Sunday, December 8, 2013

Why Crowd Funding Rocks

By Hanaan Rosenthal Author, Founder and President of Custom Flow Solutions

There's no doubt that the Internet has changed the way we do many things. I cannot remember, for instance, the last time I visited my bank teller, bought a postage stamp or walked into a book store. While the use of the Internet has some unsavory social implications, such as IAD (Internet Addiction Disorder) to name one, it also has aspects that will forever displace the balance of power from a few at the top calling the shots, to the rest of us determining our own path.

Displacement The first such phenomenon in my mind, was YouTube. Before YouTube became popular, you were a star when Nickelodeon or Disney told you you were. Someone in those corporations would scout talent, made them up and then made them famous. Now take Fred , for example. He put some crazy-funny home-made videos up, and people liked him. He now has over a billion views and over 2 million subscribers. No one at Disney told him what to say or what to wear. Or Jenna Marbles, the hilarious inappropriate blond hottie, who's now sporting over 11 million subscribers and over 1.27 billion views. I dare Nickelodeon to sensor her rants. The web, in these cases, is all about displacement. Letting you and I decide what goes and what doesn't rather than having some suit decide for us. is another great equalizer -- not so much for book stores, but very much for authors. Anyone can write and publish book and get a chance to sell it along side the best sellers. I like that! Getting funded The next such form of displacement is another example of how the masses can grab control previously held by the wealthy few: Funding. Yes, rich people have more money, but take all us average Joes, and together we have a bundle.

And now, with crowdfunding, we can combine that money to decide what projects get funded. The traditional methods of funding meant that people with great ideas and creativity were actively looking for the few people with money to spare. Those few would then decide if we, the people, are or aren't interested in their idea. Crowdfunding skips that step altogether. Why ask one person what the rest of us want when you can just as the rest of us? With crowdfunding, anyone can invest as little as $1 in any project. Sometimes to buy advanced product, simply to be a part of the next big thing, or even buy shares of the company, as may be soon possible. The difference is that the company or individual that put the product together don't have to go begging. All they have to do is make a compelling video and convince you and I that helping them with $12 will be just too much fun to pass. 2013 is becoming a $5 Billion year for crowdfunding projects, up over 500 percent from 2010.

Next step When you have successful sites revolving around a new phenomenon, you start to see aggregator sites. While some of those are aimed towards the crowdfunders themselves, a new, unique site is emerging that aims to make projects across all crowdfunding sites more accessible to investors. By investors, of course, I mean you and I.

Meet A brilliantly designed new site that allows you to discover, rate and share crowdfunded project across all sites. Part of Betaspring, a startup incubator in Providence RI, founders Matt and James have something really cool going on. I caught up with founders Matt, James and Olivia, their social media marketing coordinator, to get a better idea of what they are up to.

Q: What is

Matt: Since Kickstarter was kickstarted in 2009, literally hundreds of crowdfunding websites have sprouted up, releasing thousands of projects every day. Today, we - the backers - simply can't find the campaigns we care about, let alone keep up with them. is the new tool for project supporters. It pulls together the projects from all major crowd funding platforms. Whether you're a fashionista or a gadget enthusiast, learns what you love, and recommends you the hot new projects you would never have found, as soon as they come out. For projects you've liked, it alerts you if you're about to miss an early bird discount or the closing date, so you don't end up kicking yourself once it's too late.

Q: How are you positioned relating to other sites?

Matt: There are a million and one tools and websites out there which help fundraisers get their campaign off the ground, but supporters are left to fend for themselves. We either have to trawl through projects across a dozen of our favourite sites every day, read an email on what the Kickstarter staff happen to like that week, or more often just miss out. We've been called 'the crowdfinding app' and 'the Kayak of Crowdfunding', but really our mission is to help crowdfunders find and back the projects they care about.

Q: What do you see the role of crowdfunding in the world economy?

Matt: Crowdfunding is a fundamentally new, more democratised flow of capital. $5 Billion this year will grow to more than $10 Billion next year. If you think this is a big deal, analysts estimate that crowdfunding will unlock as much as $1 Trillion in capital with the JOBS Act. The crowdfunding movement is enabling all of us to collaborate with a flood of inventors, creatives, entrepreneurs and altruists, to make their ideas a reality and the world that bit better. As a startup ourselves, we have seen so many world-changing projects fail because of a simple lack of capital. Making these new markets more efficient by bringing the right people together definitely gets us out of bed in the morning.

Q. Are you looking for funding yourselves?

Matt: Truth be told, if we were, we couldn't legally announce it right now. We'll be raising a seed round very soon though, and with the JOBS Act lifting the ban on public fundraising last September, everyone can now benefit from the same investments rich VCs have accessed for decades, through equity crowd funding sites.

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