Crowd Funding – the Symbiotic Relationship with Sport

iPledg - Logo - Low-ResolutionThe success of crowd funding campaigns is largely down to some key factors. Firstly an engaged crowd, a group of supporters who are passionate about the outcome or want the rewards on offer, and who are motivated enough to spread the word. Then there are the rewards themselves – cool, sought after and representing good value, enough to motivate a pledge of support. Of course, there also needs to be a well articulated project about which the campaign is being run to raise funding. These are all present with sporting clubs, big and small, making a perfect fit for crowd funding.

Sporting groups and clubs always have projects on the go that require funding. More and more, they are finding the traditional methods of raising funds becoming less effective and more tedious. Sausage sizzles seem to raise a few dollars, but require a mountain of effort to raise relatively little funding (also, it’s kind of ironic that sporting clubs that strive for health raise funds from the sales of unhealthy fatty sausages). The same applies to selling fundraising chocolates. Raffles, too, involve so much time, and require someone to organise prizes, someone to sell the tickets, and then the admin around drawing and delivering the prize. Again, a lot of hard work for seemingly little return. And the big issue with these traditional forms of fundraising, they have little in the way of residual value as an engagement tool. Once the fundraising drive is over, there is hardly any ongoing engagement.

The types of projects that sporting groups can fund are limitless. There is a the constant need for equipment – shirts for players, training equipment, balls and bats, as well as nets, corner posts, and supporter facilities. There are also events that are run by some clubs, the old Dinner Dance or the like that bring about further supporter engagement, but which few clubs can afford to run. Preseason and post-season tours are costly imposts on sporting clubs, but these too can be crowd funded. Crowd funding can also be used by sporting groups in some creative ways. Tweed Valley Rollers (TVR), a group of roller derby girls from northern NSW, ran a campaign where they successfully funded a 1920s-style calendar which was the catalyst to further funding efforts. It all began with a crowd funding campaign which they then leveraged into further funds and so on.

Coming up with rewards for sports-themed campaigns are always easy, as the sector naturally lends itself to perks that will motivate people to support campaigns. A New Lobster offered private coaching as well as well as other services in a form of pre-sales to generate pledges. TVR offered preferential seating at their game, photo opportunities with players, and a heap of other coll rewards that saw them quickly achieve their target. In most cases, sporting clubs can improve the geographic spread and appeal of their campaign by utilising contacts in their sport to get more broadly sought after rewards. A New Lobster offered private tennis lessons as rewards – a great incentive if you live locally, but less effective to those who aren’t in the vicinity. If they utilised contacts to get a couple of autographed racquets from a local famous player on the international circuit, and then offered these as rewards, then their appeal would immediately increase to potentially a worldwide crowd of possible supporters . There is also the opportunity to offer some big rewards to sponsors, both present and prospective, and really get some major contribution to the campaign. Creative thinking can dramatically improve the scope and potential success of a crowd funding campaign.

But the most well structured campaign will not reach its target without engaging a crowd, and this is where sporting clubs have a big advantage. Sporting clubs, by sheer virtue of what they are, have a natural crowd to tap into. Players, parents, supporters, sponsors, and even competitor clubs’ players and supporters are potential backers of campaigns. By using the methods of communication that clubs use in their day-to-day operations (i.e. there doesn’t need to be any extra work undertaken to run a crowd funding campaign), sporting clubs can get the message of their campaign out to the crowd. Ground announcements, newsletters, text messages, social media blasts, or usual forms of communication to supporters can be employed to inform the crowd of the campaign, and get them to pledge their support,  or to spread the word (or both!). The benefit of most sporting organisations is there will also be the core loyal and passionate supporters who will not only pledge their financial support, but who will drive and support the efforts required to continually get the message out there, doing this as availability permits, representing a far more efficient and effective fund raising option for time and resource poor sporting organisations.

Posted on April 8, 2016 By iPledg With 0 comments

Crowd Funding – How You Start Determines How You Finish

iPledg - Logo - Low-ResolutionPreparation is the key to successful crowd funding, whether employing the pledge model or capital raising through equity crowd funding. Many experts can quickly assess whether the campaign will reach its goal, just by looking at the campaign and asking the project creator a few simple questions. In most cases, success is determined not by what happens during the campaign, but by the work done in the prelaunch. Research and work done in the lead up to going live will not only give your campaign the best chance of success, but often determine whether the funding goal will be met.

Recently, I stumbled upon perhaps the best template for successful raises that I have ever seen. I am not one to usually promote other sites and businesses related to Crowd Funding, but I can’t sing the praises highly enough for the highly respected Eli Regalado, Chief of Madness at Mad Hatter Agency, who has raised over $1,000,000 and has now put his hints and tips into the Udemy course – “The $400k Crowdfunding Launch Formula” (He obviously wrote the course before raising even more funds!).

His course emphasizes the need for 8 – 12 weeks of preparation prelaunch to really understand the product, the market, and the crowd. “Family And Friends Raises” raise small amounts of money, and rarely even have the audience to do that much. Following Eli’s tips helps to really position yourself well at the starting line of your campaign, so you can cruise to the finish line (OK, there still is a fair amount of work between the start and the finish, but preparation is the key).

The first step is to build your team with specific roles and tasks. Set up a register where you can communicate amongst one another, and have a clear record of what needs to be done by whom, by when, and how. Plan your work and work your plan.

Once your team is in place, start to gain intelligence on the project, the space, and the crowd. Eli gives some great tips on how to “Search like a Ninja” and use simple Google searches in ways far more effective than I ever knew possible (and I thought I was pretty good at searching topics on the ‘net). Searching and researching with tools like will assist in understanding who is talking about your sector and what they are saying.

Identifying and getting on the right side of influencers and advocates will help increase your audience and your bandwith, as well as add considerable clout to your message. It is not enough to find influencers with a few thousand followers – using Eli’s tips will help you find influencers with tens of thousands, if not hundreds of thousands or even millions of followers. “The $400k Crowdfunding Launch Formula” doesn’t only introduce you to tools like but will show you how to use them to engage. From there, you can also get bloggers blogging your message, and turning into advocates for your campaign, way before it even begins. And best of all, you can ask for what you need from well connected, key influencers.

Once your crowd is starting to grow and buzz, you get to the building phase, at which point you start creating content and digital assets. The shortest distance between you and the point of success is not a straight line, but by following the most well worn and successful paths of those who have gone before you.

Then it is a matter of continuing to work your crowd until your campaign goes live. Be authentic in how you choose people and build some rapport first. Take time to do this and your influencers and ambassadors will not only help with your campaign, but they will also help you long term. The beauty of the internet is knowing that if you make a trusted and sincere connection to key influencers and work with them, the reach can be quite extraordinary.

Put quite simply, crowd funding is work – team work! Build your team and work with them. As the founder, drive your vision, but ensure you involve people and listen to them. Build and engage your crowd, and use the experience of those who have done it in the past to build a solid campaign. And remember that the money comes after you build your community. If you don’t, it is like trying to sell Amway on the street corner.

Posted on March 4, 2016 By iPledg With 0 comments

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According to the recently available boasts, the reality that on the climate change is groundless. Any kind of clinical evidence for such states?

Experts who aid climate change make clear being follows Climate change may be the phenomenon of surge in heat level with the setting. This boost in temps as a result of excessive emission of co2 and green-colored home gas by getting rid of of energy sources.Continue Reading

Posted on February 26, 2016 By Bob With 0 comments

Crowd Funding – Revisiting the Third Tier Principle

iPledg - Logo - Low-ResolutionThe importance of the Third Tier Principle has long been stressed as the basis on which any crowd funding or capital raising must be based. It is essentially the key to success, with early engagement being the start of broader attention and support. It’s like when we were kids standing on the side of the pool with a group of friends, no one wanted to jump in first. But get a few in the water, and the edge of the pool is no longer the domain of “the cool kids” who will have already jumped in to join their peers.

The third tier principle starts with their first tier – your family and friends, the ones who know and love you. Even your followers, fans, and contacts on social media are considered first tier, as are all of the people in your email folders. In essence, anyone with whom you can have direct communication constitute your first tier. These are the ones you must engage for support for your campaign to be successful. They are the ones who provide early validation for your fund raising or capital raising efforts, and will show others how to follow. Without early engagement, and the support of the first tier, the broader circles of your crowd will be less likely to engage.

The power of the first tier can never be understated, and the ability to engage them early in your efforts to raise broader support is essential to you reaching your funding goal. A study of major crowd funding campaigns around the world showed the importance of priming your crowd early, even before our campaign formally begins, so that you achieve early runs on the board soon after your campaign commences. The study showed that if, in the first 48 hours, you have not raised any funding, your chances of reaching your target was just 15%. However, by reaching just 1% of your funding target within the first 48 hours of your campaign, you almost double your chances of success to 27%. In fact, if you can get to 5% of your target within the first 48 hours, you have a 50% chance of reaching your goal. Should you be able to get to 10% of your funding target in the first two days, then your chances of success increase dramatically to 70% – Achieve 20% and you have an 80% chance of succeeding. And campaigns with 35% of their funding goal met within the first 48 hours meet or exceed their funding target in almost every case.

Having understood the importance of early engagement of your first tier, and the need to build breath of numbers before your campaign commences, your first followers “beckon” to their networks to join them in their actions in following and supporting your campaign. They become your advocates and call to their networks, usually through the use of social media, to do as they have done in pledging their funds to your target. This results in a considerable amplification of your initial efforts. Once this happens, your campaign will start to build a momentum of its own. Crowd funding experts recognise that if a campaign hits 30% of its funding target, it goes on to meet or exceed its target in 90% of cases, and this is due to the momentum created once the second tier engages.

Once you have momentum, the third tier sits up and takes note. Media will also jump on board without prompting. Statistics show that you need to reach 25% of your target before strangers start pledging their support, but once you tap into the third tier, you are now attracting the attention and support of a massive crowd. Referred to as “the smart money”, the third tier is less driven by emotion than the first and second tier, and more about the prospect of what is on offer (although they often are motivated by the fear of missing out).

You Tube sensation, The Shirtless Dancing Guy, is a short video that really captures the essence of the Third Tier principle. It is a clear visual demonstration as to how important it is to gain the support of your first followers, and embrace them. It shows how the first tier instinctively calls on their networks to support and to do as they have done. Without the momentum created by the first two tiers, the third tier, or broader crowd, is less likely to engage. But when the tipping point is reached by the first two tiers, a groundswell is created as the third tier join the movement, and the initiator becomes surrounded by a broad, engaged and supportive crowd.

Posted on February 25, 2016 By iPledg With 0 comments

So what is Crowd Funding?

Crowd Funding is a rapidly emerging form of e-commerce, leveraging off the growth of the internet and social media. According to Gartner Research, $1.2 billion was raised by Crowd funding sites in 2009, and is expected to grow to over $6 billion by 2013. In these tough economic times, Crowd Funding continues to buck the trend as it fills a very real and relevant need for raising money for initiatives that (in many cases) would just not get up if it weren’t for platforms such as iPledg.

But despite this, in Australia, Crowd Funding remains a relatively unknown term. When asked by people “what do you do”, our answer “we run a Crowd Funding platform” is met with a puzzled look as if we had answered in a foreign tongue. In fact, our biggest challenge at this point in time is to educate an unaware yet very receptive market as to the existence of this wonderful form of e-commerce. The most rewarding part of our role is watching peoples’ faces light up as the penny drops and they start to imagine the applications for which this new vehicle can work for them. Everyone has a project, or knows of someone who has a project, but most commonly these initiatives are not actioned because of a lack of funds. Crowd Funding now allows for project creators to unlock the possibilities and get support from those in their social and extended networks.

According to Wikipedia, “Crowd Funding describes the collective cooperation, attention and trust by people who network and pool their money together, usually via the Internet, in order to support efforts initiated by other people or organizations.”

Crowd Funding is receiving renewed attention from both commercial and social entrepreneurs, charities and community groups, and those in the artistic and creative space now that social media, online communities and micropayment technology make it straightforward to engage and secure pledges from a group of potentially interested supporters at very low cost and low risk.

One of the pioneers of Crowd Funding in the music industry has been the British rock group Marillion. In 1997 American fans underwrote an entire US tour to the tune of $60,000, with donations following an internet campaign – an idea conceived and managed by the fans before any involvement by the band. Marillion has later used Crowd Funding with great success as a method to fund the recording and marketing of several albums.

iPledg is a crowd funding model using a PLEDGE funding model. A pledge is not an investment, so is not bound or encumbered by traditional legislation around funding and investments. A pledge on iPledg is simply a pledge of financial support for a project.

Essentially a project creator creates a project online and indicates how much funding is required to complete the project and in what timeframe they wish to raise those funds (usually 30 – 120 days). Anyone posting a project invites friends, family, fans, and broader networks to offer support. Visitors to the website may then pledge money to projects they like via an automated online payments process, and for which they are offered a reward.

Only when projects meet their funding target within the specified time frame will the monies be passed onto the project creator. When posting a project, project creators may offer rewards (which may not be paid for out of funds raised). The project supporters then receive rewards from the project creators once funding targets are realised in the funding timeframe. Should the minimum funding target not be reached in the specified timeframe, the project supporters do not part with their money and the project creator then has the opportunity to review their pitch and start again. This is what is meant by “all or nothing” funding.

Apart from a wonderful way for project creators to raise the capital they require for their initiatives, a successfully run fund raising campaign often provides social proof for a project creator’s concept, showing that more than just the project creator believes the initiative to be a good idea . It allows project creators to raise funds without going into debt or giving up equity, whilst presenting the idea to (potentially) a worldwide audience.

We welcome you to the exciting world of Crowd Funding with iPledg.

Posted on January 20, 2016 By iPledg With 0 comments

Crowd Funding – The Discovery Session

iPledg - Logo - Low-ResolutionBefore you start your crowd funding campaign, it is essential to define your target market. Not for your product or service, but to work out who represents the pool of potential supporters who might assist you with your fund raising. Prior to going live with your campaign, you should make a comprehensive list of potential supporters who you can approach, so that the fund raising process starts quickly and accelerates rapidly, attracting the attention of broader and broader networks of supporters. This is known as the Third Tier Principle.

Most crowd funding platforms are there to guide you through the fund raising process, as well as to host your campaign. Whilst their sole purpose is not to attract supporters, they will do this if you start to engage the First Tier, namely those that are closest to you (your friends, family, workmates, etc). Once you have engaged the First Tier, these supporters will start to do some of the work for you, engaging the Second Tier, or “friends of friends”, as the early adopters start to tell their friends what they have done, and inviting them to do the same.

Once the Second Tier starts to support your campaign, you will have established a movement or sufficient momentum for the Third Tier to start to take note. These are a broadest pool of supporters, and what is termed “The Smart Money”. The First Tier supported out of emotional motivation – they know you and love you, but the Third Tier do so out of logical reasoning. They see movement and want to jump on board.

third tier

You need to liken it to the days of your childhood when you stood with your friends at the edge of the swimming pool. Initially, there was the constant elbowing and comments of “you jump in”, to which your friends replied “no, you jump in first”. This continued back and forward until the first, braver few jumped in, then a few more, and then more until it was no longer “cool” to be left standing on the edge.

The same is the case for fund raising. Engage your First Tier. Get them to jump in and then others will follow suit.

