Wall Street Journal Report  By Suzanne  Barlyn
Read the complete Small Business report .

Ms. Barlyn's  WSJ WebWatch article  provides a great overview of  online  resources for entrepereneurs.  Her curated review  includes a summary of content providers in four business start-up  topics:   franchising,  managing technology, legal, and  finding financing.  Let me know if this list helps you find the information that you are looking for to launch and grow your business.

1.  Franchising

SBA
sba.frannet.com
This online seminar from the Small Business Administration offers an overview of franchising basics for entrepreneurs who are thinking about franchise ownership. Prospective franchisees can find out about the legal responsibilities of franchise ownership, financing and more.

International Franchise Association
franchise.org
The website of the International Franchise Association offers a wealth of information. Among the free features: a search engine for finding details about more than 1,100 franchise opportunities and a course on franchising basics. There's also a forum where prospective franchisees can talk to each other, as well as an industry expert. For a fee, the site's Franchise University section offers online courses and a certification program for franchise executives. Costs run from about $50 to $450.

FranchiseHelp
franchisehelp.com
FranchiseHelp aims to provide an independent source of information to prospective franchise owners. Most features are free, including a search engine where users can find companies based on industry, location and their available capital. Articles and webcasts address topics from conducting due diligence to closing the deal. The site, run by FranchiseHelp Holdings LLC in New York, also includes a library of franchise disclosure documents, at $220 per file.

2.  Managing Technology 

InDinero Inc.
indinero.com InDinero Inc.'s site helps entrepreneurs manage company finances in real time. Users enter company bank and credit-card account information when they sign up, and inDinero updates data from those accounts regularly. The information gets aggregated on a "dashboard" that users can check to monitor balances and expenses, as well as see financial trends over time. The site can also generate more detailed information, such as how much the business is spending on certain products. The Mountain View, Calif., company says it uses multiple technologies and practices to protect information. The free version of inDinero tracks up to 50 transactions per month; more robust plans cost $29.99 and $99 per month.

Postling
postling.com
Postling lets users publish on multiple networking sites through one centralized location. A dashboard shows your recent posts and comments. You can also write posts in advance and schedule times for their publication. A daily digest summarizes account activity from multiple sites. The site, from Waffl.com Inc. in New York, offers a basic account free. A premium account, which also helps you monitor your business's online reputation, costs $49 monthly.

ContactMe
contactme.com
ContactMe, from Webs.com in Silver Spring, Md., centralizes contact information for customers and prospects. Along with keeping a record of people's email addresses and phone numbers, business owners can note details such as when they send out estimates to people in their contact file. Owners can also create a "ContactMe" button to use on their websites; when visitors click on the button, they can send a note but can also enter all of their contact information in a form. The data are then automatically swept into the site owner's contact file as a new entry. There's no charge for a basic account, but expect to pay up to $120 per year for service with more flexibility.

3.  Legal Advice

Nolo
nolo.com/legal-encyclopedia/ business-llcs-corporations 
Nolo, a Berkeley, Calif., publisher, opened 40 years ago to make the law more accessible. It continues that mission through its website, which includes a section for small businesses. Entrepreneurs can use the free library to learn terms that appear in business contracts, as well as other important concepts. Updates and a blog, also free, cover new developments in the world of law. Do-it-yourself services—where the site walks you through the questions on legal forms—are available for a fee. You can also buy books and software.

TechAgreements
www.techagreements.com/
Small businesses can use TechAgreements for a low-priced glimpse at high-priced lawyering. The website, from Socratek LLC in Lexington, Mass., includes actual agreements used in over 500,000 transactions. Users can read the existing agreements to get ideas about how other companies dealt with similar situations, such as an intellectual-property agreement on behalf of Procter & Gamble Co. Free previews are available for all agreements. Downloading a complete document costs $35.


SmallBusinessNotes
http://www.smallbusinessnotes.com/managing-your-business/legal/
This free site, from Internet Brands Inc. in El Segundo, Calif., offers easy-to-read yet comprehensive guidance on a range of issues. The site makes information simple to find through hundreds of links that lead to more specifics, including details about tax forms, illegal business practices and protecting consumer information from identity theft.

