avoid disputes at a later date, for example if one person in the group wants to move out or sell.

'It is a good idea to know in advance what will happen when circumstances change,' he says. 'It can avoid problems and fallouts further down the line.'

Best friends James Bertioli, 23, and Stefan Canavan, 24, have just bought their first property - a two-bedroom flat in Balham, south London. The two management consultants paid £320,000 for the property, putting down a 20 per cent deposit, and both agree it would have been impossible to buy on their own.

They have taken out a lifetime tracker loan from ING Direct with an interest rate at 3.04 percentage points above the Bank of England base rate, which is 0.5 per cent at the moment. It means their starting pay rate is 3.54 per cent and their monthly repayments are £1,300.
In a further display of how clubbing together can work, a family friend has lent the pair cash to renovate the flat.

'The property needs some work, but we hope we can add value that way,' says James.

'If it is successful, our aim is to try to sell quickly at a profit and buy somewhere else, with an eye on another development that could make us money.'
To Learn More Click Here

Say Goodbye to the Permission Business!

Soon you won't need permission to make films, set up TV channels, publish books or try out inventions. No wonder the old industries are scared

by Adrian Hon
Adrian Hon is the Founder and Chief Creative at Six to Start, an online games company; he originally trained as a neuroscientist at Cambridge and Oxford. He takes a strong interest in the controversies surrounding intellectual copyright.

One of the most annoying things in life is asking for permission: permission to build an extension, permission to volunteer at a school, permission to start a business. It’s always irritating to imagine some distant bureaucrat with little interest or understanding of your life in control of your fate.

Almost every sphere of life and work – from education to science to media to retail – involves us asking for permission every time we want make or do anything, whether it’s to start a project, raise funding or get access to the market. The ‘permission system’ suffocates creativity, but it’s so pervasive that we can hardly imagine a different world. Yet it’s finally being dismantled, brick by brick, by the internet, and we’re all going to benefit.

Imagine you’re a bright young filmmaker with a brilliant idea for a new documentary. When you approach a broadcaster, you find that they’re only concentrating on five subject areas this year, so you change your idea accordingly. After some emails, you finally get to pitch your idea to a commissioner who tells you that they’re already making a similar show, so you’ll either have to wait a year or change it drastically. You opt to change it, trying to ignore the feeling that this is a mistake.

Now the commissioner likes your idea, but they’ll have to check what channel controller thinks. A week passes, and unfortunately it seems that your idea doesn’t fit within the channel’s strategic priorities, but you should definitely try again.

After a few rounds of this, you become good at guessing what commissioners will like, and following some dedicated networking, you discover what the channel priorities really are. You learn how to craft ideas that will have the right mix of buzz and relevancy and risk, and you’re rewarded with commissions. In short, you’ve become an expert at creating mediocre ideas to order.

I don’t mean to be hard on the TV industry. The few commissioners that I know are all good people who want to do a good job. But when you’re bombarded by dozens of ideas a week and you always need to get permission from your bosses, it’s safer to stick with tried and tested idea than taking a risk – after all, they don’t want to get fired.

The same story applies to every other industry where the cost of production has been high and the amount of ’shelf space’ has been limited, whether for books or clothes or computer programmes. Back in the days where it used to cost a lot more to print a book or manufacture a new product and you could only fit so many into a shop, it made sense to be cautious and ensure that investments were made carefully; and since there were fewer people coming up with ideas, the ‘permission bottlenecks’ were also less of a problem.

But the world has changed. With new technology, the cost of producing consumer goods has plummeted; with the internet, we have unlimited shelf space; and with better education, we have billions of people who are capable of coming up with good ideas.

TECHNOLOGY

Almost every week now, we hear about some student who’s created a hit movie or iPhone app from their bedrooms. It’s hardly surprising – cutting-edge computers, cameras, and software have all become affordable (and just as importantly, accessible) to millions. When you can produce an entire radio show or game for free, you don’t need anyone’s investment or permission, giving you complete creative freedom; what’s more, initiatives like Creative Commons make it possible to ‘automatically’ licence music, photos, and artworks for your project.