To establish your first tier, you should run a Discovery Session to identify who might make up that group.  A Discovery Session simply allows you to make a list of potential candidates for the First Tier so that you have a target group to approach. The broader you make this, the more chance you have of establishing the initial momentum and getting underway to reaching your funding target.

Below are listed some areas to consider when making the list of your potential first supporters:-

  • Family – Ask your family members if they would like to support your campaign. Often family members are reluctant to support because they never really know what they are getting into, but your project description makes it simple, clear and well structured as to what they are supporting.
  • Friends – Same as for your family, ask those who know you and love you the most to consider supporting you.
  • Neighbours – Who are the people that live in your community that ask you with some interest what you are up to? Surely there are people in your local area that may make good potential supporters.
  • Workmates – The clearly defined structure of a crowd funding campaign makes it easy for the people you work with to support you.
  • Clubmates – Are you the member of a sporting club, social club, or a group like Lions or Rotary? Are there members there that you could introduce to your campaign? Remember, you don’t have to directly ask them to support you – if you have set up your project description in a way that is attractive, they will feel compelled to support without you asking. You just need to tell them about what you are doing and invite them to take a look.
  • Social media contacts – Do you have friends on Facebook, Followers on Twitter, or Connections on Linkedin? Prior to a crowd funding campaign, build up your contacts on social media, and once your campaign is live, be sure to invite your connections to have a look at your profile page. Marketing this way is a game of numbers, and the more connections you have on social media, the better chance you will have of reaching your funding target, so be sure to build up your connections before your campaign goes live
  • Interest groups on social media – Not only is it wise to start building up your followers on social media, but start to seek out groups and individuals with an affinity for what your campaign is about. By connecting with likeminded individuals and seeking out groups on social media, you greatly increase your pool of potential supporters. A simple search for search terms associated with your product or service will connect you to a whole new groups of potential supporters.
  • Everyone in your Sent box, Inbox, and Deleted emails – they are all email contacts and a great place to start a database. Everyone who has sent you and email in the past or everyone to whom you have sent an email is captured on your computer. Fish out these email addresses and start to build a list of them (a simple database). You can then email them all about what you are doing with a simple link to your campaign once it is live.
  • Local media – Start to build a list of local media contacts so you can let them know about what you are doing. On the nightly news you will see many of the reporters have their twitter handle (jot them down and send them a direct message). Many of the journalists in the local paper have their email address listed at the end of articles they have written – add them to your database. Contact the local radio stations and tell them about what you are doing. The local media are always on the hunt for interesting local stories, so feed them your news.
  • Blogs – Ever considered writing a blog? It is a great way to get your thoughts out there and engage likeminded people and those interested in your product or service. And if you struggle with writing a blog, you can do a video blog (face to cam) or even use sites to create a cartoon blog to get you message and thoughts out there. As well as creating your own blog, do as we have suggested above and search for blogs related to your product or service, and join them to engage with people who may become potential supporters.
  • Suppliers – Those who supply you, whether it be the components for your product or service, or anything from the cleaning products your use in your business to your stationery supplies, all make potential supporters. They always keen to strengthen ties to their customers, and may make for potential supporters. There is one way to find out – add them to your list and invite them to have a look at your campaign.

Your Discovery Session will have flushed out at least a couple of hundred (if not many more) names of potential supporters who you now need to get on and contact. Start to email, telephone, sms, or visit them and let them know about your campaign. Keep in mind that people will need a couple of reminders during the period of your campaign. Contacting them is not a one-hit-wonder, and the “constant contact” strategy works best, from sending an email a week right up to social media announcements that will need to be made daily.

Posted on December 27, 2015 By iPledg With 0 comments

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Posted on December 26, 2015 By Bob

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Posted on December 26, 2015 By Bob

Crowd Funding – No Small Change When It Comes to Social Funding

iPledg - Logo - Low-ResolutionMention the word “Entrepreneur” and people immediately think of words like profit, performance, return and dividend. But when it comes to social entrepreneurship, we move into new ground, that of broader cultural, social, and environmental outcomes. Profit may still be associated with such ventures, but profit is a mechanism to sustainability rather than the main focus which instead is aimed toward the greater good. And those supporting such initiatives do so not out of greed (what’s in it for me), but out of a shared passion for the cause or the outcome it will deliver.

Social entrepreneurship operates on a focus shifted from maximising profits for shareholder returns, to the pursuit of solving social problems. Typically there are four key categories of social entrepreneurship:- community-based enterprises, socially responsible enterprises, social services industry professionals, and socio-economic enterprises.

Community-based enterprises bring together a community, and focus its culture and resources to drive toward their desired outcome. Socially responsible enterprises aim to create legacy projects, that offer sustainable development directed mostly on societal gains. Social service industry professionals are those who work specifically in the sector of social services to develop and build on the social capital of their chosen individual, community, or organisation.  Socio-economic enterprises refers to companies with an awareness of their Triple Bottom Line, and direct some of their revenue and profits towards implementing social change, be it empowering change-makers, mentoring, strengthening existing projects and assisting with further capital raising.

The concept is not something new to the social or economic landscape. Back in the mid 1800s, Florence Nightingale demonstrated the concept when she not only documented the need for change in hospitals where high death rates were occurring, she drafted the change plan, and organised numerous fund raisers to source the capital to implement her recommendations. She engaged the nursing community by reassigning tasks to the most capable and passionate supporters of the cause, uniting them and focussing them as a community to deliver a beneficial outcome to the cause about which they felt so strongly.

In recent years, initiatives of a social entrepreneurial nature have been significantly assisted by the reach of the internet and the emergence of crowd funding which, in the words of Wikipedia, allows for “the collective cooperation, attention and trust by people who pool their money and other resources together, usually by the internet, to support efforts initiated by other people or organisations”. In effect, social entrepreneurs are now able to embrace a greater following and raise the required funding through crowd funding.

Once such example was the project Tackling Child Labour on Indian Stone Quarries Through the Construction of Residential Schools. Having identified that children living on stone quarries belonged to one of the most disadvantaged groups in India, the initiators of this project recognised the approval given by the Indian Government to Santulan to develop residential schools, and decided to crowd fund the additional costs needed to cover basic furnishings such as study desks, chairs, beds and linen. In appreciation of the selfless work Santulan does in pursuit of social justice for some of the most marginalised communities in Indian society, this group sought to raise $15,000 on crowd funding platform, iPledg. Their 90 day campaign exceeded their $15,000 target, with the campaign raising $26,790, all of which was allocated to the works of Santulan.

The benefits of social entrepreneurism are obvious, but the devil lurks in the inevitable detail. Whilst most social entrepreneurs are well meaning, their skills may be questionable, especially in the areas of sustainability, engagement, and scaling. In addition, both the skilled and less adept initiator will come up against the policymakers who often do not fully understand social initiatives, which can lead to the project stagnating or stalling completely. Policymakers often do not share the same passion as the social entrepreneur, with their priorities being more around mitigating risk and avoiding political repercussions, so the meeting of the two minds requires some highly skilled massaging of the differing agendas. And once underway, longer term sustainability of projects can be compromised by the entrepreneur confusing “not for profit” with “not profitable”, thus running out of funding requiring to maintain momentum or retain knowledge and resources.

Posted on November 8, 2015 By iPledg With 0 comments

Crowd Funding – Leveraging for Big Business

iPledg - Logo - Low-ResolutionThe pages of the worldwide web abound with testimonies of successful crowd funding, of projects requiring a few hundred dollars to many thousands and even millions of dollars to become commercial reality. Creative artists, charitable organisations, and community groups have all benefited, but grass roots commercial success has been achieved through crowd funding in what was previously a gap at the bottom of the funding ladder. And now it is big business that is starting to explore and benefit from crowd funding as they embrace the fastest growing form of e-commerce on the planet.

Traditionally the domain of those wanting to raise $1,000 to $30,000, the commonly held perception of crowd funding started to change when the inventors of the Tik Tok watch turned to crowd funding to raise $15,000 for commercialisation. With worldwide crowd engagement, they changed conventional thinking when in just 30 days they raised $962,000 from over 13,000 supporters. All of a sudden, crowd funding was transforming from a tool for start-ups to a mechanism for bigger business to partake and fund their aspirations. Further reinforcement of this thinking came when the Evolution Dock became the first campaign to raise over $1mil by crowd funding, and then quickly the video game Double Fine Adventure raised over $3mil. When the Pebble Watch successfully raised over $10mil (the first $1mil coming within the first 24 hours of the campaign), big business started to explore how they could apply crowd funding to their own needs and stakeholder aspirations.

So what actually is Crowd Funding? Wikipedia perhaps describes it most clearly – “Crowd Funding describes the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the internet, to support efforts initiated by other people or organizations.” Or put more simply, crowd funding allows for people to put their projects up onto the internet, and solicit many small pledges for which they might offer rewards or inducements to achieve an overall funding target.

Crowd funding is not a recent invention. Back in 1885, Joseph Pulitzer (the editor of New York World) used his publication to raise funds for the pedestal of the Statue of Liberty which had recently been gifted to his city by the French. Over $100,000 (big money back in those days) was raised from the community, with the average pledge being just $1, to fund the pedestal on which the Statue was placed and proudly sits today. The inducement offered to those who pledged was the inscription of their name in the pedestal.

The most notable modern iteration of crowd funding came about in the late 1990s when British rock band, Merillion, wanted to tour the USA but did not have the finances. They were supported by fans who gave £10, £20, £50 and more to assist the band achieve its dreams. Over £60,000 was raised, and the band conducted a successful tour of the USA. On their return to the UK, they offered the fans who had supported them small rewards aligned to the pledges of support they had made – albums, tour jackets, posters, and the like.

Today, crowd funding is here to stay. Many say it is the next iteration of social media. Until around 2006, you could “like” other people, organisations and their initiatives. Simply click the icon, and you could become a supporter, very emphatically and very publicly. Crowd funding took this to the next level when you could reach into your pocket and like them to a whole new level, which involved your cold hard cash. And it was the perfect storm where micro-finance met the internet in the post GFC environment that saw crowd funding really take hold. All of a sudden, people could transfer money quickly and cheaply, and spread the word through social media, at a time when the requirement for cash was at its highest in history.

With the continued successes in the pledge model of crowd funding growing exponentially for around 10 years, much of the world started to consider the application of crowd funding in the investment space. To date, much of the world had not considered or permitted investment crowd funding, opting to protect mum and dad investors from losing their money in potentially bad crowd funding offerings. As a result, equity and financial returns were not permitted to be offered by crowd funding campaigns in many of the countries that allowed pledge model crowd funding to exist in an unregulated environment.

One notable exception to this was in Australia where, while broad scale equity crowd funding remained impossible due to legislation, small scale crowd funding was permitted. The Australian Small Scale Offerings Board (ASSOB) successfully sought exemptions and concessions under the law to be able to facilitate capital raising using crowd funding, limited to a maximum raise of $5mil from up to 20 investors in any 12 month period. Through this unique combination of exemptions and concessions, the world’s first form of investment crowd funding was born.

In 2013, President Obama signed the JOBS Act, part of which included changes to the legislation which would allow businesses to raise capital through the issue of equity via crowd funding. It was estimated that once the new laws passed into being, that there would be an injection of over USD $300bil into small business and start-ups, none of which would need to come from government coffers. Crowd funding was seen to be the solution which would democratise funding, and shift the need for governments to fund the early stage ecosystem, to the community (or “the crowd”) now funding new business as well as business transformation in the case of big businesses. While the USA was forming and shaping the legislative framework, the UK, regarded by many as the leading nation for investment crowd funding, was making it happen.

While many nations still are to permit investment crowd funding to be conducted as a broad scale vehicle for raising capital, many larger companies are positioning to be able to leverage off crowd funding to raise the capital they require. Pharmaceutical companies are already promoting their intention to crowd fund R&D into new drugs. Similarly, mining and exploration have expressed their intention to use this form of capital raising and share the upside with those willing to take the risk in supporting such speculative projects. Big business recognises crowd funding as a way to fund these high risk ventures without having to approach the risk-averse traditional funding sources, thus opening up the opportunity to undertake a broader range of exploratory business streams.

Big business is able to open up investment in specific parcels, divisions and income streams, and by using crowd funding as the vehicle to do so, further engage with the community in a manner that was previously unavailable to them. By offering the community a “slice of the action”, big business has found in crowd funding a way of bolstering their triple bottom line, and building strong sustainable bonds with local supporters. Without the high levels of compliance and paperwork but with more transparency and involvement, big business is able to utilise equity crowd funding to become faster, more flexible and increasingly fashionable in the eyes of retail investors, who will have the opportunity to speculate and invest using equity crowd funding.

Posted on October 21, 2014 By iPledg With 0 comments

Crowd Funding – Bridging the (Medical Benefits) Gap

iPledg - Logo - Low-ResolutionThere has been a lot of noise in the press lately about the government tightening its purse-strings and the effect on public health care as the current fiscal policy contracts. The gap between the amounts that doctors and hospitals charge and the amount that the government will cover is big and getting bigger, with moves being made to further decrease the government’s contribution to health care. But there is an answer, as crowd funding proves to successfully finance medical payments for those really in need.

The first ever successful campaign on iPledg was Help Barry. Barry had cancer and sought to head over to Germany for treatment. His initial goal was to fund the cost of travel, but given the wonderful support he received from family and friends by way of not just pledges but by them spreading the word through social media and email, Barry’s campaign was over funded and saw him well on the way to cover a genostics test to further help with his diagnosis and treatment.

The Rays of sunshine for Ainslie campaign helped Ainslie, who had been diagnosed with a complex brain tumour, travel from Perth to Sydney to meet with renowned brain surgeon Charlie Teo to assess and hopefully operate. With the duration of the visit turning out to be longer than expected, and the cost of accommodation, travel and the expense of the operation being more than expected, friends of Ainslie banded together to crowd fund the costs.  With the funding raised by this campaign falling reasonably short of their initial target, iPledg’s Tipping Point functionality really assisted. The Tipping Point sees the ability for a lower default amount to flow through to the project owner if they hit a much lower (pre-set) target. This unique functionality has helped campaigns on iPledg achieve a higher degree of success, which is particularly important to such health-related campaigns.

Choice for MaiaBrisbane mum, Rebecca, raised money on behalf of her 18 year old daughter, Maia, who  was diagnosed at age 16 with a high grade angiosarcoma of the left breast. She had already had a mastectomy and underwent radiotherapy to the area when, about twelve months later, Maia was diagnosed with secondary angiosarcoma on the lungs. She has multiple sites of cancer on both lungs. She underwent further radiotherapy, and chemotherapy, and is currently receiving a daily oral dose of a new and relatively untested drug which is intended to stop any more cancers from growing, but not impact on the ones which are already there.  Funding was raised for this life prolonging treatment, as opposed to curative measures. This was their only option under the current model of conventional cancer care in Australia. The aim was to raise $6,000 to enable Maia to take advantage of the GENOSTICS diagnostic testing as part of her treatment for terminal cancer. Fortunately, through engagement of a supportive community, family and friends, they achieved more than double their funding target, significantly contributing to her health care

Andrea is a sole parent to a beautiful 10 year old girl. Just when life was looking good, she was diagnosed with stage 3 colorectal cancer. The treatment for this condition includes 7 weeks of chemotherapy and radiotherapy, and then surgery, more before post-op chemotherapy and further operations. The whole process was estimated to require two years, during which Andrea would need to pay for her treatment up front, as Medicare would only partially reimburse expenses once Andrea had paid. Close friends of Andrea ran the campaign- Andrea’s healing journey – which raised $9,000 and helped Andrea bridge these costs.