4.  Finding Financing

ChubbyBrain
chubbybrain.com
Want to find a potential investor with a minimum of legwork?  ChubbyBrain promises to help. Answer some questions about your business, and the site's search engine will examine the funding history of private investors that have backed U.S.-based businesses and suggest those that are best suited to your company. The free service will generate up to 20 candidates. (Note, however, that the investors aren't connected to the site in any way.) ChubbyBrain, from CB Information Services Inc., New York, also offers free guides about venture capital and conducting due diligence on investors, among other topics.

AngelList 
angel.co
AngelList is a free networking site for start-up companies and angel investors. Start-ups in search of funding can pitch their companies to some of the hundreds of investors who also use AngelList by selecting criteria such as market and location. Investors can then vote on the companies' popularity, ask questions and accept introductions. AngelList culls the most popular start-ups every week and emails them to a broader range of investors involved with the site. The site is run by Babak Nivi and Naval Ravikant, who are themselves angel investors.

Securities and Exchange Commission
sec.gov/info/smallbus/qasbsec.htm
This Q&A by the Securities and Exchange Commission includes an overview of laws that can apply to raising capital. The site includes information about registration requirements for public offerings, possible exemptions from those laws and an overview of certain state regulations.

Ms. Barlyn is a staff reporter for Dow Jones Newswires in New York. She can be reached at suzanne.barlyn@dowjones.com.

Printed in The Wall Street Journal, page R2

By: Gregory T. Huang

Every once in a while, an investment model comes along that turns the innovation community on its head. The venture capital industry, still less than 50 years old, is one example. Now an emerging paradigm called royalty-based financing, applied to early-stage startups, may be another. The approach has its roots in the Boston area, and is starting to generate some serious buzz in the Northwest. If you’re a VC, angel investor, or entrepreneur, it definitely needs to be on your radar.

The concept of royalty-based financing is simple. Instead of buying equity in a young company, an investor agrees to receive a percentage of the company’s monthly revenues—up to a limit of, say, three to five times his or her investment. Instead of waiting five or 10 years for a startup to go public or get acquired, an investor can start seeing returns almost immediately. This approach means investors should be able to fund a much wider range of startups than just those that typically receive venture backing—the ones that have potential to grow huge, fast. The downside is that your returns are capped, so if you do end up backing the next Google or Amazon, you still only get five times your investment back. Meanwhile, for entrepreneurs, it provides startup money without having to give up an ownership stake in the company.

Royalty-based financing is not new, but it’s only been in the past few months that investors around Seattle, including the seed-stage fund Founder’s Co-op, have been openly exploring the model. In New England, a few investment firms are actively using it, led by Lexington, MA-based Royalty Capital Management, Wakefield, MA-based BDC Capital, and Portland, ME-based Rockwater Capital. Harvard Business School professor Clay Christensen (of The Innovator’s Dilemma fame) is a supporter of the model, and views it as disruptive to the venture capital industry.

The idea actually dates back to mining companies getting financed to dig for oil, natural gas, and minerals, and government-funded economic development programs. But it is getting renewed interest from VCs and angel investors who increasingly need returns fast, in a tough climate for exits. Indeed, royalty-based venture financing “has the real potential of becoming a major new sector in the private capital market,” says Arthur Fox, the founder of Royalty Capital Management, who first used the approach with startups in the early 1990s.

Back then, Fox was an advisor to several startups; he’s an MIT alum and was previously an engineer with HP and Westinghouse before co-founding three tech companies of his own. He first tried out the royalty-based idea as a way to get compensated by the companies he was mentoring, instead of taking some stock. He found that this made them more efficient with his time, plus he would get paid every month. So he decided to try out the strategy as an investor. “It changed everything, because the normal criteria in selecting companies as a venture capitalist is a high-growth one,” Fox says. “When you invest in a company, buying stock and equity, you have no way of getting out unless they become significantly large enough to have a liquidity event.” With the new approach, he says, “every month you get a check, and it doesn’t matter if they ever have an IPO, or get bought out.”

Fox’s two previous funds have returned good profits. His biggest win was Andover Advanced Technologies, a multimedia software startup that had no revenues when he originally invested $100,000 in 1993. After two years, Fox had gotten back $125,000 in his cut of the revenues, and he invested in a second round with an angel investor, in which he took some equity. The company (renamed Andover.net) went on to ride the dot-com wave with a successful IPO in 1999, and was acquired for $1 billion by VA Linux Systems in 2000. Fox’s stock ended up being worth $15 million. It’s an example, he says, of how “royalty investment lets you get your foot in the door, evaluate how the company is really doing, how management is doing, and you may have the opportunity to participate in a follow-up round with much more knowledge.”

