News about crowdfunding platforms.
News about crowdfunding platforms.
This post was originally produced for Forbes.
On May 16, 2016, Regulation Crowdfunding became effective. Arguably representing the biggest change to securities laws in 80 years, Title III of the JOBS Act passed in 2012 made investment crowdfunding legal subject to the issuance of regulations. Now, almost five years after the law passed, we have enough history with the rules to begin understanding what’s working and what’s not.
To work through the issues, I reached out to leading crowdfunding practitioners and experts for their reactions to the first nine months of practice in the space.
Bernard Loyd, a social entrepreneur and President of Urban Juncture, Inc., was among those who have had good experiences with the new rules. “Our experience has been that it provides efficient access to a broad pool of potential investors, many previously unknown to us. The online platform provides significantly better access to potential investors who share our passion for investing in economically-challenged, under-resourced urban enterprises with whom we otherwise would not have been able to connect.”
There is consensus that while Regulation Crowdfunding is working for some issuers, changes in the law or regulation would allow it to work for more entrepreneurs. Joy Schoffler is the Principal of Leverage PR, which represents clients in the crowdfunding space. Her reaction was typical, “I see it working for many companies already.”
The biggest challenge with the rules is the $1 million cap on crowdfunding offering. David Weild, IV, Chairman and CEO of Weild & Co., said, “The gross proceeds cap of $1 million is overly limiting. It should be eliminated altogether. Remember, there is a dollar-exposure-limitation ($5,000) per non-accredited investor so there is no need to limit the aggregate raise. Why do we care if there are 200 investors at $5,000 each or 20,000 investors at $5,000 each when the individual investor has the same risk limit? It is an arbitrary and poorly thought-through limitation.”
Kendall Almerico, a JOBS Act and crowdfunding attorney, largely agrees. “Congress set the $1 million limit far too low. It should be raised to at least $5 million.”
Alon Goren, Co-Founder, Crowd invest Summit, would go one step further, eliminating the restrictions on individual investors. “I think that anyone should be able to invest in what they want. I think that the limits are un-American, both on the size of the raise and on the investor.”
Congress is working on fixes, notes Philip Racusin, CEO of EnergyFunders. “The Fix Crowdfunding Act is a start in that it would allow for the use of special purpose vehicles to aggregate together investors (for the benefit of the investors and the business owner), and raises the maximum fundraise to $5,000,000.”
Special purpose vehicles or SPVs are used to manage large numbers of small investors, simplifying the capitalization table and ownership structure from the perspective of the issuer. SPVs are specifically prohibited by the current rules. Sara Hanks, CEO of CrowdCheck, and Douglas Ellenoff, Partner at Ellenoff Grossman & Schole LLP, a crowdfunding lawyer, agree that allowing SPVs is a necessary fix.
Another problem with the rules that experts say needs to be fixed is the prohibition on testing the waters. Title IV of the JOBS Act authorized the SEC to issue new rules for Regulation A offerings, raising the limits and specifically allowing issuers to expose a potential offering to the market publicly before launching the offering formally, even allowing the issuer to collect formal, non-binding expressions of interest in advance.
Hanks, Vincent Bradley, former CEO of FlashFunders, and Dan Baird, CEO of Crack the Crowd, among others, agree that adding testing the waters to Regulation Crowdfunding is essential.
Almerico explains why, saying, “No pre-launch marketing is allowed, which prevents a company from effectively soliciting investors until the offering is live. With a rewards-based campaign on Indiegogo or Kickstarter, successful companies spend months conditioning the market, generating leads and building up social capital before their launch. You cannot do that with Reg CF, and it means a company is behind the eight ball when they start their offering, because their marketing has not even begun yet.” He notes that the SEC has unilateral authority to change this rule.
Several practitioners, including, Weild, note that the limitations on marketing a crowdfunding campaign even after it launches are unnecessarily strict. “Don’t you find it fascinating,” he says, “that anyone can sell anything (except securities) on Kickstarter without limitation and buyers are given zero upside for their purchase money and the companies are only subject to criminal fraud? Regulation Crowdfunding gives the buyer upside. Why should securities be treated so differently from commerce, especially for smaller companies? There is no systemic risk concern for Government.”
Jenny Kassan, an attorney who consults with social entrepreneurs and women-led businesses on capital strategies including crowdfunding, noted, the marketing “restrictions are nonsensical,” adding, “this could be done without legislation.”
The JOBS Act requires crowdfunding issuers to file an annual report with the SEC. Kassan believes this requirement should be lifted, noting, “I think this would require legislation.”