Funding the gap between government reimbursement and the actual cost of treatment and care is not the only benefit of crowd funding when it comes to this sector. Rehabilitation and recovery, both for the patient and their family can be covered by crowd funding, and this is often as important as the true medical costs themselves. In his book, Will to Live, quadruple amputee Matthew Ames tells of his cancelled plans for the family trip to Disneyland due to what started as a sore throat resulting in the loss of all four of his limbs. He had contracted streptococcal resulting in toxic shock and was never expected to survive. Crowd funding could well offer a vehicle to get patients such as Matthew, his wife and four small children to bond and heal together by allowing them to live out such dreams. All it takes is the will to want to do it, and the committed team of supporters to make it happen.



Posted on August 28, 2014 By iPledg With 0 comments

Crowd Funding – Pledge or Investment, Understanding your Target Market

iPledg - Logo - Low-ResolutionBusiness 101 dictates that for any form of financial success, one must firstly identify their target market, and then understand the motivators to get the market to part with their money for the product or service generated by the business. The same can be said for those who run a crowd funding campaign, whether it ulitizes the pledge model or if it is for investment. Understanding the motivators is paramount to structuring a successful campaign and driving it to achieving the funding target.

Firstly, the pledge model. In many countries broad scale investment crowd funding is yet to be made permissible, so pledge model crowd funding is how many business now see they can get the seed funding they require to get moving. The pledge model means project creators cannot offer financial returns, investment, or equity as inducements for funders to pledge, so they need to get creative with their rewards, many opting for pre-sales at very attractive prices. The key motivators for the pledge model of crowd funding are quite clear and simple, and successfully tapping into these is the key to reaching and exceeding the funding target sought:-

  1. They know you and like you – The importance of “the first tier” or the family, friends and those closest to the project creator cannot be understated. These are the people that must first be engaged to give the campaign the initial momentum it requires. Usually, it is those that know you and like you that will simply support out of a desire to help the project creator get a “leg up” with their campaign.
  2. They are after one of the cool rewards – In the words of 80’s star, Gordon Gecko – “Greed is good”. Tapping into consumer greed and offering really cool, sought after rewards at great prices (or in return for a pledge that represents great value) is a proven way of getting the market engaged. This becomes a more “logical” rather than “emotional” strategy for getting funders on board.
  3. They are passionate about your cause or the outcome – Not all funders want a tangible return for their pledge. Many are good citizens who recognise excellent work being done to help animals, the homeless, the sick, etc and simply wish to help, and to see the stated outcome (some form of assistance or improvement to the situation) delivered to the person or group who is suffering, disadvantaged or who will ultimately gain by the successful outcome of the campaign and project.
  4. Social Kudos – People love to see their name in lights, in print, or (as has now been facilitated in the digital age) online. Public online recognition is enough of a motivator to get some people to pledge, especially if they see the person or cause to who they make their pledge as being one who will say good things about the funder, and say it “loudly” on social media.

Given the above summarizes the motivators for supporters of the pledge model of crowd funding, those that with to invest in equity crowd funding have a totally different set of expectations and requirements for them to part with their money.

  1. Team  – Investors want to see a strong team, covering all areas of strategic and operational management and involving experienced and credible individuals. Any gaps should be filled with a strong Board of Directors or possibly even supported by a committed Advisory Board.
  2. “Must have” solution – Backers need to be shown market relevance of the product, service, or business being funded. They want to see that the project for which funds are being sought will deliver a solution to big market problems.
  3. Customer validation and market traction – The likelihood of raising capital sought is largely effected by the progress that has been made by the entrepreneur. As the idea progresses from concept to proof of concept through to making sales, generating revenue and then profit, the “investability” increases as the market validates the need for the product and the ability for the company to make money out of the venture.
  4. Financial model and capital plan – A clear demonstration of how (and when) the venture will make money, and how much money is required to get there is paramount to showing potential investors that the way ahead has been carefully considered. Usually, such a plan will incorporate some form of business plan or road map to success.
  5. An ability to scale – Investors do not typically invest in businesses that are bound, geographically or in any other way that may hold back scalability. They like to see revenue targets projected for 3 – 5 years, and how the business will scale to have a broader (and more profitable) footprint.
  6. Clear exit – Those who invest are not going into the relationship to be there forever. They want to see how they can get their money back out, achieving a significant multiple of the funds they originally put in. Those raising capital need to outline their plans for a trade sale, MBO or PE exit for prospective investors.

Understanding the motivators for pledging or investing positions the person raising funds or capital to be able to write a good story that will resonate with their potential market, and it is this story, told well, to a large audience and with the right motivators or inducements that will lead to crowd funding success.

Posted on July 13, 2014 By iPledg With 0 comments

Crowd Funding – The Australian Government’s Failure to Deliver is Starving Small Business and StartUps

iPledg - Logo - Low-ResolutionThere is only one thing worse than inaction, and that is setting a promise, creating expectation and hope, and then failing to deliver. Add to that the act of removing alternative courses of action for the audience to whom you have made the promise, and it is an example of how to totally disenfranchise the group to whom you made your promise. That is exactly what the Australian government has done to the small business and startup sector with regards to equity crowd funding, and whilst it is hurting the sector, the true pain is yet to come.

In late 2013, the Corporations and Markets Advisory Committee (CAMAC) released a discussion paper on equity crowd funding in Australia, and sought written submissions about the matters they raised. They then promised to hold round table discussions with respondents in the first quarter of 2014 before settling the report. Well the sun is now setting on the second quarter, and as the third quarter dawns, we have little indication as to when this will be progressed and addressed (if ever).

Whilst our outlook is usually optimistic, this glum outlook is based on last month’s federal government budget, which included the axing of CAMAC. At the time of the budget being delivered, we were told that the government review of equity crowdfunding would soon be completed as the final piece of work before the Corporations and Markets Advisory Committee ceased to exist. At the same time, CAMAC executive director John Kluver said the review into crowdsourced equity funding was nearing completion. CAMAC was to report to government late in May and the report will be publicly available from early June, yet none of the respondents have been consulted or advised, so the process has been truncated, with critical engagement with the key stakeholders being seemingly removed from the process. And as at early June, none of the stakeholders have been advised that the latest deadline, that of CAMAC reporting to the government by the end of May, had actually been met or whether it was another disappointment of the failed process.

Repeatedly, the federal government has expressed they are open to enabling online equity-based crowdfunding in Australia to help encourage local tech entrepreneurs to stay rather than be lured to Silicon Valley. As a nation, we need to maintain our IP, and keep investment on shore. This is increasingly under threat as the rest of the world wakes up to equity crowd funding, while Australia continues to lose while they snooze. The talk last year of positive moves to equity crowd funding promised to retain wealth on our shores, and encourage entrepreneurship and job creation – all positive signs for Australians and the Australian economy.

There were also a number of related documents and discussions under contemporaneous consideration by the federal government, including:-

  • A submission from senior manager of regulatory and public policy at the ASX, Diane Lewis, which expressed concern about a “market failure” in Australia, where the venture capital market was not developed enough to fill the start-up financing gap, and where bank financing and public listings were not a feasible option.


  • Malcolm Turnbull, Communications Minister, was asked about the Coalition’s pledge to change rules governing employee share schemes, which make it unfeasible for Australian start-ups to emulate Silicon Valley players by offering stock options in lieu of high salaries to early-stage employees. His reply was clear – “We need to do more to encourage innovative companies in Australia . . . an obvious area is rectifying the anomalous treatment of employee shares and options in Oz”.


  • Last year, chief executives from Australia’s ­technology sector called on the government to speed up its ­deliberations on the matter, which have stalled since the Coalition won office last September.

It was the stalling that was creating anxiousness after the government promised so much. Their undertaking to address the matter, and CAMAC’s discussion paper on equity crowd funding in Australia, along with their promise to engage with the sector sent the message that they were serious about small business and start-ups. But since that time, we have only been delivered two things – inaction, and then the axing of CAMAC. Add to this the axing of other federal government assistance programs for small business and start-ups (such as Commercialisation Australia) and we find ourselves in a vacuum of disappointment, with even more motivation for innovators to head off shore to satisfy their needs.

At a time when there is such a thirst for small business and start-ups to receive a mechanism to raise funds, coupled with a government desire to divest themselves of funding programs and risk, there has never been a better time for the Australian federal government to address the issue of equity crowd funding, and for them to permit equity crowd funding to become permissible under law in Australia.

Posted on June 4, 2014 By iPledg With 0 comments

Crowd Funding – hints and tips to pre-launch marketing

iPledg - Logo - Low-ResolutionCrowd funding is all about preparation. Regardless of the efforts during a campaign, unless you have the necessary preparation in place, the hardest of work during a campaign can all mount to little. Like the army who amasses, trains, and focuses, crowd funding is more about what you do before your campaign begins rather than what you do during the funding timeframe. Whether it be the pledge model, or for equity crowd funding, if you build the crowd and engage them early, your chances of crowd funding success are greatly increased.

If you have ever watched street performers, the really good ones, they have mastered the art of building a crowd. They create a noise, then they engage the first followers to make more noise. Collectively they do all they can to attract others, and once they have critical mass, the show begins. Nothing starts until critical mass is achieved, because the performer knows there is no show without an audience.

The same can be said for crowd funding. Before any crowd funding can begin, the project creator needs to have a crowd to whom they can send their message, a crowd to engage, and the followers who will become part of the movement to spread the word. It is essential, in the modern age, to build a social media following. Twitter, Facebook, Linkedin, Pinterest, Google Plus are amongst the leading social media platforms, and anyone contemplating a campaign needs to ensure a solid following on these. As a rule of thumb, 10% of your total networks will pledge to a robust campaign. Starting with good numbers on each of these platforms will give you the greatest chance of success.

Blogging is also a great way to engage and build a bank of followers. Starting a blog related to the theme of the project you wish to fund can build your tribe around you. Some people, however, find writing and creating a blog too hard or out of their comfort zone. In this case, joining blogs, making comments, interacting with other participants on the blog, and getting to know the creator of that blog can all be helpful to building a following and engaging other likeminded people who may help you fund your project.

Some of the more “old-school” or traditional methods of building a crowd and engaging, and bringing people on board should not be discarded. An email database, pulling together everyone with whom you have ever interacted, is a good way of “talking” directly to an audience. Given you have interacted with them before, there should already exist a degree of familiarity and trust, so it is a good base to build on, letting them know of your planned campaign, and asking them to get on board.

And if you want to go even more old-fashioned, try actually talking (yes, chatting in a verbal way) with people and letting them know what your planned campaign is all about. Get them to share your excitement early. Work mates, college friends, sporting buddies, and even neighbours – tell them all about what you are planning and get them to come along for the journey.

There are various other tools that can help you engage an audience broader than you ever imagined. “Crowd speaking platforms” such as can amplify social reach and help get your proposed project out to thousands and even millions of people. Setting up a Thunder Clap can create a wave of attention and help your followers engage their followers, and have everything ready to go before your campaign begins, giving you a massive audience ready to join you at the starting line for your campaign. Along with Thunderclap, there are a number of other platforms that can help you reach out to a broader audience. Sites such as,,, and are all good tools for building a following prior to launch.

Part of building an audience is to have a planning session. If you are working solo, it is a quiet moment to work out who you could reach out to. If you are fortunate enough to have brought on friends or a team to assist you, this is a great think-tank session. Work with your volunteers and build them into your super-fans. Sit down and work out all of the people you can reach. It may be the people you know, are in your various circles, or people you have some form of interaction with. Your potential audience could then broaden out to suppliers, possible partners, potential customers, and likeminded groups. It is not about just who you know, but who could be interested in what you are doing, and this could come from many different areas. Make a (long) list of all of these people, and work out how best to talk with them (email, social media, phone call, etc). Then you can go about engaging them before your campaign begins.

Given that building your audience involves not just your first tier of fans, but the “friends of friends” and beyond, see if you can connect with anyone who is well known or a celebrity. We are not referring to Hollywood A-listers (although that wouldn’t hurt), but local celebrities, or those who are well known in industry circles related to the nature of your project.  Ask them to say nice things about your project. As with all announcements, don’t just make it about the money, but focus on the desired outcomes and the benefits these outcomes will bring.

And in the final days prior to your project going live, invite your followers to preview the project in VIP mode, giving them a special taste of what your project will offer.  Giving them a sneak peek and perhaps a special incentive for early adopters and first followers (making sure you tell them exactly when it is going live) will allow your project to fly from the moment it hits the pages of our chosen crowd funding platform.

Author, Bryan Vadas, is co-founder of iPledg as well as director of Time Masters (Australia) who are accredited capital raising sponsors with ASSOB. Contact him now if you are interested in either, or if you wish to deal with a single point of contact to take you from pledge-model through to investment crowd funding. This is the only place that can transition you through the whole process.

Posted on May 25, 2014 By iPledg With 0 comments

Crowd Funding – Safe, Efficient, and Effective Fund Raising for Schools

iPledg - Logo - Low-ResolutionSchools are constantly in need of funding to provide the best facilities and experiences for their students. Whether it is sporting equipment, shade for lunchtime seating, props and scenery for the school play, sending students to participate or compete in an event, or any of the many projects schools constantly have in process, there is a never ending need for funds to supplement the governments decreasing bursaries. So is it any wonder that crowd funding is now being seen as the most effective answer to schools obtaining the funding they need, and at the same time engaging the school community.

The current fund raising options are becoming tired and enthusiasm is waning as the efforts required for traditional fund raising far outweigh the funds raised. Selling fund raising chocolates ties up precious family time, and is also seen to be dangerous (allowing small kids to door knock and approach strangers on their own). Not to mention that it is usually the family of the child that ends up purchasing the chocolates themselves, and ending up with sweet treats way beyond the craving of any sweet tooth.

Fetes and other fund raising events require a mountainous effort by a few dedicated souls, so such forms of fund raising usually turn out to be quite inefficient. Seldom do any of the initiators of such events return for a second attempt, which is an indication of the difficulty associated with running them. Schools also need to contend with the fact that the great efforts to stage such an event can be undermined quite quickly by poor weather which can turn the best of intentions into a total wash out.

Crowd Funding now offers schools a quick, simple, and efficient way in which to raise funding for their projects, and astute schools will be quick to adopt regular or rolling programs to continually fund the projects that keep presenting themselves. Loading of a project onto a crowd funding site like iPledg takes just 10 to 15 minutes, and then the school can be raising funds. Communication to “the crowd” and continually driving the message takes no additional time to the standard day-to-day activities of the school, as informing the crowd is as simple as mentioning the campaign in newsletters, at assemblies, and in the regular forms of constant communication that schools undertake.

And there is such a crowd already in place at most schools. There is a broad audience with whom schools engage every day – parents, students, former students or alumni, local residents, sporting and special interest groups, and Parents and Friends Associations. Each of these simply needs to be made aware and constantly reminded of the campaign through the regular course of communication. Asking them to have a look at the project, to pledge their support, and to continue to spread the word to their networks allows for hundreds, if not thousands, of people to get involved and support the campaign – far more than any traditional forms of fund raising used by schools in the past.