Of course, it also points out that if you want a home run, you need a conventional equity-based deal. And that’s the main objection most venture capitalists have with the royalty-based approach. While it may broaden their options of who to invest in, it goes against the high-risk, high-reward approach they’re used to. They also wonder why more investors aren’t trying the approach, if it’s so successful.

But this ignores the dire reality of today’s financial markets, says Thomas Thurston, the founder of Portland, OR-based Growth Science International, a research and consulting firm focused on predicting whether businesses (everything from startups to public companies) will survive or fail. “Venture capitalists say, ‘I don’t know if I’m comfortable capping [returns] at 5x,’” Thurston says. “But on the other hand, you’re probably not getting 5x right now, so you’d be perfectly happy.”

Thurston has recently helped bring the ideas of royalty-based financing to the Northwest. Originally trained in law and business, Thurston was with Intel Capital when he was invited to do a year-long research fellowship at Harvard Business School with Clay Christensen in 2007, focusing on rigorous tests of Christensen’s disruption theory (that’s worth a separate story). One of the many ideas the two came across was royalty-based financing, through meeting with Fox back East. Thurston has since been working with Christensen on a study of royalty-based financing. He concludes that “there are enough circumstances where it really is a good tool,” given the traditional limitations VCs face.

“So for that reason, I think it’s very fun,” Thurston says. “No longer is funding gated by the likelihood of an exit. That’s very significant.”

Perhaps what’s most interesting about the approach is that it could enable many more kinds of startups to get off the ground, and more young companies with revenues to grow. That’s compared with the 2 percent or so of all businesses that would be attractive to a VC. Given the difficulty entrepreneurs are facing these days to get seed- and early-stage funding, it could be a perfect match. “The alternative for a lot of businesses is nothing. It’s awesome for the entrepreneur,” Thurston says. “It gives you less pressure to grow and sell.”

Looking to the future, Thurston thinks that while some intrepid VCs will try out the royalty-based approach, angel investors “will be the ones who do the earliest experimentation and start to prove it out.” That’s in part because they don’t usually have limited partners to confirm it with. “I think it’ll feel less sexy to a VC,” he says. “But to VCs who are innovative, they’ll say, ‘Sexy or not, I like getting good returns.’ Imagine being a VC, you make an investment in September, and by October you’re getting revenues.”

Fox, for his part, says his next step is to raise a larger fund in the Boston area, probably on the scale of $25-50 million, and then start pools in other geographical areas. The idea would be to invest $1-3 million in emerging companies that are doing a few million dollars of revenue a year (“there are a lot of them,” he says). Fox says he’s still looking for the right partners.

So is royalty-based venture financing poised to take off in the Northwest, and beyond? “I would love it, but I’m heavily biased,” Thurston says from Portland. “I’ve been focused on predictions. There is momentum happening in my small world, and people are wanting to hear about this.”

Gregory T. Huang is Xconomy’s National IT Editor and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com, call him at 617-252-7323, or follow him at twitter.com/gthuang

Who needs angel or venture capital funding to get their business or product idea off the ground? If you’ve been holding back because of it, you might just find there’s help out there, fueled by the community, and managed by some of these fantastic sites, which can help you fund your idea, business startup or art, film, music projects. For many people, the thought of taking significant financial risk holds them back from jumping head-long into launching the idea that has been stuck in the recesses of their head. 

I've compiled a little collection of crowdfunding websites and web applications that are designed to take the risk out of that creativity and innovation, allowing even the little guy to raise the moolah to operationalize that amazing idea. 

 Small amounts really do add up.  Give one of these sites a try – both as a giver and if you are running a nonprofit consider how your organization might benefit from using some of these services.  Post your profile with your project description on one of the crowdfunding websites to start your fundraising campaign and change the world. 

1. KickStarter 
URL: http://www.kickstarter.com/
KickStarter has received quite a bit of publicity recently for its efforts. Most notably the open source facebook alternative Diaspora managed to raise $10,000 in just 39 days, proving that the concept had legs, and that crowdfunding as  a concept has the community well and truly behind it. It’s not just software projects that the site caters for, out of all the current activity on the site, software is probably the most dull – as creatives around the world have embraced it as a way to realise spectacular dreams.  With everything from life sized mousetrap games to one man’s cultural journey across Mexico KickStarter has clearly captured the imagination of its audience.   As far as the rules for funding goes, KickStarter keeps things simple. In order to receive the funding needed, a project must reach or exceed its funding goal or no money changes hands. If you do manage to reach your goal, 5% is taken from the project creator. Personally I think this is fair, with the current traffic / reach of the site, the tools available to manage your project, and the empowerment that a site like this gives individuals 5% isn’t that big an ask. Checkout the Hall of Fame webage listing the 100 most funded projects.