It’s not stopping with media, either. The next revolution in production is likely to come from 3D printing, a technology that allows people to ‘print’ successive layers of plastics or metal to create fantastically complex and intricate 3D shapes. Thousands of people are already taking advantage of 3D printing services like Shapeways to create mechanical parts, prototypes, sculptures, and toys, at a cost and speed that would have
been simply impossible just five years ago. Best of all, you don’t need permission to print your new 3D toy; companies are perfectly happy to just take your money.

FUNDING

Of course, some projects will still need serious investment, like producing a major movie or building custom cars, and the more money you need, the harder it gets to find someone who’ll share your vision and give you ‘permission’.

Once again, though, the internet is eliminating this bottleneck. Crowdfunding sites like Kickstarter and Indiegogo make it possible for
creators to solicit pledges (a cross between pre-sales and donations) from anyone with a computer and a credit card. As long as there are a few dozen or hundred people in the entire world who like your idea, you can raise thousands of pounds, opening the door to much more niche or original or risky projects; and if your idea is popular, you can raise hundreds of thousands.
I’ve just started a project on Kickstarter myself, to help print a book I’m writing called A History of the Future in 100 Objects (inspired by the excellent Radio 4 show). In just four days, I raised my target of $2500 and donations are still coming in, mostly from people I’ve never met before. I didn’t need anyone’s permission to start that project – I just did it.

Displaying products is stores is no longer crucial

ACCESS TO MARKET

Making your product is only half of the challenge – getting access to the marketplace is just as important. Every aspiring inventor knows how difficult it is to convince retailers to display your product, even if you offer it for practically free. It didn’t matter how good your product was – you still needed permission from a buyer to sell it.

But now, Amazon and Apple have completely upended the system; the internet provides unlimited shelf space, making it possible to stock and display as many products as people want to sell. Why bother holding people up by making them ask for permission?

Some industries have proved more resistant; for example, people still understandably prefer to buy clothes and fashion accessories in person, leaving traditional retailers with outsize power. Yet even then, marketplaces like Etsy that sell handmade items (with over $300 million in sales last year) have proved that change is possible.

TELEVISION

The TV industry is an interesting case, particularly in the UK where a handful of broadcasters like the BBC and ITV not only commission and fund the biggest programmes but also control the means of distribution. As a result, you can’t get anywhere without asking a whole host of commissioners and executives for permission. It’s a lot of power for only a few people to have, especially when they claim to speak for the public.

That’s why YouView, the ‘next-generation Freeview’, is so important to the broadcasters that fund it (BBC, ITV, C4, and Five); they’re absolutely terrified of a future where people turn on their Google or Apple TV and, instead of being welcomed by BBC1, they’re shown video content from YouTube and Netflix that could have been made by anyone, anywhere. Filmmakers won’t need broadcasters’ permission to reach an audience – and broadcasters will have lost control.
YouView is the one thing that will ensure the first five channels on TV will still belong to the old broadcasters, at least for a few more precious years. Unfortunately for them, YouView’s launch has slipped into 2012 (hardly surprising given the terrible track record of British broadcasters’ forays into technology).

The defence of the ‘permission system’ lies in the belief that the best way of allocating limited resources is by getting experts to
figure out what the market wants, having them identify the best ideas, and then doling out money accordingly.

But not only is technology rendering this system superfluous; the plain fact is that the system never worked well in the first place. Publishers and commissioners like to imagine that their skills and experience are the only way to unearth the diamonds in the rough, conveniently ignoring that fact that Harry Potter was rejected by twelve publishing houses before Bloomsbury picked it up, and that the majority of what’s printed and on TV is mediocre.

Let’s face it, no-one can really predict what the market will want. JK Rowling didn’t think “I know what, wizards and boarding schools are fashionable!” before she wrote the fastest selling books in history; Philip Pullman didn’t worry about whether a subtle, complex story about sin and free will would work for children. But what publishers and commissioners can do is echo buzzwords and fund me-too products like reality shows and action blockbusters, which succeed largely thanks to expensive marketing and a lack of alternatives. Thankfully, the success of films like The King’s Speech and Inception shows that audiences are not quite as stupid as we might imagine.