At first glance, some schools may struggle to see what rewards they can offer to those who pledge support, but quickly one realises just how many rewards schools can so easily offer. Preferred seating at performances or sporting events, treats from the school canteen, or recognition through naming rights or mention on an honour board are just a few creative ways of rewarding those who pledge their support. Further engagement with the community can be achieved if some of the parents offer rewards from their businesses to those who support the school’s campaign, thus giving greater inducements to pledge.

Currently iPledg are looking for 3 schools to undertake a pilot program to show just how wonderful and successful crowd funding can be for schools. iPledg is not only offering to waive 100% of their success fees, but are also offering tailored and personal mentoring for the schools who opt in for the program, so they will guided and assisted through every step of the program, from designing the campaign, to promoting it, and to how to best wrap up a successful campaign to ensure maximum support the next time a campaign is run. If your school is interested, email now and start crowd funding your school today.

Posted on April 23, 2014 By iPledg With 0 comments

Crowd Funding – the Future Face

iPledg - Logo - Low-ResolutionA recent article in CrowdFundBeat by Paul Niederer of ASSOB took a look of what crowd funding might be like by 2020, both from an investment and pledge-model perspective. As with any good futurist’s work, the projections don’t say how it will be for sure, but raise some discussion points around how, from a church spire view of current proceedings, the landscape may look given the emerging trends and developments in technology. From how individuals refer to crowd funding to how corporations will use it, we see that the sector will be in great but markedly different shape by 2020.

The first big change will be that the word “crowdfunding” will have virtually disappeared as peer to peer transactions will have become the norm. The same thing will have happened with the term “social networking” as that’s just the way most people communicate now and few call it “social networking” – even fewer will do so over time.

One of the big differences between equity crowd funding and the pledge-model is the latter’s offer of instant gratification to those who support campaigns. In most cases, project supporters are sent something tangible immediately at the end of the campaign in return for their pledge, but in the case of the investment model, the investor holds hope until the business eventually turns a profit or the company is sold and a capital gain is realized. The future will see a shift to more instant gratification for investors in equity crowd funding models, with royalty or dividend based crowd funding becoming easier as costly and complex transactions will become quicker and cheaper to handle as the processes are automated.

There is forecast to be a shift from the initial adopters of crowd funding, moving from just startups or small business, over to large corporations who will quarantine regular and long term shareholders from the risk associated with R&D, and these will be crowd funded in separate issues or tranches. Funding R&D and marketing initiatives in this way would be particularly attractive to companies involved in pharmaceutical, green tech, clean tech, and food processing sectors.

Perhaps one of the greatest bonuses that will come over time will be the increased security and the reduced risk with online transactions and the general issue of shares on the internet. Improvements in facial recognition technology enabling authentication of parties relative to their internet history, or other forms of identity management such as those which include biometrics will make potential investors more able to find out all relevant details about the issuer, giving more comfort around the process of investing. Similarly whistle blowing, which is currently the norm in the world of crowd funding, will play a greater role as sites centralise known data.

The biggest leap in thinking from what we currently understand crowd funding to be will come with changes to how rewards are created or offered. In the future, rewards will be able to be contrived by the pledger / investor rather than being specified at the beginning of the campaign. This two way negotiation, once built into platforms, will take the relationship between project creator / issue and supporter / investor to a whole new level and a market for rewards may develop.

Not unlike the Olympic motto of “Faster, Higher, Stronger”, crowd funding will become faster, more efficient, easier, and increasingly cost effective as computers will do more of the work around investor matching and documentation. Automation will be the key, especially with investment crowd funding where driving out cost and improving the speed of capital raising will be realised through computer-generated processes.

And this all leads to a better, safer, more engaging, and successful experience for all concerned. As in Paul Niederer’s words – “A glimpse at the future … and it is all good!”

Posted on March 19, 2014 By iPledg With 0 comments

Crowd Funding – Assisting With the Delivery of No Interest Loans Schemes

iPledg - Logo - Low-ResolutionThere is some wonderful work being done in our community, with not for profit organisations providing No Interest Loan Schemes (NILS) to those that struggle at times to make ends meet. Such programs provide solutions to those in need, at the same time allowing recipients of NILS grants to maintain dignity and integrity. Many such organisations are provided seed funding by philanthropic organisations, but their ongoing presence needs to be funded by community engagement and continued fund raising. This then sets up a perfect fit with the benefits that crowd funding can provide, both in the short and longer term.

Organisations like Good Shepherd Microfinance offer people on low incomes loans and other people-centred financial programs across Australia. They enable people to define and then to realise their own economic well-being and to feel valued and in control of their finances and lives. Clients will approach them looking for a loan for such things as washing machines, fridges, school fees, etc. To be eligible they must be on some form of Health Care card, government pension or be a low income earner. They are interviewed by one of the loans officers who help them fill out a budget to make sure that they can afford the item and avoid putting any further financial stress onto them. Once approved, the maximum lend is $1,200.

Initially, organisations like this are funded by larger, commercial entities, government grants or philanthropists who often provide the cash required to set up the opening loan pool. Whilst this allows the NILS program to get started, there are ongoing costs. Many such organisation run on part time staff members, supported by volunteers. Then there is the challenge to find the money for wages and admin costs (rent, phone bills, stationary etc). Without the budget being topped up occasionally, many would be at risk of having to close down.

Crowd funding offers a real, effective and comparatively fast way of funding the costs of running such schemes. Organisations can now set up a campaign in a matter of minutes and start to send out news of the campaign through the internet and social media. Many people are unaware of the existence of such schemes, so it is something to which people are receptive, and it is a story that makes great reading. Also, the mechanism of most crowd funding platforms makes pledging support or donating far simpler, easier, and less cumbersome than the current (old fashioned) online forms that many organisations are still guilty of using. With the added benefit of the project creator being able to embed the project badge onto their website, raising funds is even easier, in that visitors to the site can simply click through to the campaign and make their pledges straight away, and these are then reflected on the project badge in real time.

And with the availability of the Tipping Point functionality with sites like iPledg, campaigns can be set up with their funding target (e.g. $30,000) but with a tipping point of around 10%, meaning that if the campaign hits just 10% of the target, then any funds raised will pass on to the organisation. Most campaigns on crowd funding sites are “all or nothing”, meaning that the funds raised pass to the project creator at the end of the campaign but only if the funding target has been met or exceeded, but in the case of the Tipping Point, charitable organisations are able to collect the funds raised if they hit at least the low, pre-set tipping point.

Rewards are always an inducement for people to pledge, but in the case of such wonderful community work, the need to give a tangible reward is replaced in the main by offering simple recognition to project supporters. Offering people the reward of having their name put on an honour roll, sending out photos and letters of thanks from the program recipients, issuing certificates and naming rights are just some of the rewards that can be offered. There is also the ability to offer a tax deduction should the charity have Deductable Gift Recipient (DGR) status. In such cases, care should be taken to not offer tangible rewards in return for pledges, as this may jeopardise the organisation’s DGR status.

Once the story is well articulated and the rewards sorted, it is a matter of having a plan for getting the message out to the community and to the world. Whilst social media is the ultimate medium for spreading the word, more traditional methods of communication should not be overlooked. One should consider communication to the network of the philanthropists who initially assisted with the set up of the orgainsation, as well as local councils who are usually very supportive of such programs. Approaching local television, print media and radio with a great community-based story as well as the unique way they are raising funding through crowd funding is usually well received and coverage almost always given.

With programs like iPledg’s Heart On Our Sleeve campaign, the time is perfect for organisations delivering NILS programs and microfinance to try crowd funding for themselves. iPledg are currently waiving their success fees for projects that meet or exceed their funding target, so not only does it cost nothing to put a project up on iPledg, project creators can apply to have the regular 5.5% success fee wiped. The only fees associated with fund raising in this way are the third party transaction fees of a couple of percent. With a view to help further, iPledg is also doing what they can to spread the word about community projects through social media, their newsletter, and their extensive database.

Posted on March 4, 2014 By iPledg With 0 comments

Crowd Funding – Keeping Investment, Equity, and IP On Shore

iPledg - Logo - Low-ResolutionBy virtue of the fact that governments exist to protect their own, investment in high risk start ups often comes from foreign shores, where investors are not protected by the laws of the land from which the innovation originates. Whilst the government protects the retail investor, the entrepreneur and the local economy in general dies a little with each foreign investment made, with future profits moving off shore and little likelihood of reinvestment in the local economy. But as broad scale equity crowd funding becomes permissible, we will see retained knowledge, profit and investment in the country where innovation originates.

Put simply, for every percent of ownership that is currently sold off overseas, one dollar of every hundred of profit made seeps out of the economy, rather than being retained on shore to reinvest to fund jobs, further innovation, and to improve the greater economic health of the local financial system. If enough equity is sold off to foreign ownership, control can pass from the innovators and founders to overseas parties with little regard for or knowledge of local trade and industry.

The challenge facing many governments is how to open up local investment to the retail sector, broadening the pool of funds available to fund innovation and entrepreneurial ventures, but maintain a cap on the risk exposure to these same unsophisticated investors. At the same time as the governments ponder a solution to their dilemma, little stops investment in start-ups coming from overseas. Whilst it can be rightly argued that foreign investment does get businesses moving, the view is relatively short-term and narrow sighted, as the immediate benefits are quickly outweighed by medium to long term losses.

However, many governments have an option available to them that will see a sizable pool of local investment funding made available for innovation and start ups. Through the change in laws to allow equity crowd funding to be available to a far broader section of the community, governments will release potentially billions of dollars to get the economy moving and thriving from the grass roots levels and upward. The US government recognised two years ago that by making it permissible for equity crowd funding to be come into being, an estimated $300bil would be made available to small business in the first year alone. Whilst most other economies are nowhere as large as that of the USA, across the world governments have recognised relatively similar large pools of funding available to their own economies.

In a post GFC world, governments are increasingly under fiscal pressure to provide to the communities they serve, but in many cases they are required to do so with lesser revenues. With equity crowd funding, governments have a mechanism that takes the onus off them to provide funding for small business and start-ups, and provides them some relief to their balance of payments dilemmas. President Obama has often stated that the JOBS Act will provide funding into sectors to levels that the government could never commit to with any certainty or sustainability, and provide far reaching economic benefits that would have a profound impact on the broader fabric of the US community.

Governments around the world are realising that the best thing for their economic well being is to allow broad based equity crowd funding to become a practice allowed for under a change of laws. The USA is on the verge of giving the green light, with a rolling start well underway. In Australia, the Corporations and Markets Advisory Committee have called for input from industry to get buy in from the sector as to the best framework for equity crowd funding. Many other countries have either just initiated equity crowd funding or are doing the same as Australia and the US, and are preparing the legislation around how to best protect the market whilst not stifling innovation with compliance laws that are too onerous for many start-up ventures.

Broad based equity crowd funding will allow for the core of funding to come from local sources, to then be supplemented by foreign investment. This will see a turn-around in the current situation, and ensure the benefits of innovation remain firmly in the lands that put so much into the development of idea, product and ingenuity.

Posted on February 26, 2014 By iPledg With 0 comments

Crowd Funding – Removing Risk from Starting Your Own Platform

iPledg - Logo - Low-ResolutionThe growth of crowd funding has attracted many, keen to jump in and make a quick buck. They see the attraction of the mega-bucks being raised by the industry as an allure to make some easy money. Sadly for many, the unexpected costs of set up and operation all get too much, and we see almost as many sites falling by the wayside as there are start-ups in the crowd funding space. But now there is a way to test the waters and get set up at a low cost, and with an income stream from day one.

The cost of establishing a crowd funding site is usually far greater than most people estimate before they venture into the project. It is where programming meets marketing meets project management meets design. Rarely are all of these talents available “in house”, which means there is cost associated with getting up and running if you are to do it properly. Sure, there are cheap alternatives for each of these, but as Confucius say – “good thing no cheap, cheap thing no good”. Many have tried the cheaper, off shore alternatives, but many would revisit that exercise, given the extra time, energy, and cost required to deliver a sustainable and stable result. And then there are the ancillary costs and activities like legals, finding a workable payment gateway, and many of the “unforseens” that must be considered and costed into the equation.

Not only is there the costs of getting up and running, there are the constant overheads of maintaining the system, administering the site, and tending to the countless technical queries associated with the back end.

Then one must consider not only the expense side of the ledger, but the revenue required to make the whole venture profitable. The margins are typically low (around 5% gross). If we consider that about 45% of campaigns meet their funding target, just $450,000 will be funded for every $1mil of campaigns that list. At 5%, that means $22,500 gross revenue for every $1mil that lists, assuming that the site achieves the industry standard from day one, and assuming that they can get to $1mil of listings in the first year. Even if this stretch goal is achieved, the $22,500 needs to fund hosting, operational costs, external skills, and a heap of other expenses before the platform owner draws their modest income.

But now there is an option, offering a low cost of entry, and no other out-of-pocket expenses. In fact, there is a positive income stream from day one….

iPledg now offers to partner various organisations to set up an income generating crowd funding platform. Most organisations should focus on their core business or activities, and this is the key to them achieving crowd funding success in partnership with the iPledg model. The concept is quite ingenious, and allows the organisation to concentrate on doing what they do best, as iPledg administers a customised platform to the benefit of the organisation.

iPledg charges a one-off, low cost fee, allowing the organisation to have set up for them a clone of the iPledg site, using the iPledg engine and functionality, but with the organisation’s own livery, wording and images. The organisation can then assist its members, and utlisize the reach and strength of their crowd to fund all sorts of campaigns within its scope. They need not worry about running the back end, allowing them to focus on interacting with their crowd, their members, and their regular audience, as iPledg continues to operate the site itself. The partner organisation simply feeds the front end by bringing projects to the site through its regular course of business. And the best part is, the organisation gets half of the gross revenue of the site!

Picture this – You have a sporting club, with many teams and a heap of members. For a small upfront fee, you could have a crowd funding site set up and for you. You then get your teams and community to list their projects on your site. You then promote the site to your members and fan base for them to support the projects, and you encourage your project creators to do the same. Nothing more to do, just keep engaging with the people you already deal with (and you’ll have more reason for them to deal with you!) – iPledg runs the site for you. Each month, you then get a payment for half of the gross revenue generated by the success fees. That’s right! The gross revenue, so iPledg absorbs all the costs of running the site for you.

So instead of now costing tens of thousands of dollars to get going properly, any organisation anywhere in the world can get into crowd funding for a nominal fee, and then start to enjoy profits from day one – no extra costs, no headaches, and no aggravation – they just keep talking to their crowd in the same ways that they did before (and iPledg will even give them some coaching). It is through such wonderful innovation as this that anyone anywhere in the world can embark on being a success in the area of crowd funding for their creative, commercial, charitable or community initiatives.

Posted on February 10, 2014 By iPledg With 0 comments

Crowd Funding – The Pathway from $1 to $1mil

iPledg - Logo - Low-ResolutionWhilst there have been some great successes in the world of crowd funding, the pledge model works best for those seeking up to $30,000. This is wonderful to kick start an idea, but in many cases this isn’t enough to allow the dream to fully blossom. Pledge model crowd funding provides the starting rungs on the funding ladder, but there still seems to be a gap between that and “the big money” – a gap hoped to be filled by equity crowd funding. There is now one place where project creators can get a seamless transition all the way through both.

iPledg was originally conceived by founders who are active in the commercial world. They recognised that there was a gaping hole at the bottom of the funding ladder when it came to small businesses and start-ups accessing funding to get their ideas going. They recognised the answer lay in crowd funding, and given that broad scale equity crowd funding is not yet available in Australia, they set up iPledg on the pledge based model. This then allowed project creators potential access to early stage seed capital without the need to take on loans or without giving away equity at the very early and highly speculative stage of the business life cycle.