While the rules do not define any of the costs of a crowdfunding offering, the rules do impose costs. Racusin highlighted the need to reduce the regulatory burden to reduce the costs of offerings, especially those over $500,000.
Among the other lessons learned, Weild noted, “The $1 million cap is not large enough to entice broker dealers and investment bankers to become involved so they don’t and the companies really could use the advice/involvement of experienced professionals.”
As the crowdfunding rules were being drafted, there was a lot of discussion about fraud and the corollary need to protect crowdfunding investors from it. Ellenoff noted, “That all of the expressed concern over fraud has not borne out as a legitimate reason for frustrating the legislation.”
Scott Picken, founder and CEO of Wealth Migrate, similarly noted, “There is significant demand and while the regulation is important to ensure that the consumer is protected, social proofing also goes a long way to protecting the consumer.” He added, “Most importantly investing is common sense and everyone has common sense.”
Designed to Fuel the Support for and Growth of Smaller Local Nonprofits, CharityBomb Offers Donors the Chance to Win Cash Prizes up to $175,000
Press Release – LAKE FOREST, Calif. – February 28, 2017 – The GiveNetwork, a mobile giving platform designed to encourage support for charitable fundraising initiatives, today announced the launch of CharityBomb, which hosts regional online fundraising campaigns designed to fuel the support and growth of smaller local nonprofits working within a targeted area of philanthropy.
The first campaign will support five Southern California charities dedicated to helping local youth with opioid addiction, grief recovery, drug education, overdose recovery and end or life care for critically ill children. The participating charities include: Solace Foundation, OUR HOUSE/ Camp Erin, GRASP/ Broken No More, Kristie’s Foundation, and California Youth Services. The goal is to raise $5 Million dollars for these organizations by August 2, 2017. The funds will be distributed evenly amongst all five.
“We are excited about the launch of CharityBomb, especially this first campaign,” stated Bob Jones, CEO of the GiveNetwork. “We lost our youngest son to an opioid overdose in 2014. The journey of our grief led us to the organizations that are included in this campaign. They all do such great work, but they are small and underfunded. They need the support of the community to continue to do the work they do and help families like mine get the help they need.”
CharityBomb offers donors the unique opportunity to win while supporting charity. As part of reaching the $5 million campaign goal, six winners will be randomly chosen to share in overall cash prizes of $175,000.
Five different drawings will be held for each of the five collected donation stages. Each stage is triggered with each $1 million raised. Once a stage is triggered, a donor will be selected to receive a cash prize of $25,000. Once all five stages are reached, a bonus drawing will be held to select a winner from ALL donors to receive a bonus cash prize of $50,000.
“California Youth Services is thrilled to participate in the first CharityBomb campaign, which benefits many worthy causes,” said Kelly Scott, M.A. Ed., program director at California Youth Services. “This event will support our efforts that help children, teens, and families facing life’s many struggles, such as mental health issues, substance abuse, learning disabilities, and legal challenges. We have been making an impact since 2005 and grateful to be part of a collaborative effort to make a difference in young people’s lives.”
“Our mission at the Solace Foundation is to reduce the number of opioid related deaths in Orange County by expanding access to the overdose reversal drug naloxone. We have saved over 500 lives in the past 12 months! We believe EVERY life matters and that everyone deserves a second chance. Supporting this campaign will help us continue to help and save even more,” said Aimee Dunkle, executive director of Solace Foundation OC.
For more information on CharityBomb and to make a donation and enter to win the sweepstakes, please visit http://www.charitybomb.us.
For more information on the charities included in the CharityBomb campaign, please visit their respective web sites:
The GiveNetwork fundraising platform was developed for one ultimate purpose: to effectively engage the community in philanthropic support while on the go. With today’s consumer increasingly engaging via mobile and social media, a tool for “responsive engagement” has become an absolute necessity. The GiveNetwork platform enhances charitable fundraising initiatives and allows donors to engage with and support their favorite charity from their smartphone. For more information, please visit http://givenetwork.biz/.
The micro-donation program has helped train teachers and rebuild classrooms in Nepal
Press Release – The micro-donation platform The Footprints Network recently crossed a major threshold, topping the $3 million mark in funds raised. Founded by the World Nomads team in 2004 in response to the Southeast Asian tsunami, the idea was to create a way for the company’s e-commerce customers to give back to the places they travel via small micro-donations at the point of purchase.