So, if you can’t reliably predict success, what do you do? A recent study of highly successful entrepreneurs by Saras Sarasvathy suggests that making a product and putting it out into the market as soon as possible is the best strategy; when asked about what kind of market research they would conduct for a hypothetical product, one entrepreneur said:

“OK, I need to know which of their various groups of students, trainees, and individuals would be most interested so I can target the audience a little bit more. What other information… I’ve never done consumer marketing, so I don’t really know. I think probably… I think mostly I’d just try to… I would… I wouldn’t do all this, actually. I’d just go sell it. I don’t believe in market research. Somebody once told me the only thing you need is a customer. Instead of asking all the questions, I’d try and make some sales. I’d learn a lot, you know: which people, what were the obstacles, what were the questions, which prices work better. Even before I started production. So my market research would actually be hands-on actual selling.”

That’s real capitalism. What we have right now isn’t capitalism or a free market, it’s an unholy mashup of a (poorly) planned economy and an oligopoly, and it even extends to completely different sectors like academic research, where you often have to abase yourself before trend-driven, risk-averse, time-poor funding committees.

With every extra person who can say ‘no’ to an idea, the more likely it is that mediocrity will prevail. That’s the problem when companies and governments become too large – there are too many people whose job it is to simply say ‘no’. The notable exceptions are publishers like Amazon and Apple, who have learned that it pays to be permissive.

Navigating the obstacle course of everyone who can say ‘no’ has a truly chilling effect on creativity. You start doubting your ideas,
and you enter a tiring game of guessing what the gatekeepers want rather than what you think or hope will be successfully. You stop caring. As a person who designs games and writes for a living, I find it’s hard to overstate exactly how liberating it is to be freed from the permission system.

The brave new ‘permissive world’ isn’t perfect, though. Freedom can be overwhelming, and creatives will be exposed to more competition (such as the 300,000 iPhone apps). But these downsides are more than balanced out by the fact that you can take on more creative risk; and that when the middlemen are taken out of the equation, you waste less time and earn more per sale, making niche ideas more viable. You don’t need a million buyers to be successful – just a thousand true fans can be enough. Your success no longer rests on the whims of a few ‘experts’.
A permissive world will let us pursue projects we truly care about, and that can only mean good things for the power and quality of our work. Once upon a time, any artist who bucked the system and demanded creative control over their work ended up on a one-way trip into penury. No longer.

This isn’t the first time that the permission system has changed. In the 19th century, the Academie des Beaux-Arts in Paris dominated the world of art; to succeed, artists had to toe the line and stick to traditional, approved painting styles. It was only when Monet, Renoir, Pissaro and Sisley scandalously created a new, independent association to exhibit their works directly to the public that Impressionism – and arguably, modern art as a whole – could truly flower.
People, throughout all the ages, have chafed against the need to gain permission to create what they want. When we’re young, we’re amazed and furious at how unfair and arbritrary this is, but as we grow older, we internalise the rules and start censoring our own ideas.
Ultimately, we become part of the permission system. We begin to say ‘no’ to others because that’s what we grew up with, and that’s the way the world works. For many, it’s profoundly frightening to think that one day, they won’t be able to say ‘no’ – what will they do? What will happen to their jobs?

But there is a different way. We can give people freedom, we can save money and time, and we can unlock a wealth of creativity, just by saying one simple word: ‘yes’.

To Learn More Click Here

Victors & Spoils launches new Corporate Video

From the website Victors&Spoils.com a new corporate video explaining their process...


Victors & Spoils from Victors & Spoils on Vimeo.

Is Crowdfunding Working? Here’s What We Know

By Robert Andrews @robertandrews Feb 8, 2011 10:28 AM ET

Crowdfunding’s growing up.

On one such site, 13,512 people recently raised nearly $1 million for a Chicago designer. And fan-funding sites are now bankrolling albums from established music acts, not just dodgy indie bands.

But just how much are these services making for members, and for themselves?

I’ve spent the last few weeks collecting data on the sector, by talking with all the main crowdfunding platforms…

My conclusion: an estimated $80 million has been pledged through these sites, by fewer than a million supporters. But not everyone gets funded, and returns for the sites themselves appear modest.