Whilst it is not yet possible in Australia to raise funds from dozens of unsophisticated, retail, or “mum and dad” investors, equity crowd funding does exist and actually has existed in Australia in one form, longer than anywhere else in the world. The Australian Small Scale Offering Board (or ASSOB) has operated a cutting edge equity crowd funding platform for 8 years, having successfully raised over $137mil in that time. Whilst the laws are fairly stringent around how funds can be raised in this way, it does operate with sufficient bandwidth to allow a business to go from genesis to serious funding and get well advanced in the business lifecycle. ASSOB can take businesses from where pledge model crowd funding traditionally leaves off, and help them raise up to $5mil capital per year, as well as preparing the founders for IPO, both financially, as well as the disciplines and mindset.

So far, there has been no singular pathway straddling both pledge model crowd funding right through equity crowd funding and through to IPO. That is, until the founders of iPledg recently became recognised ASSOB sponsors, providing the market for the first time a single channel of capital raising from $1 right through to millions of dollars. Start-ups and small business can now do their pledge model crowd funding under the guidance of iPledg, and then go on to start equity crowd funding under the tutelage or the same people that were there from the start – surely a world first!

And even more exciting is the way in which an iPledg campaign, using pledge model crowd funding, can be used to raise the funding required to cover the cost of equity crowd funding. In effect, it is now possible to run a pledge model crowd funding campaign, giving away product, services, or anything to get people to pledge (perhaps even offering to do household chores if the founders had nothing else to give) to raise the funds to cover an ASSOB listing.

With the familiarity, trust and knowledge of the founders requirements, there is no longer the need start again when it comes to the more advanced process of capital raising through the issue of equity. The folks at iPledg simply switch hats and continue the founders on their journey, now using the ASSOB process of getting investor ready. The fundamentals remain the same throughout – a good story, told well, with a strong team, and delivered on a strategy on how to build crowd to whom to appeal, as well as the best avenues for approaching them to offer equity (as opposed to rewards as done in the early stages through pledge model funding).

With the founders of iPledg now having developed a strategic alliance with ASSOB, they are now accredited sponsors for the equity crowd funding process in Australia. The founders of iPledg are the only ones to have bridged the two worlds of pledge and equity crowd funding, and as such are able to take project creators by the hand and guide them through the process from raising their first dollar, to raising the millions they may require. A truly unique offering, and one that will deliver to start-ups and small business a seamless pathway of funding from commencement to larger commercial success.

** To find out more about how you can raise the capital you require through either pledge-model or equity crowd funding, send your enquiry to iPledg

Posted on February 5, 2014 By iPledg With 0 comments

Crowd Funding – Lessons Learned in 8 Years of Equity Crowd Funding

iPledg - Logo - Low-ResolutionAs the equity crowd funding fraternity prepares to enter the starting blocks or (at best) begins emerging from them, there is one organisation which has years of experience under its belt, and from whom the rest of the equity crowd funding world can learn. Some say the shortest distance between two points is a straight line, but many would argue that the quickest route to any destination is a well worn path, as a straight line may include having to navigate some tricky and slow terrain. It is ASSOB (Australian Small Scale Offerings Board) from whom much can be learned.

ASSOB has been funding startups through equity investments since 2005. Deemed “Small Scale” due to issues being limited to only 20 unaccredited investors per year, offers are not limited when it comes to accredited and overseas investors. The relevant regulators strictly monitor all activity on the site, especially around the issuer and the way and the extent to which they accept investment from unaccredited investors. As such, issuers need to ensure they choose the 20 largest suitable applications to get the greatest leverage under the regulations.

This may not be entirely the same as the equity crowdfunding emerging in the U.S., but since 2005 when they decided to take an offline unaccredited and accredited capital raising business online, ASSOB has had eight years of experience which has seen over 300 raises with more than 2,500 investors having invested, and nearly $140 million has been raised to date. During this time, they have addressed many of the concerns that are only just now being considered by countries hoping to change their current legislation to allow for equity crowd funding.

ASSOB has set up internal probity measures such as legal monitoring for people, entities and offering compliance, appointing trained sponsors (like Time Masters Pty Ltd) to guide issuers through the capital raising process, and templated many of the processes to make it easier for capital raisers. In addition, they have helped shape the equity raising landscaping in Australia by lobbying and engaging with regulators to build an environment that allows for capital raising in a controlled yet not onerous environment.

Despite this, there have been some key learnings in all of those years, with all of the raises, and with all of the funds raised. Perhaps the biggest matters uncovered include not initially having oversight of the issuers share registry, originally thinking it could be all done online, and expecting issuers could manage large parts of the process themselves. Just as many companies currently starting to embark on running equity crowd funding platforms are finding out about these problems, ASSOB has had years of addressing these issues, and have developed workable, equitable solutions.

At present the average investment per investor on the ASSOB platform is around $30,000. Like many other countries, Australia is considering changing regulations to allow for broad scale equity crowd funding. With such proposed changes, it is hoped that the number of unaccredited investors per raise will move from around 20 to 100 or 200. This will allow platforms to scale and that is where the capital raising sector will change forever.

Already, some of the more astute platform operators around the world are realizing the benefit of experience in getting early and profitable traction in the equity crowd funding space as their governments allow it to come into being. ASSOB has already licensed the platform to in the USA. They will be using the ASSOB capital raising engine, but their implementation will be different than ASSOB’s — understandably so. Each country’s legislation will vary slightly, so whilst the skeleton of the platform remains the same, the way it is fleshed out will need to be altered slightly in each case.

Despite the access to experience of operators like ASSOB, equity crowd funding will always carry some uncertainty and hope. The investor hopes that when they invest they will get their money back or better, but it is uncertain as to when this will happen. As with all investment, there is a degree of risk that needs to be recognized by all parties – regulators, issuers, investors and platform operators. But whilst such risk will never be completely eliminated, it is through recognizing and adopting the practical experience of organizations like ASSOB that risks can be mitigated and the equity crowd funding experience can be more successful and enjoyable for all.

Posted on January 28, 2014 By iPledg With 0 comments

Spousal relationship Linking Mini AND MACRO LEVELS OF Financial Efficiency.

Spousal relationship Linking Mini AND MACRO LEVELS OF Financial Efficiency.

Micro business economics is generally the actions guys and merchants make with respect to allocation of guides and costs of products or services. Macro monetary however research studies the behaviour associated with the current economic climate in its entirety including gross federal supplement.Continue Reading

Posted on January 15, 2014 By Bob With 0 comments

Crowd Funding – Money For Your New Year’s Aspirations

iPledg - Logo - Low-ResolutionThe start of a New Year. For many, this means new resolutions to lose weight or quit some vices that are no good for you. For many others, a new year heralds a brave new world, and the chance to chase new passions, or those that have been lingering for some time. Regardless of the dream, aspiration or goal, many of them require funding in some form. This is where crowd funding now offers to turn dreams into reality for 2014, and provide the cash you need to make these dreams come to life.

For most people, New Year’s resolutions just don’t work. They end up being simple promises that a person makes to themselves, and these commitments seem to go as quickly as they came about – a flash in the pan as it were. Statistics indicate that almost half of us make New Year’s resolutions, with some of the most common themes being related to finances or goals, or both.  The truth is that 25% fail to see out the first week of the New Year, over a third of them drop away before the end of the first month, and 54% of New Year’s resolutions have all but evaporated by half way into the New Year. And those who make New Year’s resolutions don’t just tend to make one, but 67% of those who make these self promises make three or more.

But why do so many New Year’s resolutions fail so quickly? Experts feel that the reason for the failure of these resolutions is that most people do not back their resolution with proper planning. There is also very little in terms of motivation from peers to keep interest and focus at the necessary levels for success. Crowd funding now offers the missing components to not only fund your resolutions, but to keep commitment and focus.

Starting a crowd funding campaign now with pre-campaign work allows for those with New Year’s resolutions to get their crowd engaged and ready to help. Preparing the crowd is integral not only for crowd funding success, but also gets them ready to keep the project creator focused. The crowd supports the campaign, as well as keeping the project creator committed to achieving their goal, and not allowing them to drop off, as is traditionally the case with New Year’s resolutions.

Once underway, a crowd funding campaign is a great way to measure and monitor success. Most platforms will have a mechanism or visual indicator of how the fund raising is progressing towards its target. Project creators and those who support campaigns can easily see how much has been raised, as well as what percentage of the target has been achieved. There is constant motivation as supporters urge the line to move to the right towards the total, possibly even contacting other people to get behind the campaign and give impetus to the chase for funds.

New Year’s Resolutions can be broken down into achievable, bite sized pieces through the use of crowd funding. The campaign marks the first phase or the initial success before the project (or subject of the New Year’s resolution) itself actually begins. By the time the project creator starts to “cut wood” they have their crowd in place to keep them focussed, and their funding campaign successfully achieved to ensure motivation is maintained. Through doing it this way, project creators have a far better chance of achieving their resolution for the New Year.

To all, a Happy New Year from all at iPledg. Here’s to funding your passion and living your dream supported by crowd funding in 2014

Posted on January 8, 2014 By iPledg With 0 comments

Crowd Funding – The Campaign They Call “Christmas”

iPledg - Logo - Low-ResolutionSanta needs a new sled. And with less sleeps to Christmas than you have fingers or toes, he needs the help of the crowd to get into the Christmas spirit and support him in his initiatives. This year, Santa is turning to crowd funding to help deliver Christmas cheer around the world, and he has put considerable thought into his campaign (in fact, he made a list and he checked it twice!). And now Santa is embarking on this year’s most ambitious campaign of all.

Santa has spent much time researching his target audience. He sees when you are sleeping, he knows when you’re awake. He even knows if you’ve been bad or good (so be good, for goodness sake!).  As with all good crowd funding campaigns, Santa doesn’t just know his target market, but he has them well organised on social media. If you look him up, you will see he has 122,000 friends on Facebook (but actually!!), and whilst there are many impersonators, the “Official Santa” twitter profile has over 387,000 followers. Indeed, the big fella has organised his crowd really well.

Santa has built a team to help him get the word out. His elves work his campaign from sun up to sun down. He has his helpers in most shopping centres in the western world, making sure his campaign is top-of-mind. He even has a band of hooven helpers – Rudolph, Dancer, Prancer, and all to help him after his campaign ends so that he can deliver his rewards around the world.

In fact, Santa has been creative in his campaign. He has changed up the rewards, renaming them “presents” for anyone who supports his campaign. Santa has managed to put together a wide range of rewards (ooooopppss………”Presents”) and typically, the more you “pledge”, the bigger and more wonderful the present will be. And in typical magical style, Santa has made it that you need not only pledge online, you can pledge in stores, and even in the workplace. Unlike any other, Santa’s campaign has yet another twist – the delivery of rewards is also dependent on whether you’ve been naughty or nice!

This campaign is a short one – it ends on Christmas morning. However, you can be assured of a quick delivery of the rewards. Despite there being 2 billion children (under 18) in the world, Santa only appears to 15% or 378 million. At an average of 3.5 children per household, that’s 91.8 million homes. Santa has 31 hours of Christmas to work with, thanks to the different time zones and the rotation of the earth. This works out to 822.6 visits per second. Santa has 1/1000th of a second to park, hop out of the sleigh, jump down the chimney, fill the stockings, distribute the remaining presents under the tree, eat whatever snacks have been left, get back up the chimney, get back into the sleigh and move on to the next house. This means that Santa’s sleigh is moving at 650 miles per second, 3,000 times the speed of sound. The big guy really does work hard for his campaign supporters!

So jump on board Santa’s campaign. Become a supporter of “Christmas” and spread your Christmas cheer. Remember to be good, pledge whatever you can to supporting Christmas, and wait for your rewards with joyful anticipation.

Merry Christmas and a wonderful new year from all the team at iPledg

Posted on December 16, 2013 By iPledg With 0 comments

Crowd Funding – For the Love of Beer

iPledg - Logo - Low-ResolutionMany credit the development of equity crowd funding to beer. It wasn’t that some guys had consumed too much and came up with an alcohol-induced idea to raise funds in a way that had never been done before. It was the sale of shares in a beer company that caught the eye of the SEC which, when fanned by the Wall Street Journal, became the catalyst for the inertia of crowd funding worldwide. Today, things have gone full circle as project creators use crowd funding for their beer-related initiatives, and project supporters are enjoying some wonderful rewards.

The move to investment crowd funding came in 2008, when American beer company Pabst Blue Ribbon put itself up for sale for $300million. One clever social media marketer, Michael Migliozzi, thought it was the chance to run a brilliant social experiment, and tweeted, “Why don’t we crowdsource this?” Five days later, he launched Within two months, he had not only raised $210 million in pledges, but he had also raised the attention of the SEC. In March 2010, the SEC contacted Migliozzi about the “joke” which they saw as less than funny, because the investors funding the Pabst buyout attempt were regular investors, not accredited investors, and at the time, US law prohibited regular investors from participating in these kinds of deals. But in addition to the social experiment getting the attention of the SEC, the Pabst buyout attempt got the attention of the Wall Street Journal, and the publication wrote an article about the online buyout attempt soon after. And with this, the spotlight had been cast on investment crowd funding, giving it the initial impetus that it needed to now get it into law in the USA.

Today, crowd funding is used worldwide, with the pledge model being the most commonly and widely used. And crowd funding seems to have stayed loyal to its roots, with beer-related project now cropping up in various forms around the world.

US Startup, Zephyr, is currently at 10% of its $15,000 goal to jumpstart operations. It hopes to commence operations around March / April 2014, and has turned to the crowd to fund their launch. Zephyr has leveraged off the well sought after rewards to inspire the crowd to pledge, and their perks include: a Zephyr pint glass, a sticker, a magnet and a free pint for $20; a limited edition T-shirt and a free pint of beer every day for an entire year for $300; and, for larger contributors, the company is giving the option to have their very own beer on tap in Denver, as the buyer and a friend can join Zephyr Brewing Co. on a brew day to participate in a 7-barrel brew. This campaign is proving absolute heaven for beer enthusiasts, who are pledging to get great rewards at wonderful prices, as well as to be part of the local community of beer connoisseurs who will share in something unique and special.

Half a world away, U-Brew It has embarked on a similar campaign, but this well established franchised company is hoping to raise $60,000 to take its company to the next level by exploring new marketing opportunities. They too have leveraged off beer drinkers’ desire to get their hands on a cool, refreshing ale, whether it be through one of their club memberships, during a tour of their microbrewery, or some of their great product that replicates the taste of some of the big brands (at a fraction of the price for those who pledge). The project supporters are also able to benefit from getting the rewards, not once, but over a number of years, just for making a single pledge to this campaign. U-Brew It emphasises the community-mindedness around the micro-brewing concept, and promote their beer as a healthier alternative to the mass-produced, commercial ranges that most people are more familiar with. They claim to also have a reasonably priced (and reasonably tasty) gluten-free beer for coeliac beer lovers.

So it seems crowd funding has come full circle, and continues to return to its roots in beer. And at Christmastime, whether in the scorching Aussie summer or the cold northern winter, it is the time when a nice cold (crowdfunded) beer is just what the doctor ordered.