In 2016 alone, 138,020 charitable World Nomads customers made a micro-donation, resulting in over $350,000 raised to help fund 22 community development projects in 14 countries around the world (compared to 2015, the number of donors increased by 8% and the total amount raised increased by 32%). Since the program’s inception in 2004, nearly 1.2 million people have given more than $3 million to help support 156 global community development projects.
To put those numbers in some context, here’s what The Footprints Network has meant to just one of those 150-plus partners, the Australian Himalayan Foundation (AHF).
The Australian Himalayan Foundation was set up in 2003 to improve the quality of life for people in the remote communities of the Himalaya. The AHF strives to ensure the long-term viability of sustainable health, education and conservation programs in the poorest, most under-resourced areas of the Himalaya across Nepal, Bhutan and Northern India. These programs help to reduce poverty and address human rights like gender quality, children’s rights, and the rights of marginalized groups in rural regions throughout the Himalaya.
“The support we have received from The Footprints Network since 2006 has been enormous,” says AHF communications and fundraising manager Siobhan Reynolds. “World Nomads customers have raised more than $400,000 to fund both our Teacher Training and Quality Education program and our Rebuild Nepal efforts, which were set up last year following the devastating earthquakes in Nepal in 2015.”
The TTQE project is focused on improving the quality of teaching that is offered in public schools across the lower Solukhumbu region of Nepal, and with funding from The Footprints Network it has expanded its training programs across a number of areas in the region. The result has been an increase in primary school enrolment rates, a reduction in dropout rates of children from low socioeconomic backgrounds, improved overall attendance rates, and increased enrollment rates of the most vulnerable students.
“The funds raised for our Rebuild Nepal efforts currently total more than $70,000,” says Reynolds. “To rebuild a classroom costs $15,000, so this money has already funded four-and-a-half classrooms, which is an amazing result.”
Space Nation gives everyone a chance to participate in space travelling. It’s an opportunity to learn and train for a space mission, and ultimately to become a crew member on board the International Space Station.
Cohu Experience recently closed a $3.4 million crowdfunding round in Finland for its Space Nation Astronaut Program. Cohu raised its first million in only 43 minutes.
“Space travel is a universal dream and we are proud to welcome everyone to join Space Nation as investors or participants. This is an inclusive program so anyone in the world can participate. We really want to democratize space,” said Kalle Vähä-Jaakkola, the CEO of Cohu Experience.
“Space is something that interests us all, no matter where you live or how old you are,” said Michael Suffredini from Axiom Space. Suffredini is a member of Cohu Experience’s Advisory Board and former NASA International Space Station Program Manager.
“Space travel has been, until now, only accessible to a very limited set of people, but Space Nation is here to change that. The Program is truly the adventure of a lifetime, and it will offer something for everyone.”
Space Nation Astronaut Program (SNAP) is being developed together with NASA’s astronaut trainers. The program commences with a freemium smartphone app that develops its users’ physical, mental and social skills through an array of tailored challenges. Participants who have gained the most points will be selected for a televised training competition under the supervision of NASA’s astronaut trainers.
A central element in the astronaut training program is the transmedia concept. It allows participants to create teams and attract fans to support their efforts to win a ticket to space. Even if you were not destined to become an astronaut, you can learn new skills and have fun while cheering for your favourite participant.
The next funding round will take place in the United States in the coming weeks via Fundable.com.
This list of crowdfunding platforms does not purport to be complete, but it will include dozens of crowdfunding sites you can consider for your campaign, giving you plenty of candidates for fundraising.
If you are part of the company and see an error that needs correcting, please send us an email.
Investment Crowdfunding Sites (click on the Name/URL to see a more complete profile):
|Name/URL||Social Impact Focus|
|BankRoll||Includes Social Impact|
|EarlyShares||Includes Social Impact|
|Equity Net||Includes Social Impact|
|Flashfunders||Includes Social Impact|
|Funding Circle||Includes Social Impact|
|Funding Circle US||Includes Social Impact|
|Localstake||Includes Social Impact|
|Milaap Social Ventures Pte Ltd||Includes Social Impact|
|Mindfull Investors||Includes Social Impact|
|Mission Markets||Focus on Social Impact|
|OfferBoard||Includes Social Impact|
|OurCrowd||Includes Social Impact|
|Rabble||Includes Social Impact|
|RedCrow||Includes Social Impact|
|Seed Equity||Includes Social Impact|
|SeedUps Canada||Includes Social Impact|
|StartEngine||Includes Social Impact|
|SunFunder||Includes Social Impact|
|NextSeed||Includes Social Impact|
Crowdfunding Sites for Donations and Rewards (click on the Name/URL to see a more complete profile):
|Deposit a Gift||Personal/Nonprofit|
|Fairfundr from Majamba Digital||Personal/Socent|
|Hispanics in Philanthropy||Socent/Other|
|Women’s Worldwide Web (W4)||Socent/Other|
Real Estate Focused Sites (click on the Name/URL to see a more complete profile):
|Patch of Land|
|Wellesley & Co.|
If you know of a site that we should add to our list, please alert us here.