Leader of the pack
New York’s Kickstarter is kicking it amongst the head of the pack. Since it started, it’s taken pledges worth $30 million for over 12,000 hopeful projects.

Such sites typically make their money by taking a commission of the amounts they pay projects - but most sites only pay money if projects’ pledges meet a pre-specified target amount.

In the case of Kickstarter, which takes five percent, about 45 percent of submitted projects hit their target - so the amount Kickstarter has made for itself is five percent of something far less than $30 million, and probably of about $8 million.

Growing scale
Still, the overheads required by such sites are low - essentially, web hosting and growing notoriety within creative communities.

Kickstarter is now on a perpetual growth curve - the nearly $1 million its users raised last month for the designer of an iPod Nano wrist-watch strap is one of its biggest hits to date.

It may be the birth of a new kind of funding, a more direct relationship between producer and consumer, without the need for major backers like investors or record labels.

Fixing the system?
In music, which has long been enamoured with the fan-funding model, recognisable names like Cornershop, The Subways, Gang Of Four and Funeral For A Friend are amongst the big acts employing the model through PledgeMusic. Marillion and Idlewild have done it themselves independently. Public Enemy financed its last effort through Sellaband.

It may be no coincidence that, as the incumbent entertainment industry contracts and breaks down, out-of-contract major-label artists are increasingly turning to such platforms...

“We’ve been witnessing first hand the struggles of the independent artist,” says Jamie Lokoff of FeedTheMuse.net, an artist-funding site started out of Lokoff’s Philadelphia recording studio, itself bootstrapped using borrowed cash in May 2009. “The music industry is in such a state of disarray, with no real concrete answer, that we felt it important to at least get our hat in the ring, to be part of the solution.”

After years of engaging with fans through social media and gathering their email addresses, artists are increasingly betting they have a readymade constituency of potential financiers.

Says SonicAngel founder Bart Becks: “Our goal is to launch three artists per quarter per country. We will continue to involve fans in every step.”

New entrants are still coming
Though the market is headed by these popular platforms, that’s not stopping smaller crowdfunding sites from emerging to offer their own spin, nor expanding in to new countries.

One such site, 8bitfunding, launched in January, to fund independent game developers specifically. Ulule, which launched from Paris in October, is already planning a Portugal launch, despite not yet taking any commission.

But newcomers should be warned. The popularity of the likes of Kickstarter and IndieGoGo may suggest room in the space for smaller niche platforms, which may well go on to support many more small creatives - but it’s not yet clear that even crowdfunding’s biggest exponents are yet successful businesses in their own right.

To Learn More Click Here

Three Ways To Crowd fund Big Ideas With Lean Pockets

Erica Nicole, YFS Magazine | Feb. 4, 2011, 4:44 PM

The cost of doing business isn’t cheap. One of the primary challenges for entrepreneurs is the effective management of cash flow.

Small businesses generally lack the asset requirements necessary to qualify for bank loans. It is no surprise that small business lending isn’t what it used to be.

Big Ideas and Lean Pockets
Small businesses fail every year due to the mismanagement and lack of cash flow. While every entrepreneur has heard the adage that “Cash is King,” obtaining a quick injection of cash can be a daunting task. So, when I started my first company, I asked, “How can I master my funding without its mastering me?” Peer-to-peer lending, better known as crowdfunding, was a, seemingly, good answer. Alongside bootstrapping, crowdfunding is the perfect resource for fledgling entrepreneurs with big ideas and lean pockets.

Reward your Biggest Fans
The crowd is every entrepreneur’s biggest fan. People want to be a part of something bigger than themselves, and if you add profit or rewards to the mix, then you’re onto something. Crowdfunding enables your peers to minimize their risk and invest in business ventures they believe in. Gone are the days of pitching hundreds of venture capitalists or hoping that your local banker loves your widget idea as much as you do. One of the main reasons crowdfunding has become increasingly popular is that unlike working with traditional investors, you keep 100% ownership of your idea. Crowdfunding websites represent an excellent source of capital and offer a great platform to test market ideas and gauge consumer interest.