Posted on December 10, 2013 By iPledg With 0 comments

Crowd Funding – Starting from Scratch with CSEF

iPledg - Logo - Low-ResolutionImagine you could create something, from the very beginning, limited only by your imagination, but with the benefit of the learnings from experts and their experience from around the world. You have full view of the mistakes that others have made in the past – the benefit of 20-20 hindsight before you put pen to paper.  How good would your creation be? Well, this is the situation that Crowd Sourced Equity Funding (CSEF) finds itself in Australia, and presented with a blank canvas, the regulators there (like many around the world) find themselves in a privileged and wonderful position.

Two months ago, CAMAC (The Corporation and Markets Advisory Committee), called for submissions regarding CSEF as part of the federal government independent review Advancing Australia as a Digital Economy: An Update to the National Digital Economy Strategy (June 2013). Major players and supporters of the industry, as well as interested parties, lodged their views, suggestions and concerns, and helped to build the patina on which the industry framework would be considered in Australia.

The primary considerations of the review included increasing the scope and market breadth to fund start ups and small business, investor protection (especially the “mum and dad” or retail investors), and ensuring that the costs of funding and subsequent compliance do not outweigh the benefits or the gains of CSEF.

Given the existence of CSEF in various forms around the world for a number of years, CAMAC outlined the many practical and working options of CSEF in operation. Most of the “heavy lifting” in terms of the framework has been addressed in one form or another, so the components exist for the Australian regulators to choose from to define their regulations. Examples of existing and proposed laws were cited from the USA, the UK, Italy, Canada, and New Zealand, and respondents were able to pick the good, as well as critique the components that may need adjusting for the Australian market.

To add to the smorgasbord of options, Australia also has the experience of the Australian Small Scale Offerings Board (ASSOB) who has more years of experience in CSEF than any other company in the world. With local knowledge relative to the local market, combined with many of the learnings from platforms and frameworks from around the world, there is no need to re-invent the wheel, but simply make incremental changes to the existing provisions to deliver the desired outcomes of CSEF.


Concerns, discussion points, and suggestions for issuers, or those who post projects on a crowd funding site offering equity for investor support, included such things as the definition of different types of issuer, suggested scope for the amount of money they can raise and from how many people they can raise such funds, structure of the issuer’s entity, costs of issuing and compliance, reporting framework, foreign participation, discussion about bad actors or those who have previous indiscretions with the law, as well as assessing risk from the perspective of the entrepreneur.


Protecting the investors is a primary consideration in the establishment of CSEF regulations. Defining the types of shares, as well as the different types of investors is key. Thought also had to be given to foreign ownership and how it is handled. Investor limitations, tax issues, acknowledging risk, tag along rights, and secondary markets are all considerations that need to be dealt with in the process of formulating the regulatory framework around CSEF.


Those with interests in operating platforms on which CSEF offers will be conducted gave their feedback on how intermediaries should be regulated and considered under the proposed laws. Licensing, pecuniary interest issues, disclosure, public solicitation, reporting, and transparency were all matters for which comment was invited. Some offered advice around minimum operating standards, share issue and share transfers, as well as dispute resolution. The mention of a Bad Actors Provision was also discussed in light of intermediaries as it was with issuers.

All of the submissions are now in, and CAMAC is giving due consideration to the information and suggestions offered in each one. The next step is a round table discussion to happen in the New Year, to which all respondents will be invited. And it is from this pending round table discussion, with so much input, global experience, and a collegiate approach, that we should have a wonderful solution for the government to implement in the not too distant future.

For those who wish to read the our submission please go to$file/Bryan_Vadas_iPledg_CSEF.pdf

Posted on December 4, 2013 By iPledg With 0 comments

Crowd Funding – Underwriting the MOQ

iPledg - Logo - Low-ResolutionWith business start-ups or small business transformations, there is always a considerable amount of risk associated with taking the leap of faith with initial stocks or committing to an event which, if not presold or if sufficiently subscribed, can spell the death knell very early in the life of the idea. These types of speculative ventures can now be de-risked, and market proof validated before the project creator starts to “cut wood”. Crowd funding offers a way in which innovators and entrepreneurs can seek commercial validation and pre-commitment before they need to commit to spending a single cent themselves.

China is widely recognised as the workshop of the world, manufacturing consumer durables, components and just about every tangible item that one could imagine. Their success has been achieved by being able to produce en masse and thus, the production costs are driven down. The upside to the consumer is product being made available at a reasonably inexpensive price. The downside to the innovator is the requirement to take a complete production run, especially if it involves the factory tooling up to produce something new. This requires the innovator to back their gut instinct with a commitment to purchase and fund the minimum order quantity, usually without having made the presales to cover the costs associated with taking this initial step. If they get it right, there is the need for pre-funding as the manufacturers will not start production without a deposit, and certainly won’t ship product without full payment. And if the innovator gets it wrong, they will surely be sitting with a lounge room full of unsold product, as well as a sizable hole in their cash flow, often enough to stop the entire venture at that point. The dilemma is how does the entrepreneur fund the initial costs, and get comfort that they will sell enough product to at least cover the minimum order quantity (MOQ) required by the manufacturer. The answer is found in crowd funding.

Startup company, Mech Tech, experienced these dilemmas in their initial venture to make customizable android tablets available in the Australian market. To achieve any sort of economies of scale, they needed to commit to the MOQ of the factory. Due to the CEO and founder of the startup being just 14 years old, seed funding was nonexistent. There was also the risk that if a financial backer could be found, what guarantee could Mech Tech give their financier that the stock would be sold and a return realised in a reasonable amount of time. The solution lay in their crowd funding campaign on iPledg.

It costs nothing for a project creator to list a project on a crowd funding platform. Apart from the effort and time required to run the campaign, there are no further costs to the innovator until the funding target is reached or exceeded, making the process self funding. A successfully funded campaign assures that a result is delivered before any costs are incurred. With the “all-or-nothing” model, project creators are able to set the target to align with the costs of their minimum order or outlay – e.g. achieve the funding target and be covered to meet the manufacturer’s requirement for minimum orders, fall short and the project creator does not need to proceed. On some platforms there is also a tipping point which allows the project creator to cover costs or requirements for the minimum viable product.  If the project creator doesn’t reach the tipping point as a minimum, nothing goes ahead. In the case of a successful campaign, market validation is received and presales are made before commitment is required on the part of the project creator.

A similar scenario exists for promoters of events. They can sell tickets via crowd funding campaigns, and mitigate the risk of under-selling the required number of tickets to profitably run a show, an exhibition, or any particular affair. They can set the funding target to match the minimum ticket sales required to cover costs, knowing that if the funding target is not met, the campaign will not transact, the tickets do not need to be issued, and the cost of running the event do not need to be incurred because the event need not proceed. The minimum funds required to run the event are under-written by the success of the crowd funding campaign, and falling short costs them nothing should the target not be achieved.

Crowd funding is known to offer project creators exposure, social proof, market validation, a loyal customer following, as well as funding. But used strategically, crowd funding can offer innovators and entrepreneurs a way of mitigating risk when the requirement is there to reach minimum order quantities or subscriptions. The “all-or-nothing” model is the perfect environment to test and trial, and help fund innovation and creativity in a protected environment.

Posted on November 27, 2013 By iPledg With 0 comments

Crowd Funding – The Perfect Fit for Start-ups

iPledg - Logo - Low-ResolutionTradition has been thrown out the door. Innovators used to have to build products and prototypes to take to the world. The old adage of “build it and they will come” is no longer supported by new world reality, calling for lean principles from the outset, and to engage with the market early, even before the entrepreneur has started to “cut wood”. The Startup Weekend on Australia’s Gold Coast was testimony to this dynamic way of thinking, and showcased how the innovators could avoid slow commercial death, and succeed fast, in a manner that fits perfectly with crowd funding.

The judging criteria of the Startup Weekend mirrored the real world in which investors and supporters want to be convinced that the product has been thought through, that there is a business model in place, and (most importantly) that there is market validation for the product. “Solve the problem and the money will come” has never been so true. Show that you are meeting a market need (whether the market knows they have a need or not) and that demand will translate back into sales. Show that you can do it profitably, and you will have every astute investor knocking at your door.


The Startup Weekend was a crystal clear reflection of the broader start-up community. Some of the startups wandered around with furrowed brow, worried that without securing the services of a coder or developer, their idea was doomed. Others understood that it was more important to have the concept well developed and have it ready to present to the market for their validation rather than have it polished but with no support. And the market will respond to the concept and the problem it solves more so than just the product itself. Focusing on developing the concept, then engaging with the market makes for more agile development, allowing a business to be faster and more flexible to respond and react. They are not encumbered by the time and cost invested into prototypes which may be outdated before they have had a chance to even see the light of day.


The MVP or Minimum Viable Product concept allows the market to engage at the ground floor. Some entrepreneurs want to boil the ocean, but need to realize that over-thinking and over complicating just confuses the market. Keeping the concept simple, concise and easy to explain allows for the market to engage easily, or offer feedback on how the base product can be manipulated to better address the problem it was created to solve.

The product may be the biggest, fastest or shiniest of its type, but unless the market wants it, it has little commercial value to anyone other than the innovator. Often the inventor is too close to their innovation, so it pays dividends to “get out of the building” and validate that their view is shared by the market that will ultimately decide where the product ends up. If listened to, the innovator will know if they are on track, or if they shouldn’t waste any more time, effort and money.


“Sustainability” is the catch-cry of our times. And sustainability is determined by whether the business model is able to start and then carry on trading through growth and tough times. Entrepreneurs need to consider how the business will be monetized, what revenue streams will be available, and how the MVP will be developed over time. Developing in the conceptual stage allows for agile thinking, allowing the entrepreneur to “pivot” quickly, both in relation to the product concept and the business model before considerable time and dollars are lost.

What crowd funding offers

Many think of crowd funding as simply providing an avenue of raising the cash required to get ideas off the ground. Whilst this is indeed correct, crowd funding offers much more to start-ups.

As a communications platform, crowd funding campaigns allow a project creator to describe the concept in word, pictures and video. They are able to outline the problem that it is they are solving, and show their passion and sincerity in doing so. The innovator can explain how their concept is new-to-world or differs from what else might be available in the market. Transparency is the key, and it is important for the message to explain exactly where the project is up to, even if it is early stage or speculative. Project creators are able to provide an outline of their aspirations as well as the business model that will take them there, and potentially engage with a worldwide audience.

A crowd funding campaign allows for feedback, comment and interaction with your potential market. It can be the main pillar of an engagement strategy, not just a soapbox on which the project creator stands to promote to the crowd. Crowd funding allows for connection with the innovator’s “first tier”, and provides the first tier an effective tool to pass the message on to the second tier, eventually facilitating buy-in from the (potentially global) third tier should it get traction.

Most of all, a crowd funding campaign can provide substantial social or market proof. Take the campaign for the Tik-Tok Watch, which hoped to raise $15,000 in 30 days but ended up raising over $900,000. More impressive than the total raised was support of over 13,000 people who provided social proof or market validation, demonstrating that there was demand for the product, even whilst in its conceptual form. These supporters were people who weren’t simply making hollow promises, but were prepared to put their hand in their pocket to prove how sincere they were about showing their support. Such validation brings investors, partners, distributors, suppliers, and like an extra roll of the dice in a board game, allows the entrepreneur to scoot ahead considerably in the commercialization game.

Posted on November 19, 2013 By iPledg With 0 comments

Crowd Funding – Making it OK to Ask

iPledg - Logo - Low-ResolutionThe figures are out, at least for Australia, but there is no evidence to the contrary that the rest of the world is any different. Currently, only 24% of start-ups seek external funding from any source. Of these, 57% are successful in securing the funds they request. This means just over 13% of start-ups are successful in receiving external funding of any kind. Why is it so? And how do we overcome this hurdle to allow more start-ups to get the funding they need to launch, employ, innovate and develop? The answer may well lie in equity crowd funding.

The current Australian economic landscape is a patchwork made up almost completely of small business and start-ups. Despite a huge geographic footprint, Australia is home to just 24 million people. Between them, they are involved in the 2million businesses currently operating. Of these, 96% are small business, those defined as having 0 – 19 employees. Small business in Australia accounts for just over half of all private sector employment, so their importance as an employer cannot be understated. Add to this the fact that at any time, over half a million people are involved in some form of early stage entrepreneurial activity, and you see that small business and start-ups are the foundation on which the entire economy is build.

The current misunderstanding is that start-ups are funded through the 3 Fs – Family, Friends, and Fans of the initiator. The truth is actually quite different, with entrepreneurs looking inward and providing the funding themselves, either from personal savings or personal credit card. Completing the list of the top four sources of funding currently used by start-ups, we find personally-secured bank loans, or cross subsidy from another business owned by the founder. In fact, of the top 20 sources of funding for start-ups, money from friends and other external investors rates only as number 11.

The ironic part of the whole situation is that the Reserve Bank of Australia claims that 80% of loan applications made by small business are accepted. In contrast, their figures point out that only a small fraction of small businesses are successful in securing venture capital funding.

The impact of the overall lack of success in small business and start-ups receiving the funding they need cannot be understated. The primary impact is on innovation, with 33% of early stage and start-up businesses claiming that the biggest obstacle to innovation is a lack of access to the funding they need to make it happen. Currently in Australia, the other options for equity fund raising are offers to the public (heavily governed and high cost to prepare and lodge a prospectus), angel investors (with whom start-ups have an average success rate of 1.4% in securing their required funding), and venture capital (which has funded an average of 25 companies per year over the past 10 years).

So the reason why start-ups don’t seek external funding is relatively clear – they believe there is a lack of options open to them. They recognise the slim chance of securing funding from VCs and angels, and the costs and high levels of governance around offers to the public makes them feel “why bother?”. In fact, 76% of start-ups that don’t even concern themselves with seeking external funding. The other major contributor to their lack of willingness to secure outside investment is a lack of education about what external funding will do for them, as many believe external funding means giving up control, something that is not palatable given their emotional investment in their innovation.

Enter Equity Crowd Funding. In Australia, the rules of the game have only just started to be drafted. Regardless of how the mechanics will finally be delivered to the market, equity crowd funding will simplify the access to capital for entrepreneurs and small business. Seeking funds will no longer involve having to bow down to grey-faced men and jumping the hurdles they set. Those seeking funding will soon have world wide access to investors through online campaigns. “Asking” will become much less daunting, as the innovator can approach their “first tier” (family, friends, and fans) to check out the campaign online, rather than going cap in hand and asking for a handout, thus making the whole process for less confronting. Engaging with the “second tier” or “friends of friends” also will become much simpler as the first tier is able to easily pass the campaign on to their networks by forwarding and endorsing a link. Once momentum is achieved, the word can more easily spread to a broader audience through online campaigning. The vast “third tier” or “smart money” can then jump on board and deliver the bulk of the funding, and it is access to this tier that innovators would traditionally never have access to without equity crowd funding.

With the pending introduction of Equity Crowd Funding, seeking funds will become much simpler. First followers will then be able to spread the word to their networks of what they have done by way of their investment, and then campaigns will have a greater chance to go viral and have global reach through the use of social media and the internet. Whilst equity crowd funding is largely unavailable (or, at least, highly regulated) in Australia, the initial noises are being made to hopefully make broad based equity crowd funding permissible in the not too distant future, making it far easier for start-ups to ask for (and to secure) the funding that they so desperately need.