2. RocketHub
URL: http://www.rockethub.com/
Another very similar site to KickStarter is RocketHub. Describing themselves as a grass roots crowdfunding site, Rockethub’s focus is again within the creative arts, with the two audiences for the site split into ‘Fuelers’ – those providing financial assistance to cool projects, and ‘Creatives’ – those coming up with the concepts, artwork and music and in need of funding. RocketHub’s fee is actually either the same or lower than Kickstarter’s. Rockethub always charge a flat 8% while Kickstarter charges a flat 5% AND passes along the Amazon Payments transactional fees to the artists who utilize their platform – which can be anywhere between 3% and 5%. So the total Kickstarter fee can be anywhere between 8% and 10% while RocketHub always offers a flat 8% fee. For crowdfunding tips and tactics please take a look at RoketHub's CrowdFunding Bootcamp sister site: http://www.RocketHub.org.

3. Quirky 
URL: http://www.quirky.com/
Quirky offers product designers and inventors a shot at getting their product to market. They call their product a ‘social product development tool’ – which it is, allowing the community to vote for products that they think would sell, and are worth creating, in the process single handedly changing the way people think about product development. Feedback can be received on product direction, strengths, weaknesses, opportunities and threats, all from within the Quirky site, resulting in products that have a stronger vision than those generated through traditional means.

4. Fundbreak 
URL: http://www.fundbreak.com.au/
Fundbreak is an Australian crowdfunding website, again with the all or nothing funding model, fundbreak insist that your goal is reached prior to receiving any funding at all.  Fundbreak fees are set at 5% for invitees, or 7.5% for standard joe public users plus 2.4% for Paypal transaction fees making it one of the more expensive options considering what’s out there at the minute, however sometimes having a dedicated site for a particular country can help attract a local audience. If you have a project that is performance art or requires a live audience this can be a worthwhile advantage and I’ve no doubt that the majority of Fundbreak’s traffic is currently Australian. Worth noting as well that anyone can launch a project, or support a project to meet its funding goal. You are not required to be in Australia. Some of my favorite projects being created at present on Fundbreak are ‘Tell me a story‘  and ‘Oceans and Wires‘ two projects that received more than 100% funding and perfectly show the sort of creativity that can be taken for a walk and tested out online. Fundbreak is launching in the UK very soon as well, http://www.fundbreak.co.uk

5. CatWalkGenius 
URL: http://www.catwalkgenius.com/
Cat Walk Genius gives all you budding fashion designers out there the chance to launch your own clothing line, all by using the power of the crowd.  You can be part of your own fan-funded collection, needing nothing more than your browser, a sprinkle of talent and some creativity.  As with the other crowdfunding websites mentioned, their are two audiences. Supporters – the folks interesting in helping a designer financially, and the designers – who create the magic. You can apply to be either or both a designer or supporter.  As a supporter, should you choose to back a designer who’s work you like, you are effectively buying shares in their lines. Starting from as little as £11, not only can you aid the production of clothing that you like, you are effectively investing in their future sales for up to 6 months.  If your designer hits the target and their new collection goes on sale you get a share of the sales revenues, proportionate to your share of the funding.  As a designer, Cat Walk Genius allows you to rally your troops, and sell direct to your fans through the site. You will be able to fulfill orders all without the cost of setting up your own online e-commerce shop.  Adding images to a profile page is free for designers (up to a point) – with additional images costing a small additional fee. Overall Cat Walk Genius provides an innovative platform for designers to receive the recognition they deserve, and build a fanbase around their collections, all through the power of crowdfunding. Genius indeed.

6. Fans Next Door 
URL: http://en.fansnextdoor.com/
Fans next door is a European Crowdfunding website  (still in beta) and as yet they don’t  take a cut for promoting projects through their site, with the only additional costs being the PayPal processing fees. They currently accept all types of art forms, from literature to films, visual arts and craft, music, performances, fashion, design, and video games. As the user base grows and additional forms of projects come along we can expect this to evolve. The reward concept has been used in the promotion of many of the projects, with the system being architected to show what you get from artists for increasing amounts of funding. For example €10 may get you a copy of the artwork, €20 may get you a copy of the artwork signed etc. etc. The more of a fan you are, the more you can expect to receive.