Focus and Fund
So, you’ve got a great project and need to fund it. What’s next? Create an account at one or more of the following crowdfunding websites. The catch is, make sure you are definitive about your project parameters. Projects such as “I am launching a clothing line,” won’t fly. The more precise the project, the better. Also, make conservative funding estimates (e.g. Do your homework). Projects that don’t reach full funding don’t get funded. Ultimately, your goal is to drive accountability with a definite start and end. While each crowdfunding platform varies in terms of allowable projects and pitches, they all represent a great starting point to help you focus your idea and fund your dream. Here are 3 websites that will get you on your way:

Profounder.com: Get started by following their step-by-step process to outline your pitch. Now it’s time to get creative and develop your investment terms. Profounder then creates the legally compliant documents and an individual website for your venture. Now, you can share your idea with the world; seek pledges and meet your fundraising goal.

Kickstarter.com: While causes and charities are not welcomed, creative and genius project ideas are. Post your project, set your deadline and capitalize on your network. If you’re looking for a hybrid of e-commerce and patronage support where you won’t have to pay back funds – ever, then Kickstarter.com is the best place to kick-start your project into gear.

Rockethub.com: Come up with a fantastic idea and sign-up for an account at RocketHub.com. Post your new project by following their 5-step process. Offer tangible rewards and kickbacks instead of monetary incentives and fuel your project within a predetermined time limit. Share it with friends, family and associates and spread the good news.
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Zuckerberg's Facebook Page Hacked

Perhaps it is not that Zuckerberg's page was hacked, but what the hacker wrote...


(CNN) -- Facebook founder Mark Zuckerberg's fan page was hacked Tuesday -- a high-profile breach on a site that constantly faces scrutiny about its handling of its members' private data.

The message that appeared on Zuckerberg's page under his name read: "Let the hacking begin: If Facebook needs money, instead of going to the banks, why doesn't Facebook let its users invest in Facebook in a social way? "Why not transform Facebook into a 'social business' the way Nobel Prize winner Muhammad Yunus described it?" the message continued, referring to the founder of the Grameen Bank which has transformed millions of lives by extending micro-loans to poor people.

Zuckerberg's fan page has more than three million followers and is probably managed by media assistants to the social networking magnate, according to cyber-security experts.

The message received more than 1,800 "likes" before it was removed from the page. Facebook's representatives have not returned calls seeking comment.


So the hacker was complaining that, why has Facebook not crowd funded its members especially when they have 600,000,000 of them. Why indeed?

Qwiki.com launches with input from the crowd.

Is this the new Hal?

Qwiki is out of private testing and now available to the public. Haven't heard of them? Well, then, you haven't been reading TechCrunch lately. Qwiki is the winner of the most recent TechCrunch Disrupt contest and is using video in some pretty interesting ways. Now that the service is public, I thought I'd take it for a spin and let you know what's going on.
Qwiki isn't the easiest service to explain, as evidenced by their own "About Us" description:

How to 'Crowdfund' Your American Dream

By STEVE STRAUSS

Politicians do it, and now more and more people are finding money to start their businesses thanks to small contributions from supporters.


Back in 1992, former and current California Gov. Jerry Brown ran for president against, among others, Bill Clinton. As Clinton emerged as the favorite, endorsements -- and more importantly, money -- started to flow his way. And as a result, the other candidates in the field began to drop out as votes and money dried up.

But not Jerry Brown. Brown had hit upon a then-unique fundraising idea in a pre-Internet day that kept his quixotic campaign alive: He created an 800 telephone number and asked people to call in and donate small sums to his campaign. No more than $100. It turned out that his supporters were more than happy to help him if it didn't cost a lot and was easy to do.
He didn't win, but Jerry Brown was one of the first to 'crowdfund' his campaign.

A more recent example from the business world: Filmmaker Kieran Masterton used crowdfunding to fund his startup, raising more than $12,000 in the process. And maybe even better, like Jerry Brown, Masterton did not have to pay people back with cash, since people who donate to crowdfunding projects expect to be repaid in ways other than money.

Pretty nifty, eh?