This profile is part of our crowdfunding site directory. If you have used the site and have comments you’d like to share with our readers, please share them below. If you are part of the company and see an error that needs correcting, please send us an email.
RedCrow is an equity crowdfunding platform with a unique focus on well-curated investment opportunities. The platform aims to provide exclusive, professionally-vetted investment opportunities to accredited and eventually non-accredited investors, with industry professionals leading the way. RedCrow is marketing its first set of opportunities to “Doctorpreneurs,” who can “invest in what they know” alongside strategic investment advisors with credentialed backgrounds in the field. Founded by a former Morgan Stanley financial Advisor, CEO Brian Smith, and Rock and Roll Hall of Famer and serial entrepreneur, Chairman Jerry Harrison, RedCrow’s initial mission is to help investors discover privately held, early stage startups in the booming Healthcare and Medtech sectors, connecting backers to innovative companies trying to grow their business.
Alliance for Public School Technology Resources wants to make learning technology and teaching materials more equally available, to not-for-profit education organizations and public schools with very low (if any) costs to conventional education funding sources. They are raising money on Indiegogo. Recently I caught up with Steven Corey Hixson to learn more about the effort; here’s what he told me:
What is the social benefit you hope to achieve with or through your crowdfunding campaign?
Well, teachers need a way to collaborate, and to determine what works best in the classroom as a team. This way teachers and administrators can improve education materials through peer-review, and also discuss best-practices in a way that improves the overall quality of the teaching and the learning materials. Assessments require technology that the NGO model can provide freely, and still have other costs, so we’re striving for a way to save time and cost while increasing efficacy and finding ways to create rubrics for visible learning. Working together does not have many costs associated with it other than time, and so teaching people a way to develop efficient and effective plans for teaching that can be shared saves the most valuable resource, which of course is the time to spend on development and planning.
How much money are you hoping to raise and why? How much have you raised so far?
Our goal is to pay travel and presentation costs for the Golden Key International Honours Society Education Delegation in South Africa, and also the materials and travel costs for the delegation and workshop at the Kappa Delta Pi 2017 Convocation. Any additional funds raised will create more investment in free technology for public schools in 2017, as well as the additional development of shared materials and resources. The costs for travel are the current goal, but beyond that and into the future, funds will be donated to schools for teacher collaboration activities in order to facilitate professional development as well as resource development in terms of technology and assessment. At the end of the year any unused funds will go to another public education related 501(c)(3) or public school organization as decided by a survey and our board.
Whom are you trying to help with your project and why?
The students stand to benefit the most from teaching that is visibly effective, and school classrooms that can be equipped with blended learning technology that improves the quality of teaching. OTher stakeholders benefit from the success of the students in the larger community as they demonstrate their learning and become a part of the larger ecology and global economy. Teachers benefit from the time saved as well as the improvements in outcomes at their school, where administrators benefit from the higher performance of the overall organization even at sometimes the same or less cost. Employers benefit from the skills that students learn, businesses benefit from a well educated workforce, and parents benefit from the increased investment that their kids have in learning in the school communities and also the larger life-contexts that they inhabit; as educators can free up resources to focus on being present to better student learning engagement, the overall community creates a more functional support system for all stakeholders, especially students and parents.
Which category of crowdfunding campaign best fits what you are doing?
Donations based – no rewards, equity or repayment
Check out the campaign:
Press Release – Austin, Texas (Feb. 2, 2017) – Kimbia, a leading provider of online fundraising solutions and crowdfunding events, would like to congratulate its customers for their achievements and share key accomplishments from the last year.
In 2016, Kimbia clients raised over 10% more online than in 2015. The Kimbia platform processed millions of online transactions, helping charitable organizations around the world raise over $240 million through a variety of online fundraising campaigns. The average online gift for 2016 was over $120 per donation, 17% higher that the industry average of $102 according to the 2016 M+R Benchmarks Study.
Looking at giving day data alone, Kimbia powered over 80 events that raised over $130 million in online donations benefitting over 29,000 participating nonprofits. This includes the largest single-day online giving day event ever, North Texas Giving Day, raising $37.3 million during its 8th annual event on Sept. 22, 2016.