Posted on November 10, 2013 By iPledg With 0 comments

Crowd Funding – Fixing Broken Economies

iPledg - Logo - Low-ResolutionThe GFC saw the tide go out for many economies globally, exposing not only those who had been swimming naked, but dangers that were not evident in more buoyant times. Budgets that had previously been stretched, covering exposed areas, now shrank and funding was channeled to more needed initiatives. Whilst some countries suffered a loss of the bare necessities such as food and fresh water, all economies were forced to make funding cuts to health, education and public works. Crowd funding is now proving to be the bridge between the requirements of the community and the availability of government funding.

Third world countries, already struggling prior to the worldwide economic crisis of 2008, were now in a worse position as foreign demand for their domestic product had now seemingly evaporated, as had foreign aid. The provision of the basics such as food and water were difficult prior to the GFC, but become an impossibility without the little funding they were receiving from the government until that point. Crowd funding is now increasingly bringing order back to these countries, with projects like Opportunities For Life. Such projects connect with the passion of people around the globe to solve such issues, and provide the life necessities when a government is unable to do so for its own people.

First world countries are not exempt from such issues, albeit that their issues have less to do with the provision of life’s essentials and more to do with the provision of the needs of a healthy community. Cutbacks to schools and education are not uncommon, and crowd funding is again assisting education institutions raise the funding they require for equipment, infrastructure, external expertise, their cultural programs, and a raft of other initiatives from which governments have pulled funding. Schools, colleges and universities are rich in fans and followers, with students, alumni, staff and the local community all being prospective project supporters for the many crowd funding campaigns popping up to plug the whole left by governments withdrawing funding.

Healthcare also is now being subsidised by crowd funding, with campaigns like Bankrupt by Insurance Company and Choice for Maia raising funds to cover the gap between what public health will cover and the increasing out of pocket expenses that patients are left to pay as governments reel in the funding allocated to this sector. As more financial pressure is being placed back on the patients to find ways of funding their own treatment, an increasing number of people are being forced to look for alternative funding methods for their healthcare, and crowd funding is proving to be the way to successfully achieve the subsidy they need.

Funding for public works and community projects are usually amongst the first to suffer budget cuts from all levels of government. However, communities have found a new voice in crowd funding. In a show of the true democratisation of funding, perhaps the most famous of these was the crowd funding campaign conceived by Rotterdam design practice, Zones Urbaines Sensibles. Due to government cutbacks, the bridge which was to reconnect the city centre with the northern districts was going to be delayed. Given that the people could not wait, crowd funding became the way for the bridge to be financed in an alternative way so that construction could start decades earlier than otherwise possible. This project was the catalyst for many others to follow worldwide, and now crowd funding is no longer an alternative funding source, but a primary consideration for such works.

Sporting clubs have also felt the ire of government cutbacks, but they too are enjoying the benefits of projects made possible through crowd funding. Whether it be for equipment, to cover costs of touring, putting on an event, or for training needs, sporting campaigns such as SPC Gymnastics Parallel Bars and Conor and the Javelin demonstrate how crowd funding can unify people with a common passion to ensure that government cutbacks do not result in deserving people going without.

Crowd funding has proven to be timely. From third world nations to the economic super power of the USA, governments around the world are steering people to crowd funding to finance those projects for which the government is no longer able to provide funding. Testimony to this is the way in which the USA has implemented equity crowd funding, and expects it to bring $300bil in funding to small business and start-ups in its first year. Without one cent of this coming from the government, it has really made the administration of almost every nation around the world stand up and take note that crowd funding really is the way to fix disadvantaged and broken economies.

Posted on November 6, 2013 By iPledg With 0 comments

Crowd Funding – Understanding the Roles of the Project Creator and the Platform.

iPledg - Logo - Low-ResolutionCrowd funding is work – teamwork. As with any great team, it is essential that the team understand each others’ role so that they do not miss any crucial activities that may impact on achieving the desired outcome. At the nucleus of the team are the project creator and the crowd funding platform itself. The relationship between these two parties is often misunderstood, and it is this misunderstanding that can stand in the way of crowd funding success. But get the alignment right between the project creator and platform, and get each one fulfilling their role, and success is almost guaranteed.

The role of the platform is over represented, either by the platform themselves, or by a hopeful or over-enthusiastic (or ill-informed) project creator. Traditionally, in crowd funding, the platform’s initial role is not to find funders or to direct funders to the project. Most of the grief around crowd funding occurs after the campaign, when the project creator airs their disappointment in the platform not having delivered funders to the campaign. In fact, in 21% of campaigns (from campaigns around the world), not a single cent is pledged, and this is due to the project creator sitting back and waiting for the platform to “do its thing”.

The project creator is the one charged with coming up with the project – that much is obvious. Their role is to then engage the first tier, or their closest network of supporters. Family, friends, workmates, neighbours, etc are those people who best know the project creator, and will usually support them based on the simple fact that they know and like them. If a project creator is unable to get any support from those who know and like them personally, there is little chance that the friends of friends (second tier) or the third tier (those unknown to the project creator) will jump in with their support. In fact, this first step of engagement is critical to the success of the campaign, as a project creator can increase their chances of success from 15% if they have no funds pre-committed to their campaign, to 80% if they get their closest friends and relatives to pre-commit 20% of the target, to an almost 100% chance of success if they get 35% of their funding target from their first tier prior to or shortly after commencement of the campaign.

The role of the platform is divided into two areas, defined by the different support phases of the campaign. Initially, the platform operator acts as facilitator, mentor, and coach, guiding the project creator in the best way to position their campaign, and to ensure the right structure and contents are in place. The more client focused platforms will appoint a case manager to coach and encourage the project creator to also connect with their first tier. Given that the project creator is personally connected to their first tier, no one can do this for them – it must be the role of the project creator to build the first tier support. And the earlier they do so (even before the commencement of the campaign) the better.

Once initial support is established, the role of the platform then shifts from facilitator and coach to promoting the campaign out to the masses. The project creator, by engaging the initial support, really gives the platform operator something to work with. Without this initial support in place, the platform can direct their audience to the campaign, but the crowd will feel little confidence in wishing to jump in. The crowd needs comfort that is offered by “other people” validating the reason to support the campaign. And the “other people” are the project creator’s “first tier” of supporters. Once they are in place, the role of the platform operator is made easier to go to market and leverage the initial support into a fully funded campaign. The more initial support, the greater leverage, and the greater chance of not only funding, but over funding the target.

Regardless of whether the project is one that is seeking equity crowd funding, or whether it be under the pledge model, the same principles apply. The relationship between platform and project creator need to be clearly understood, and with the relationship defined, the scene is set for crowd funding success should both parties fulfill their respective roles.

Posted on October 29, 2013 By iPledg With 0 comments

Crowd Funding – The Importance of a Rolling Start

iPledg - Logo - Low-ResolutionFor so many years, the Indy cars have had it right. Don’t sit on the grid waiting for the race to start and then madly accelerate – Start your engines early and get moving well before the race begins and get your momentum up, ready for when the green flag drops. There is an uncanny parallel to crowd funding, and after extensive worldwide studies, the evidence is glaringly obvious – the greater momentum you have in place prior to starting, the far greater your chances of achieving crowd funding success.

Savvy exponents of crowd funding have known for a while that it is best to have people pre-committed to pledging support to their campaign. But the level of support required for success and the impact of arranging this before the campaign goes live has now been largely quantified by Seedrs in their analysis of the different levels of pre-committed funds and the effects on the success of a campaign.

Their findings were simple yet startling. Campaigns that started with 0% funding at launch showed a 15% chance of success. However, with just a little work, those project creators that went about seeking support prior to launch, and achieved just 1% funding shortly after commencement of their campaign lifted their likelihood of success to 27% – almost doubling their chances of meeting their target.

A considerable jump in success rate came when project creators further engaged their crowd prior to their campaign going live. With just 5% of funding pre-committed, their chances of success were now 50%, relatively good odds in anyone’s books. Those that were absolutely diligent and took time to really rally support increased their chances of success to 70% if they raised 10% of their required funding prior to launching their campaign.

The magic number came at 35%, at which point campaigns starting with this percentage of their target pre-committed or pre-funded met or exceeded their funding target in nearly every instance. The crowd funding community has long known that campaigns that achieve 30% of their funding target go on to be fully funded in 90% of cases. Even those strong odds are bolstered by achieving this level of support prior to the campaign going live.

Understanding the dynamics of this is paramount in understanding the real essence of how to achieve crowd funding success. Why does this amount of pre-commitment achieve such great results? Why is a “rolling start” so important to a project creator achieving their funding target, and why is it so often repeated when people achieve these magic milestones?

The answer is twofold:-

Firstly, project creators feel inspired to keep going. Nothing inspires success like success. A few strong steps usually inspire you to run. A feeling of “I can do this” and wanting to take it all the way can be a powerful motivator. “Bigger, Faster, Stronger” – the Olympics credo is based on this. People inspired by initial success to take it all the way to achieving their goal.

Then there is the power of “The Second Tier” which is perhaps the greatest driver to crowd funding success. Remember back to when you were a kid, and you and your buddies stood on the edge of the pool, daring each other to be the first to jump in. No one wanted to be the first, until someone took a great leap, a leap of faith, and plunged in. This was then the catalyst for a few other brave souls to take the plunge. These were the ones who were keen, but didn’t want to be the first (however, they were happy to be the first to follow). They gave validation that it was OK to take the leap, and allowed others to “jump in”, to the point where anyone left standing on the edges, who had not jumped in, was no longer considered “with it” and part of the crowd.

It’s exactly the same with crowd funding. The pre-commitments, the first followers, and the validators signal to the rest of the crowd that it is alright to follow. It takes away the nervousness, and gives comfort to the second tier (the first tier being the friends, family and close associates of the project creator – those who were relatively easy to engage and get on board as supporters for when the campaign initially launched). The second tier or “friends of friends” then becomes a natural extension of the initial momentum. The second tier is also larger than the first tier, given that each of the first tier has as many contacts as the first tier itself – the spread then becomes exponential. By the time the campaign is exposed to the third tier (the greater internet audience), the audience is huge, the story is completely validated by the support it has received, with the inertia carrying the funding campaign at pace to the target and quite often well beyond it.

The argument for a rolling start cannot be denied. Project creators that are “in the know” understand that the efforts and activities required once a campaign is underway are largely mute if the initial momentum is not there. As many a successful racing car driver has been quoted over the years, it is not the work done once the starters gun goes off, but the work that got you to the starting line that will determine your (crowd funding) success.

Posted on October 23, 2013 By iPledg With 0 comments

Crowd Funding – Mitigating Risk

iPledg - Logo - Low-ResolutionTransactions anywhere in the commercial world carry risk. People have to be savvy to the integrity of the vendor or provider at point of sale, as well as considering the ability to provide timely delivery. Then there are issues around warranties, both implied and stated, and the availability of these in case of non performance. Perfection is not the law that governs the commercial world, and this also applies in the realm of equity crowd funding. Law makers in jurisdictions around the globe are now busy considering how to mitigate exposure for a willing yet unprotected public.

It is expected that as we lower the bar to equity fund raising, we lower the sophistication of the issuers (those initiating projects and seeking funding) and investors. It is therefore assumed we are increasing the risk to all parties, and it is these risks that responsible policy makers wish to tone down. There is also a third party that needs to be considered in all of this – the intermediaries, or those who provide the platforms on which issuers make available their prospective offerings.

For intermediaries, there are 3 types of risk. There is possible risk to their reputation should investments go awry. There is also an exposure for regulatory risk, that is should they not follow the laws. And there is legal risk, such as getting caught in the cross fire between an issuer and investor in a case whereby an investor might claim misrepresentation in promotion or lack of due diligence.

The key consideration for regulators is in dealing with the risk to investors. Equity crowd funding opens up the world of investing to retail investors, exposing them to the possible misuse of funds raised, or the misappropriation of their investment by intermediaries. Given that in most cases such retail investment is for relatively small amounts, this low loss may cause them to just “write it off” rather than requesting their loss be investigated further, thus opening up a greater opportunity for fraud or even money laundering. Investors may not understand the risk associated with investing, leaving the unsophisticated investor further exposed. One must also consider the calibre of some issuers who may turn to equity when they can’t get funding through traditional means, meaning that with even the most honourable of intent, their proposition is by nature that of a greater threat. Startups by definition are already high risk, so this end would be the highest risk end of an already high risk group.

The complexity is further compounded when one considers the issue of valuation. The initial value of one’s equity may be intangible. The demands for transparency in such offerings are far less than public companies, so the way in which the value of shareholding is determined is not only difficult in the outset, but the ongoing rise and fall in share value may be hard to determine, let alone monitor. Equity in such investments would be “illiquid” with no secondary market on which to sell them. Given that the value of the investment would be hard to draw on or recover, and the difficulty in being able to value it, such shareholding would not be able to be used as collateral for future borrowings. And given there is not the same level of due diligence and no prospectus, investors may not have the same right of recourse.

Before the internet, the issue was less of a concern, due to the area of any fallout being relatively well contained. Traditionally it was a rather small audience to which such an offering could be made. Now with the internet the reach and risk are increased, and the casual nature of the internet brings with it a generally lower level of scrutiny.

However, despite all of this, we have regulators around the world establishing frameworks so that economies can benefit from this much needed form of commerce. Whilst equity crowd funding is new by way of legislation in many parts of the world, organisations such as the Australian Small Scale Offerings Board (ASSOB) have almost 8 years of equity crowd funding experience since they drove the need to change a class order allowing for the raising of up to $2mil from upto 20 non-sophisticated investors over any 12 month period. Under the watch of the current regulators such as ASIC, the Department of Fair Trading, and ACCC, ASSOB has built a bank of experience on which governments can now draw to implement more broad based equity crowd funding legislation. Equity crowd funding is not “new to world”, so the regulation and framework governing project creators (issuers), project supporters (investors), and operators of platforms (intermediaries) should be an extension of current law adapted to better suit a broader set of retail investors.

In addition to the “law” is the underlying “spirit” of crowd funding, namely by virtue of the “Third Tier” concept. Investors derive comfort from not being the first to dive in, with this reassurance being provided by the first tier – the first follower, the family, friends and those closest to the issuer. The second tier – friends of friends – then buy in and bolster the momentum. The third tier then take note, typically when the campaign hits 30% funding, and that’s when the smart money kicks in, based on logical reasons to support and invest.

In a wonderful time of economic renaissance when the democratisation of funding is spreading throughout the world, equity crowd funding is finally being looked at by governments who want to protect to retail investor. Ironically, in most parts of the world, you can drop $1,000 into a poker machine without anyone protecting you, but you cannot invest $1,000 into a local startup with the chance of providing jobs, supporting the local economy at grass roots level, and with the chance of reaping an ongoing return. Thankfully sensibility is starting to prevail as governments and economies around the world begin to seriously and responsibly consider equity crowd funding as an integral part of their commercial landscape.

Posted on October 15, 2013 By iPledg With 0 comments

Crowd Funding – Delivering Relief, Joy and Assistance at Christmas

iPledg - Logo - Low-ResolutionChristmas is a time of great joy, celebration, and peaceful relaxation with family and friends. But also, for many, it is a time when those who have little feel most alone, and most in need. With a growing number of needy in our communities, those who deliver relief and assistance have their resources stretched, and are put under increased financial pressure. However, it doesn’t necessarily need to be this way, with crowd funding offering the perfect solution to fund assistance programs. And with eleven weeks til Christmas, now is the right time to get campaigns started to deliver Christmas cheer.