Crowdfunding is a process whereby people with projects or business ideas ask the crowd to donate to the cause in exchange for some sort of reward. Typically the reward has something to do with the businesses or project. In Masterson's case, he was starting a website that would distribute the work of independent filmmakers, so he asked them for $100 each – in exchange for getting listed on the website. It worked, big time.

Another example: SellaBand.com is a crowdfunding platform which offers bands something it calls "fan funding." Let's say an indie band has a new tour or album it wants to produce and needs funding for the project. The band would list it on the Sellaband website, and in exchange for donations, would "repay" participants with "free downloads... exclusive CDs, T-shirts, free lunches etc."

Not surprisingly, crowdfunding -- an idea that began as a way for various artists to fund their projects, has morphed into a tool for entrepreneurs to fund their own dreams. As Time puts it, "Politicians do it. Charities too. And now for-profit entrepreneurs are tapping the Internet to get small amounts of money from lots and lots of supporters. One part social networking and one part capital accumulation, crowdfunding websites seek to harness the enthusiasm -- and pocket money --o f virtual strangers."

If this makes sense to you and looks like a way for you to get some funding for your own project, here are some sites you will want to check out:

Kickstarter.com. Listing a project on Kickstarter is free, although KickStarter keeps 5 percent of all money raised, as well as a small portion of all credit-card processing fees.

One interesting thing about Kickstarter is that projects must raise 100 percent of their funding goal, or they receive nothing. Here's why that's a good thing: Let's say that you are trying to raise $10,000 to self-publish a book and that you offer credits in the book in exchange for investments at $50 a pop. If you only raise $5,000, it would not be a very good deal for all of those people who gave you $50, since the book would never get published. So it's 100 percent or nothing at Kickstarter.

IndieGoGo. Similar to Kickstarter, IndieGoGo is a "collaborative way to fund ideas." The difference is that it does not does not require 100 percent funding, although if you do not raise the full amount, they charge you 9 percent as opposed to 4 percent.

Here is one last nice benefit about using crowdfunding to fund your dream: Because it gets people interested in your venture early on, those folks become (literally) invested in your success and thus become your cheerleaders.

Starting a business with a built-in audience and getting funding without having to repay it in cash? Sweet.
To Learn More Click Here

Groupon Now Valued at 15 Billion Dollars

By BRETT LIPTON Times Square Chronicles

Internet coupon new comer Groupon, is now slated to be worth $15,000,000,000, that is BILLION with a 'B'.

Rumors have been buzzing about Groupon recently, reporting that the online Coupon Deal Venue, headed by CEO Andrew Mason, may be planning to go public with an IPO in as early as Spring of 2011. If you are not familiar with Groupon.com, the new internet giant uses the following business model:

Vendor contacts Groupon with a deal, good for 1 day.

Vendor applies a minimum number of people that need to take the deal for everyone to be able to cash in on it ergo "Group"

Vendor makes a discount offer offer i.e. 20% off a purchase, $50.00 discount..., ergo "Coupon"

Result = GROUPON

If the minimum takers is reached: Deal On - for everyone!

If the minimum takers is not reached: Deal Off - for everyone!

Groupon was started a scant 3 years ago in 2008 and currently the Chicago based company houses approximately 120 employees. In this short time they have achieved an audience of approximately 15 million daily viewers to the site. According to internet website rankings by Quantcast, they are the 198th most trafficked site in the US. Amazon's Alexa ranks them at 87 in the US and 401st in the world. Interestingly, it is alleged that only a few months ago internet search and advertising giant Google offered them $6 billion only a couple of months ago, effectively almost tripling the value of Groupon in less than a year.

According to Groupon they just hit a online coupon milestone, saving their users over $1 Billion in shopping sprees. The site popularity and investment lure can be made quite apparent by summing it up this way: In August 2011 a single Groupon Gap deal offered its users $50.00 worth of shopping for $25.00 generated 445,000 takers and landed the company $11,000,000 in one take. The demand was so high that the deal was being taken at a rate of 534 per minute. As a result Groupon.com's servers suffered and the site experienced technical issues from the bandwidth draw.

