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Are you crowdfunding? Tell us about your experience


#1

We are experimenting with a new crowdfunding campaign at Indiegogo:

Our press releases have not kicked in (until Monday), but we’re interested in what it will do. We’re actually waiting for the SEC to rule on equity crowdfunding. We think that will be great for startups.


#2

Here, I’ll start the discussion for you guys. Heres something I wrote on LinkedIn.

“Equity” crowdfunding is not actually approved by the SEC yet (and we’ve all been waiting for them to make their rulings for a year now since Obama made it law) and lots of websites are scrambling to be ready because they believe that its going to be available soon.

You can get a form of equity crowdfunding via licensed broker sites that claim to have accredited investors, but many of them just make money by offering preparation or representation services before they will do much for you. And some like CircleUp (who could select your project and prepare it for as an offering without upfront charges) but only if you’ve been in business for at least a year and have annuals of at least $1m.

There are however, some free sites like gust.com, where you can place your info up and submit it to angel investors.

“Contribution” crowdfunding you can find at dozens of locations with various forms of category and procedural rules and/or limitations. We are experimenting with one of these campaigns ourselves. We chose indiegogo.com because it has a broader range of categories to be listed under and gives you an option to keep the funds you raise even if you don’t meet your goal. They just charge a higher percentage fee if that ends up being the case.

Contribution crowdfunding is great as long as you have a good network of social friends and associates who will help you push the campaign along but you must make sure its promoted properly. We are still working out these bugs (even while our campaign is live).

Two things we’ve learned about this type of fund-raising.

1). If you are selling hot new new technology and offering pre-purchasing of your item as a reward (or if people believe that you may become the next Apple or Facebook), you will do very well.

2). Don’t expect that your friends or family will come to the table. Many view these types of things as a form of “panhandling” and they aren’t always pleased about being bugged to contribute. No one cares as much about your project as you do.

Finally, if its a business opportunity and you are also looking for angel investors, and you don’t reach your goal, it could look like your concept isn’t worth much. And these sites do not allow you to cancel once started.

This is ours: http://www.indiegogo.com/projects/webwizards

We’re hoping it does better after a new Press Release next week.

I hope this gives you some insight. Best of luck.