7. IndieGoGo 
URL: http://www.indiegogo.com/
IndieGoGo offers a wide variety of creative art funding categories, with projects in everything from Inventions to Gaming to Mobile Apps to Performing Arts. No matter what you are trying to raise funds for, there will be other projects in that category currently receiving funding. Another benefit that IndieToGoGo offers is that they have hooked up with suitable partners to help give your project extra reach through commercial channels.  Most  impressive of these partnerships is MTV New Media, which could see your work being featured on MTV or VH1 – with of course, your permission. Desirable content includes fictional and non-fictional web series, shorts and other digital content, with the partnership helping to discover develop and distribute the best projects and creative talent on the web. At the very least it gives project creators a chance at much needed additional exposure. Another recognised side effect that IndieToGoGo have capitalised on for project creators, is unique rewards and pre-sales. Unique rewards have been used by artists such as Dizraeli to provide backers with artwork, private concerts and signed albums to further fund his musical pursuit. Pre-sales obviously allows you to generate interest in a concept or project prior to even starting it, with the web becoming your marketing machine, and IndieToGoGo your vehicle.  Unlike a few of the other crowdfunding sites mentioned here, if you don’t fully reach your goal – you keep the current funds to date. With a few of the others mentioned here, (such as RocketHub and KickStarter) you must fully realise your specified amount prior to receiving anything. I’ve no doubt that this financial safety net will appeal to many project creators.

8. CoFundos 
URL: http://www.cofundos.org/
CoFundos operates on the basis of pledges, allowing you to signup, and create an open source project / idea that you would like to develop. Crowd sourcing is used at all stages of the project to allow contribution of the requirements and refinements to the project.  Essentially, the system gives users of open source software the ability to fund specific developments that may not already be in the existing software path, and spread the cost amongst the community. Developers can choose to take your idea or project on, and when the implementation has been agreed by multiple bidders are requested to make the respective donations.

9. Profounder 
URL: http://www.profounder.com/
Profounder operates on the basis that inside everyone’s social circle both online and offline – there are people who are willing to support your dream. Each of those people potentially becomes an investor in your company, and equity is split amongst them.  Profounder gives you the tools to raise the capital that you need, and the tools to manage all of the associated book-keeping, legals and compliance fillings.  Right now, the site is still very much in alpha status, with registrations due to open in the Autumn. Still you can sign up for status as an ‘alpha entreupreneur’ if you want to start earlier than that, and are serious about using the system.

10. MicroGiving 
URL: http://www.microgiving.com/
  The First Crowdfunding & Philanthropy Website! The first crowdfunding website that lets you raise money for anything and give some forward to a charity, cause, or person of your choice. Microgiving is for anyone-- artists, musicians, film makers, developers, designers, dreamers, believers, idealists, inventors, entrepreneurs, non-profits, charities or people struggling through an economic hardship such as a loss of housing, medical emergency or natural disaster.  

11. LendingClub
URL: http://www.lendingclub.com/home.action
Lending Club was one of Facebook's first integrated applications. The 3 year old company's website matches angel investors and individual lenders with borrowers. The peer-to-peer lending business model allows members to directly invest in and borrow from each other. The Lending Club avoids the cost and complexity of the banking system and pass the savings on to the borrower and the investor. Both sides can win: better rates to eligible borrowers (with good credit rating) and better returns to investors.   Forbes.com featured an online article about Lending Club and Renaud Laplanche on December 2, 2010. Check out the article is called Making Personal Loans For Fun And Profit  -  published in the December 20, 2010 edition of Forbes Magazine.

12.  Microgifts
URL: http://www.microgifts.org/
Microgifts is an iphone app that lets you donate as little as .99¢ to select charities.  Go to the App Store to download a free copy.  Each week a charity is featured and select information is sent to the app users iphone – giving them a chance to donate or not.  Once a charity is featured by Microgifts, it is permanently added to the database and users can donate to the charity at any time using the app.  The group of charities is ever growing as new charities are being featured and added to the database all the time.   Donations start at .99¢, $1.99, or “x” which means you can add in your own amount.  Any charitable organization can apply to be added to the Microgifts database simply by emailing them at info@microgifts.org.