Here’s Groupon CEO Andrew Mason, the “quirky personality” behind Groupon's group couponing, in an interview for Crain’s “40 Under 40: 2009.”

To Learn More Click Here

Five Financing Trends for 2011

By Eileen P. Gunn at Entrepreneur.com
Mon Dec 27, 2010 7:04pm EST

When it comes to funding options for startups, new ideas seem to come along every season. Some may be old ideas dressed up in a new way, while a few may be something we really haven't seen before. It isn't certain which ones will become the new black of small business and which will disappear with this year’s hemlines. But here are five financing trends for 2011 that could have an impact on your company.

1. Crowdfunding

Kickstarter popularized the idea of crowdfunding, which is when a large group of people help fund a project or business through a cluster of small donations. Kickstarter began as a new way to help artists get projects off the ground. In return for funding, donors receive goods or services, or even just a well-crafted thank-you, in lieu of equity or interest payments. Now the same idea is spreading to business ventures. Diaspora, a tech company that wants to build a social network to rival Facebook got more than $200,000 in seed money from a Kickstarter campaign

Of course, the Securities and Exchange Commission frowns on companies offering equity to the public without filing with the government to do so, so when it comes to crowdfunding backers always get something other than equity. Take Catwalk Genius. Its members fund fledgling fashion designers and in return get a share of the revenue generated by the designer’s clothing lines. Then, there's Indiegogo, which leans toward creative and tech business ventures, and peerbackers.com, a community of people specifically looking to support entrepreneurs, which are similar to Kickstarter in that they encourage preselling products as a way to raise funds. Look for more niche-oriented crowdfunding sites in 2011.

2. Microlending

The idea of offering very small loans, even just $100, has its roots in helping women in underdeveloped countries start small business ventures. But as the recession tightened credit offerings, the popularity of microlending has extended to the U.S. -- especially as aspiring entrepreneurs are starting ventures with far less than the $50,000 business loan threshold common at many banks. Not-for-profit Accion is the largest organization putting that idea into action with loans that start at $500 and average a little more than $5,000. You can also research other microlending programs around the U.S. through the Association for Enterprise Opportunity's searchable database.

3. Credit Unions

These cooperative financial institutions are among the most active in making smaller loans to entrepreneurs and have only gotten busier in recent years, according to the National Credit Union Administration (NCUA). Its figures show credit unions made more than $33 billion worth of business loans in 2009, up from $12 billion in 2004. They have relatively low default rates and terms that are often better than traditional banks, according to the NCUA and Federal Deposit Insurance Corp. (FDIC). Credit unions also can be a resource for aspiring business owners whose credit score might not pass muster with other banks. The catch? You will likely have to become a member of the credit union to borrow from it.

4. Bootstrapping

If you’ve trimmed your start-up costs down to a few hundred or a couple thousand dollars, why not skip the loan altogether and bootstrap your business? When you tap personal savings, get vendors to front start-up supplies for delayed payment terms, hit up friends and relatives, or use one money-making venture to fund another, then you’re bootstrapping. It’s a good way to test an idea and make sure it has legs before investing heavily in a new venture. Think of it as the business equivalent of going retro. It’s an idea that has been around forever, but is making a big comeback as people who have lost their jobs in the recession increasingly look to start a small business as an alternative to traditional employment.

5. The Slow Money Movement

Woody Tasch, longtime chairman of Investors' Circle, a hugely successful angel network for socially responsible companies, is spearheading this fledgling movement. Its ambitious aim is “a million Americans investing 1% of their assets in local food systems within a decade."

The idea is to help entrepreneurs who buy, use and sell local food or who engage in sustainable agriculture get seed funding from people they know in their communities. The terms are set on a deal-by-deal basis, which can range from a loan to equity to a credit extension. Backers are encouraged to invest in ventures that won’t just turn quick profits but will benefit their communities over the long term by creating jobs, supporting other local businesses and the fostering local food chain.

It’s ambitious and will likely evolve as it goes. But in its early days so was Investors' Circle, which has facilitated over $134 million in investments in more than 200 companies since 1992. We’re interested to see how Tasch will sustain this movement.

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