‘Practical Techie:’ Funding platforms multiply in ’14

Written by  //  January 16, 2014  //  Biz Views  //  No comments

Author Rafael Matos is professor of multimedia at a private university and director of the Caribbean Multimedia Center, a nonprofit media lab focusing on closing the digital divide. Questions should be sent to cccrafael@gmail.com.

Author Rafael Matos is professor of multimedia at a private university and director of the Caribbean Multimedia Center, a nonprofit media lab focusing on closing the digital divide. Questions should be sent to cccrafael@gmail.com.

The concept of crowdfunding for new technological ventures is here to stay and, according to latest analysis of activity, the field is becoming, well…crowded.

In 2013, according to Tech Crunch, the main startup up machine is Kickstarter, with a accumulation of $480 million in pledges for new projects. The funding platform was able to launch that year some 20,000 startups, an impressive statistic if one considers that the strategy of crowdfunding is a relatively new financing phenomena.

This means that Kickstarter in one year was able to successfully mobilize 3 million individual funders to help independent innovators materialize their dreams of launching a high-tech company of their own.

Surprisingly, Kickstarter could have done better but competition in the field of crowdfunding is equally growing at a faster space. Rivals such as Indiegogo and Bigcolors are faring well in the competition, including innovating new incentives, awards and types of financing dynamics to help jumpstart the creative entrepreneur.

What is really happening is that as more and more fund-it-yourself platforms pop up all over the Web, they spread out among new crowdfunding sites and backers become more diluted.

Nevertheless, Kickstrater was able to mobilize 2.2 million more backers than in 2012, but ironically, fewer projects met their final goals in 2013 than the previous two years. So it’s a balancing game between proponents, backers, dreamers and actual doers.

But, all in all, as Tech Crunch cites, there is no shortage of crowdfunding websites out there, with Kickstarter and Indiegogo as main players.

The latter has become more innovative as a funding pipe, offering an informational tool it calls “Outpost,” which allows project proponents to run Indiegogo funding campaigns as embeds in other websites. Theoretically, and functionally, this helps the entrepreneur spread its funding campaign really wide. Indiegogo itself gets 9 million monthly visitors, according to its portal metrics.

The embeds can go to whatever the campaigner choses, or into Indiegogo’s own marketing channels in the quest for more exposure to possible backers’ pledges.

Europe in on the action
Another player is Indievoic.es, an Eastern Europe-based crowdsourcing platform, designed specifically for independent media projects in developing countries.  As all the others, Indievoice offers prizes in exchange for funding, but it has and added value in the form of small no-interest loans, whichever suits best for the proponent of a media project. It supports different kinds of media projects, including investigative reporting, local radio stations and bloggers with special themes of community interest.

In essence, Indivoic seems to be spearheading the revolution for more and more independent media entrepreneurs all over the world.

Yet another funding platform, Kiva.org specializes in mini-loans with interest for entrepreneurs in all sorts of projects, letting the campaigner choose from which funder to borrow from. It offers a list of options and as of last week, Kiva had 2,100 loaners on its list, for loans from $25 to $5,000, mainly small retail or service startups in Third World nations.

Although most crowdfunders are not for profit, each charge a certain percentage of the source funding for each campaign.

One more type of investing in startups is the so-called angel funding system. This is a local investor who provides financial backing for small startups or entrepreneurs. The term “angel” investor comes from the Broadway theater culture and are usually found among family and friends who helped fund a stage play, but nowadays it’s more for tech companies.

One such “angel” investor is Bigcolors, based in Hong Kong. It not only offers a platform for crowdfunders, it also procures shareholders for projects that show special promise en the emerging markets. The fundraiser already has more than 1,200 investors, according to its website.

And the funding platform list grows fatter. There is also Fund2.me, AngelList and Startup Stock Exchange (SSX), and one in Latin America, Idea.me, which focuses primarily on artistic, musical, and retail projects. The Argentina-based platform has a different twist, as it accepts investments in Bitcoins, as an alternative to money transfers or credit cards.

It uses the application “Bitpay” which converts Bitcoins in dollars. It’s that easy.

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