13. MicroVentures
URL: http://www.microventures.com/
 MicroVentures enables peer-to-peer (P2P) transactions by bringing small businesses and investors together in an innovative way.    Peer-to-peer (or social) lending  is, in its broadest sense, the name given to a certain breed of financial transaction (primarily lending & borrowing) which occurs directly between individuals without the inter-mediation/participation of a traditional financial institution.    MicroVentures Marketplace targets companies that are creating technologies, products and services in the following competitive areas: Biotechnology, Business Products and Services, Computers and Peripherals, Consumer Products and Services, Education, Environment, Electronics, Financial Services, Healthcare Services, Internet Technology, IT Services, Media and Entertainment, Medical Devices and Equipment, Retail/Distribution, Semiconductors, Software, and Telecommunications.  The MicroVentures Marketplace reviewers assess start-ups in a process similar to that of other Venture Capital companies. MicroVentures Marketplace  screens all prospective applications and will select companies that fit a profile which includes an evaluation of suitable risk, likelihood of profitability, and willingness to give up an equity stake. There is a $100 fee, you fill out a preliminary MicroVentures Marketplace funding application, and submit your business plan. They will review it and if you are approved, your business opportunity will be listed on the website for investors to review and help fund. 

14. PlanUSA
URL: http://planusa.org/
 This is a nonprofit microfinance program that lets you make a donation to the cause you most care about by selecting an issue to support. (You can also sponsor a child, a project, or make a general donation to microfinance).  The donation is done online like any other donation – the thing that stands out for me is the amounts they are asking for are minimal.  No $200 dollar donations here – most of the site includes donations for less than $20 dollars making generosity affordable.

15. World Vision Micro
URL: http://micro.org/
World Vision Micro lets you become a banker – loaning money to a budding entrepreneur create a business that will support his or her family and subsequently their community.  Here’s how it works: you read through the list of approved entrepreneurs and their business ideas, select one you want to support and make the donation (either all or in part).  Once the business is fully funded you can follow the progress of your donation as the business grows.  Ultimately the borrower repays the loan (the repayment rate is an impressive 98.7%) which is then recycled back into the program providing funding for another potential business owner creating an ever growing circle of prosperity.  For as little as $25 dollars you can help reduce poverty around the world.

16. PeopleFund
URL: http://peoplefund.org/about/
 PeopleFund is a non-profit 501(c)(3) based in Austin, Texas. Founded in 1994 as Austin Community Development Corporation, they provide loans, financial and technical assistance to people who are left out of the financial mainstream.  Since inception, their loans and financial consulting have helped put thousands of Texans on the path to financial security and independence. In 2008, they founded PeopleTrust, a non-profit 501(c)3 dedicated to creating and maintaining affordable housing in Texas.  Need a loan or small business services?- email the staff at  getaloan@peoplefund.org

17. peerbackers
URL: http://peerbackers.com/
 Create a profile and share your project or venture story.  The peerbackers  site makes it simple to share your business using their social media tools – just send the link to your peerbackers pledge page.  Through the power of viral marketing, thousands of potential backers will ultimately view funding requests. Expand the definition of “your community” and pledge your way to funding your project.  Anyone, anywhere in the world can contribute to a venture on the site. With a Visa, MasterCard or a PayPal account. To contribute, just browse and select a business and click the blue “Back This Venture” button. Choose the level of funding and select your reward. From there, you will go through the Pay Pal checkout process to complete your backing. 


Go Ahead - Seize the Day - and Ask!
What's stopping you from asking  your peers, friends, family, customers, co-workers, or even total strangers to fund your new business or project idea?  

9 Reasons To CrowdFund Your Next Idea  
Posted in Fundraising, Tips & Advice 
by  Vanessa Stewart       November 18, 2010

The biggest benefit of crowdfunding is raising the money you need to make your project or idea a reality.  But what other benefits does crowdfunding provide over and above raising extra cash?  

Here are nine reasons why crowdfunding can enhance your fundraising efforts:

What are you working on and how can I help?  The first response from the early stage entrepreneur is how to improve their cash flow, how to raise start-up capital, where to find the dinero to  jumpstart their new businesses.   Amidst the chaos of the financial meltdown, most of us overlook the social aspects and usefulness of the internet for fund-raising.   

Enter Crowd Funding. 