Resource and time poor, charities and community groups are now able to use crowd funding to leverage the reach of the internet, engage a broader audience, and mobilize them to support initiatives aimed to help those a little less fortunate. A campaign started now and run for 60 days will provide the funding required to bring food, gifts and a broad range projects to assist those most in need at a time when they are perhaps feeling most isolated.

Children are some of those hit hardest at Christmas time. Whether it be through ill health, being disabled, or part of a family whose circumstances mean that there are no gifts under the tree, those with caring intent can run campaigns to fill the void left when Santa doesn’t visit, or when food is scarce, or medical assistance is seemingly out of reach.

The homeless can be touched by the spirit of Christmas, and crowd funding campaigns can be run to provide a special Christmas meal, or an event to let them feel loved or part of a broader family.  So many in the community want to share the love, and initiating a crowd funding campaign is the perfect answer. The rewards do not have to be tangible, and for many the reward of giving, or the reward of being involved is all they ever want in return for their pledge.

The elderly are often forgotten during the festive period. Programs to ensure that carers check on them when conditions outside can put them at risk in their homes can make a difference to not only the way they feel, but their survival. Bringing families together or providing experiences to take the place of family when they are not about can make the difference between Christmas being the happiest or saddest time of the year.

And now, one crowd funding platform is wearing its heart on its sleeve, and giving their Christmas presents early this year. For the month of October, any campaigns listed on iPledg ( ) by charitable or community organisations or people hoping to deliver any project of a giving nature around Christmas time, can do so on iPledg and have the success fees waived in total. Yes – project creators can list charitable and community projects on iPledg in October for free, and not pay any success fees once they hit their target (the normal third party transaction fees still apply, but there are none of the success fees payable – the only platform to do so!). iPledg is a global platform, able to take projects and pledges from anywhere in the world in which crowd funding is allowed by law.

If you are inspired by the spirit of Christmas, and want to start a project to deliver joy, happiness, relief or cheer at Christmas time, now is the time to start your campaign. And in the spirit of Christmas, iPledg have thrown their platform open to you to allow you to fund your passion without paying any listing fees or success fees. But act now, before the end of October, and make someone’s Christmas wish come true.

Posted on October 8, 2013 By iPledg With 0 comments

Crowd Funding – Understanding the Universal Currency

iPledg - Logo - Low-ResolutionIn an age when all relationships have seemingly become transactional, social commentator Ian MacKenzie has rightly summed up the crowd funding landscape when he said that the currency of crowd funding is not cash, but relationships. In a traditional commercial transaction, goods and services are provided in exchange for payment, and then each of the two parties to the transaction goes their own way. Rarely is there any follow up (sadly), and brand loyalty seems to be waning as consumers become shrewder and increasingly demanding, preferring to compare and jump ship should a better deal come along.

Crowd funding tends to have challenged conventional thinking, as people are now no longer investing for a “slice of the pie”. Their motivation and “buy in” is now being based on a whole new paradigm.

In the case of most crowd funded initiatives, the monies pledged are not simply a transaction, but a gift, thus changing the entire essence of the relationship between the project creator and supporter. In a gift relationship, there is a type of indebtedness – You supported me so I now owe you something back. The whole concept is unique in that it creates communities, with the whole “tribe building” being at the core of why crowd funding has flourished around the globe.

It is true to say that charitable and community projects have never viewed monies raised as part of a regular commercial transaction. However, whilst people do pledge because the feel passionate about the cause or outcome of the project, there is less of a “donate and run” angle to crowd funded projects, and more of one whereby people buy in to the story, the need behind the project, and tend to have the “rewards” (tangible or otherwise) as ongoing recognition and reminder of their involvement. The better run crowd funded charitable and community campaigns also have a greater residual benefit and effect if the project creator communicates with their new “crowd” and continues the ongoing relationship over time, well after the campaign is completed. This can then also be the basis for future, successful crowd funding campaigns and part of an ongoing funding strategy for a series of projects.

Commercial initiatives successfully funded by crowd funding have, at their core the same base formula, again built on relationships. The “first tier” or first followers are usually friends, family, and those that are closest to the project creator. They have been primed (usually well before the project commences) and give the campaign the initial momentum to achieve ultimate success. From those with whom the project creator already has relationships comes the second tier supporters. These are then the newly acquired relationships that become part of the tribe, and they play an essential role in the success of the campaign. They are the ones who will take the campaign to the critical 25% – the point at which strangers will start to buy in. These “strangers” then make up the third tier, pushing the campaign to the next key milestone, that of 30% funding. Those campaigns achieving 30% of their funding target are known to achieve 100% of the funding target in at least 90% of cases. Also, by this point, the crowd has started to well and truly gather, and if the project creator handles things correctly, he will be poised to build a relationship with his crowd that goes well past that of a mere transaction, and will endure throughout the life of the organisation or product lifecycle.

Crowd funding is proving to be so much more about the “crowd” than the “funding”. It is the crowd that will provide the social proof, the advocates through funding and, if well handled and communicated to, will be with the project creator for many years (and many projects) to come.

Crowd Funding – Gentlemen (and Ladies) – Start Your Engines!

iPledg - Logo - Low-ResolutionIn April last year, President Obama lit the blue touch paper to start the process of getting investment crowd funding into law. With his signature came the first steps of what would bring about massive changes in the world’s largest economy. In fact, it was not only the $300bil that was estimated to jump start the business start-ups in the USA that caught people’s attention, but all over the world economies started to consider how this form of e-commerce could make a change to their economic landscape, all without any impost on the local government.

For most of 2012, the US economy galloped along towards the introduction of investment crowd funding, until the end of the year when, just before the “go live” date, the focus shifted to avoiding the fiscal cliff, and the introduction of investment crowd funding stalled. Seemingly little more happened for much of the first half of 2013, until July 10 when the ban on general solicitation was lifted, allowing companies, hedge funds, and other asset managers to advertise private security offerings to pre-qualified accredited investors – something that had (until then) not been lawful in the USA.

At the time of the lifting of the ban, the rule still needed to pass through the Federal Register to become law, and this was to take 60 days, with many saying this was just a formality involving the adaption of the wording of the law to fit the Federal Register. With this in mind, general solicitation should be allowed any day now, and then we are underway in the US. With this immanent change, the rest of the world is starting to make moves for the implementation of investment crowd funding in their economy.

In the last week, the Australian Corporations and Markets Advisory Committee (CAMAC) released its discussion paper on crowd sourced equity funding (CSEF). They recognise that (internationally) CSEF is receiving increasing attention as an alternative form of corporate fundraising for start‑up or other small to medium companies. To date, some jurisdictions, notably the United States, Italy and New Zealand, have enacted legislation dealing with CSEF (though the US and New Zealand legislation on general CSEF is not yet in force), while some other jurisdictions, such as Canada, France and the United Kingdom, are giving consideration to this form of fundraising.

The CAMAC discussion paper notes that CSEF is already theoretically available in Australia, but subject to compliance by the issuer and the online intermediary with fundraising, licensing and other requirements under the Corporations Act. This paper examines the nature of those requirements and raises for consideration, taking into account approaches in other jurisdictions, whether the Australian provisions should be adjusted in some manner for CSEF.

In considering possible approaches to CSEF in Australia, CAMAC notes that this form of fundraising carries a series of risks for persons providing funds through this medium. While risks may be present in any capital raising process, the central role of the Internet means that the number of persons potentially affected can be significantly greater than for more traditional means of fundraising. There is also the question of the degree of scrutiny of these offerings, and the information to be provided to investors, compared with traditional prospectus or other disclosure requirements.

Another issue concerns the obligations that should rest on the online intermediaries.

The CAMAC discussion paper seeks views on these matters, including:

  • Whether CSEF should be regulated in any different manner than any other form of corporate fundraising
  • Whether any form of regulatory accommodation for CSEF should be limited to specific situations, such as offers to sophisticated investors, falling well short of general public offers open to all investors, or
  • Whether the Australian legislation should ‘cherry pick’ CSEF approaches in some other jurisdictions but within the context of otherwise maintaining the existing regulatory structure, or
  • Whether the Australian legislation should regulate the process of CSEF in the same self-contained manner as, say, under the JOBS Act in the USA, which is intended to exhaustively regulate this form of fundraising in that jurisdiction.

The lights have definitely changed from red to amber, and with the green light imminent in the USA, this may just be the catalyst for a global shift in the way small business and start-ups are funded.

Crowd Funding – Take My Hand and Let Me Take You Where You Want To Go

iPledg - Logo - Low-ResolutionDespite being the fastest growing form of e-commerce on the planet, Crowd funding is still largely a mystery to many. Much of the population has not heard of it, and many of those who have heard still remain unclear as to the mechanics of crowd funding. Logically, why would people pledge to fund the passions of other people, in most cases people they have never met? This is where the magic of crowd funding exists, the wonders of disruptive technology, and where crowd funding specialists are now explaining to their crowd how it all works.

Specialists in crowd funding and operators of various platforms like iPledg are utlising a number of communication mediums to let the crowd know all about crowd funding. Blogs, white papers, webinars, seminars, and workshops are all being utilised to get the word out there, to preach to the faithful and the hopeful, and to let them know all about this wonderful way in which project creators can fund their initiatives without taking on loans or giving away equity in their product or company. It is the last one of these options – workshops – that is proving to be the most popular, allowing people to interact with other attendees and the presenters, and get feedback as to their particular needs.

Potential crowd funders are able to learn all about what crowd funding is all about. They can find out how it has emerged and how it has got to where it is today, as well as where it is headed. The features of crowd funding are then translated into the benefits that project creators can enjoy once they have it explained to them how they can use it to fund their passion, whether it be for creative, commercial, charitable, or community projects. Finally, attendees at crowd funding workshops can get a good understanding of what is the structure of a good crowd funding campaign.

Again, iPledg is leading the way with workshops like the “Crowd Funding Toolbox” aimed at how project creators can make their campaign really sing. Attendees are coached on how to write a clear and engaging project description, and to produce a captivating campaign video. Rewards or inducements are paramount in getting people to pledge their support for a campaign, so many workshops focus their attention on how to steer clear of offering another coffee mug or t-shirt, and finding creative and well sought after rewards. As with elite athletes, workshops will coach their charges on how to be well prepared and campaign ready, and to be able to sprint out of the blocks as soon as the starting gun is fired. All aspects of the campaign lifecycle are covered, from beginning, through the “sagging belly” phase, and deal with both campaign success as well as understanding the options when a campaign falls short of its target.

Personalised attention and ability to discuss how the nuts and bolts of crowd funding can apply to their particular campaign is drawing prospective project creators to workshops. It is the subtle “tricks of the trade” that can make the difference between crowd funding success and a project creator that is left wondering. Customer focused platform operators are extending their hand to the crowd, and offering to lead them to crowd funding success, a move that is having a positive impact in this sector.

Crowd Funding – You be the Judge

iPledg - Logo - Low-ResolutionCrowd funding is all about shifting power back to the masses, moving it from the traditional custodians. Until recently, the final say to the progress of many projects was in the hands of the “grey faced men” – bank managers, lawyers, government officials, and the like. But now, it is not necessarily the projects that tick all the boxes and meet all the rigid criteria that get the funding. Rather those that can engage the crowd, offer the masses the rewards to inspire, and communicate their message broadly that are getting the funding they require to successfully implement their project.

It is a true example of market economics, giving the market the total say in what projects it feels should proceed. In the next iteration of social media, crowd funding not only allows followers and friends to say they “LIKE” the project creator and their initiative, but the can “LIKE” the project with their hard earned cash – a very powerful show of support indeed. With Crowd funding, projects that are successfully funded are not done by the traditional methods of meeting logical criteria or falling within the risk profile of traditional funders – it is by engaging a supportive crowd, a crowd who have the power in their hands to make small pledges of support (and some not-so-small pledges) to help the project creator achieve their funding target. Engage enough supporters, and the project creator receives the funding they need. It is the true democratisation of funding.  

Conventional thinking is brushed aside as crowd funding, a classic “disruptive technology”, sees a total mind shift and change in habits. It is not the project that is “judged” by a few to be right, but those that receive the support of the crowd that achieve their funding targets. It is no longer up to a few people to judge, but it is now the ability of the campaign, the project, and the project creator to connect with those who share their passion, and if they can engage enough people to support them, then the project is given the validation to proceed. Some campaigns that appear on crowd funding platforms will cause the reader to shake their head, crack a wry smile, or cock an eyebrow and wonder at the nature of the “zaniness” of some campaigns. Ultimately the crowd will judge it. If it is indeed crazy, then the crowd will not support it. But if the campaign receives a landslide of support, achieving its funding target, and a large number of project supporters engage, then the project may just cross the fine line between “crazy” and “genius”. Again, it is in the hands of the crowd to decide.

For so many years, entrepreneurs, inventors, and the artistic had their creativity stifled by having to conform the “grey faced men” and their need to tick boxes before approving funding (if at all). Crowd funding now allows for the creativity to be retained, even encouraged, as it is the compelling and the wondrous that will engage the crowd to judge it worthwhile to receive their support.

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Posted on September 4, 2013 By iPledg With 0 comments

Crowd Funding – Pledging Support for Seed Capital

iPledg - Logo - Low-ResolutionWith the immanent introduction of investment crowd funding in the USA, some question the future role that the traditional or pledge version of this form of e-commerce will have to play in the coming months. Whilst the risk profile of crowd fund investors is less than traditional investors, they still have a general aversion to risk. Those supporting crowd funding projects by way of the pledge model are driven by different motivators and it is this that will allows pledge model crowd funding to continue to flourish (if not exponentially increase) as a feeder channel  to investment crowd funding.

Project creators employing the pledge model version of crowd funding to raise capital for their projects utilize a different strategy with a completely different set of motivators to those seeking investment. They do not need to demonstrate a return on investment or articulate any exit path for their supporters. They also don’t need to give away equity in their idea or their company. In such a cases, project creators are able to engage support early while the concept is still being worked up. Pledge model crowd funding is perfectly suited to such early stage, high risk funding, and is great for financing the securing of I.P. or prototyping, proof of concept trials, or engaging the skills and knowledge required to get the concept worked up to a more robust commercial offering.

Supporters of pledge model projects are motivated by other inducements that traditional investors. Traditional investors want an ROI, and an exit path. Those that pledge their backing to pledge model projects are primarily driven by one or more of three motivators – they know the project creator and want to support them, they are passionate about the cause and want to see the outcome realized, or they want to get one of the cool rewards in return for their pledge. As the expectations are totally different to that of a traditional investor, the pledge model is well suited to gain involvement and engagement without the customary risks associated with investment.

The pledge model was disruptive technology when it first started to gain global popularity just a few years ago – Why would anyone pledge without getting a return? Nowadays is a proven and accepted model for early stage capitalization for smaller tranches of seed capital. It has carved itself a niche as pre invest mechanism prior to concept, creator or company being completely ready for full commercialisation. With the imminent launch of investment crowd funding, the current pledge model is not threatened, but positioning to ride the wave investment crowd funding is expected to bring, with the pledge model still offering the best option for early stage seed capital for inventors, entrepreneurs, and startups.

Posted on August 26, 2013 By iPledg With 0 comments