Kimbia’s clients utilized several innovative platform updates to optimize their donation process including:
“As we embark on a new year, I always like to take a minute to stop and review where we have been,” said Kimbia CEO Mark Perkins. “I am so proud of our accomplishments and how this company has come together to grow and learn from the challenges faced last year. I know that we are now stronger than ever, and I can’t wait to see what good we can help our clients do in 2017.”
Kimbia will celebrate its 10-year anniversary later this year and is currently on track to raise over a billion dollars for nonprofits around the world since its inception in 2007.
Here’s how your CSR funding can help support the distraught families of the brave soldiers who have sacrificed their lives protecting our country.
Project by: Ketto.org
Category: Eligible CSR activity as per Companies Act 2013, Schedule VII
(vi) measures for the benefit of armed forces veterans, war widows and their dependents;
Here’s what the folks at Ketto have to say about her project:
We’ve started the ‘Support Soldiers’ initiative to help families of our martyred soldiers by facilitating crowdfunding for their survival and sustenance. This initiative will remain active for all days of the year, needless to say, especially when we’re hit by tragic and unfortunate news of another brave soldier losing his life while protecting the country at the border.
If you too would like to show support, then adopt a martyred soldier by starting a fundraiser for them, contribute to either of the fundraisers or simply spread the word by sharing the link with your friends and family.
How can you help them?
These brave soldiers laid down their lives for the country. They joined the army and pledged their life for the safety of the country, a pledge they fulfilled. These brave hearts are survived by their distraught family (they were the sole breadwinners in most cases).
You can show your support for these soldiers by raising funds for them. Simply start a fundraising campaign and reach out to your network by sharing your campaign on social media.
Money raised through an online fundraiser on our platform will be directly transferred into a soldier’s account. This will remove any mismanagement of money and will ensure the money goes to the next of kin.
Progress till date:
Ketto has taken up this initiative after seeing the outcome of the Uri attacks.
We pushed this initiative on social media and saw a number of people/corporates coming forward to start fundraisers/ contribute to ongoing fundraisers. Individuals and a few corporates started almost 30 campaigns and managed to raise over 37L (and counting). This will ensure that the 18 martyrs family will get 2L each. Goes to show how simple yet effective crowdfunding is to help our soldiers.
In 2016 alone, a total of 29 soldiers lost their lives on duty. We have just started this initiative and there’s a lot more that can be done.
Want to Fund this Project?
Visit Ketto.org here and support the cause.
Looking for funding?
If you have a social project that’s high on innovation and impact, but running low on financial fuel, do write in to Nidhi Singh at firstname.lastname@example.org with your proposal, and we’ll feature it on FUND MY PROJECT.
Press Release – London has regained its crown as crowdfunding capital of the world, according to data from The State of the Crowdfunding Nation 2017, a report produced by The Crowd Data Center (TCDC), which has tracked and analysed more than 450k crowdfunding campaigns over the last three years
Figures for the last year show that more than 128.000 campaigns were launched in 2016. From those London outstrips other world cities, including nearest rival Los Angeles – just – to secure the top slot with the most successful campaigns.
America launched the most campaigns nationally, and raised the most money in the last year, but London had the most successfully completed campaigns of any city.
Previously, monthly snapshots showed London leading the way for several months in 2015, but in 2016 it cemented its place firmly ahead of America, the birthplace of crowdfunding.
This growth in “Seed-Crowdfunding” – creating new products, services and business – is heralded as a game-changer in business finance.
CEO of TCDC Barry James explained: “Seed crowdfunding is maturing and as it does there are more entrepreneurs, producing better campaigns, getting more backing – especially in the major centres like London and Los Angeles – with London regaining its lead this last year.
“These super-hubs are hotbeds of early adopters. Which means there’s huge scope for growth as know-how moves beyond these into many more places like Manchester, Liverpool, Edinburgh and smaller towns and cities across the UK – not to mention the world.”
In the UK Edinburgh came second to London, followed up by Manchester, Bristol and Glasgow. There is still a way to go to catch up with London, and TCDC sister organisation The Crowdfunding Center, will be working with funding hubs, LEPs, business advisors and mentors to help move them forward over the next 12 months.
TCDC has also curated startling data on women entrepreneurs; the Women Unbound report, produced in conjunction with PwC, which will reveal the scale of the coming impact of the democratization of finance on women owned businesses. This report will be published in Spring 2017.