Crowd Funding or “crowd financing” basically uses the power of the Internet to fund startup organizations. An entrepreneur who is searching for funding could seek pledges of small amounts to support the growth of her venture. Whereas traditional venture financing is generally limited to wealthy or “accredited” investors , crowdfunding allows the average person to partake in the potential growth of a startup and at the same time benefit a small business.

Bootstrapping sounds like a groovy dance move,but  it can be one of the more difficult means of generating money for a venture.  But recently, certain companies are making entrepreneurs’ lives easier. The brilliant Jessica Jackley, cofounder of Kiva.org, is in the midst of starting Profounder.com, an online platform for entrepreneurs created to raise equity and debt financing via the internet. A recent venturebeat posting says that Jessica has the likes of Reid Hoffman, LinkedIn chairman, and Chris Larsen, CEO of Prosper, as advisors on this project so her team is not short of expertise in Web 2.0 and financing realm.

Other companies involved in crowdfunding have sprung up recently as well. One that seems to be setting the standard is kickstarter.com. On its website you will see an array of projects and the amount of funding it has raised to date. For example, you can finance a one acre rooftop farm in Brooklyn supplying fresh produce to local communities of New York City. How ’bout supporting an all-cartoon web based channel called Kaboing? Or supporting an organic snow cone business that already has 108 backers throwing in $2900? With confidence in the markets slowly returning, the clean tech sector is seeing vast improvements in funding. In fact, the number of deals in cleantech were up 29% from last quarter and almost 85% from a year ago. Allowing small investors to partake in what otherwise have been limited to the ultra-wealthy would create a more fair playing ground in an otherwise unfair investment world.

CrowdFunding Best Practices 
Learn about the best practices of crowdfunding from the blogs and educational websites online.  I recommend getting the CrowdFunding Guide and CrowdFunding Formula home study courses by Dave Lavinsky, President of GrowThink, Inc. The company provides information products and services to educate the entrepreneur about the best practices for raising capital for your project idea and business. Consider getting the Creative Financing Guide , Grant Guide, and the Guide To Raising Capital from Angel Funding. 

Recent CrowdFunding News in the Boise Weekly
Read about the success of creative project owners.   Alms for the Creative: Crowdfunding means passing on traditional funding to pass the collection plate .   
The article provides examples of a variety of crowdfunded projects, with links to the associated websites. It discusses the increasingly legal gray area that crowdfunding represents as a “patronage and donor” model of business capital creation. The article also discusses the campaign to change securities regulations to include the micro-funding model for funding businesses and non-profits as an SEC filing exemption.  
URL:  http://bit.ly/dHAGWY 

CrowdFunding Law Website
Get acquainted with the proposed changes to the laws governing micro-funding.
URL: http://crowdfundinglaw.com/ 

The next time someone asks you what are you working on and how can I help, send them the website link to your crowdfunding profile and project description.  Ask them to donate toward your project goal!

Build Your Network at CEO Space
 CEO Space  is a global business development membership club that enriches my personal and professional life.

Build your network of clients and venture partners at CEO Space. CEO Space hosts five retreat weeks a year. A team of leading Fortune 500 CEO Coaches provide MBA lesson plans including day and evening on demand team coaching within a single fee plan. Corporate group rates apply.

Call 1.888.886.8913  to schedule an initial phone consultation.  Register today  for a free business acceleration consultation with my colleague Dr. Richard Kaye, Vice President of CEO Space.

Lifetime Business Networking and Trade Show 
CEO Space Graduates enjoy lifetime benefits which extend through a network of world wide business clubs that foster cooperative vs. competitive business practices. Mentors and investors report CEO Space "sweet spot" for both.

Recent celebrity faculty included Chuck Vollmer, author of Jobenomics, who initiated the 20 By 20 (20 million jobs by 2020) campaign at CEO Space. The celebrity faculty & participants are from diverse backgrounds - brand strategists, marketing managers, patent lawyers, business planners, project managers, technologists, inventors, economists, university faculty, space designers, architects, investors, and celebrity musicians, actors, artists, athletes. The faculty provide free advising, coaching, serve as mentors, strategists, and engage in business-building conversations during meals and group sessions.

The CEO Space Trade Show   is awesome.  There will be over 500 business owners and people in transition attending Sept 28-Oct 3, 2010.  Berny Dohrman, CEO Space Founder and Chairman, talks about The CEO Space Trade Show Expo -

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