Crowd Funding is the ‘Democratization of the Funding Process’, Small Investors Who Have Relatively Smaller Amounts to Spare Get to Be Part of A Venture. It is also a Good Way to Understand if People are Interested in a Product like the One You are Visualizing.

Hi Everyone Today We will Talk About The Power Of Crowd Funding.

Startups Using Crowd Funding Platforms are Realizing that the Benefits Go Well Beyond Raising Funds. The Platforms Help Validate Product Ideas, and Grab Global Customer and Investor Eyeballs.

Crowdfunding Is The “Democratization” Of The Funding Process

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Poorvaa Productions, a Chennai Based Production House Founded by Musician Pradeep Kumar, Wanted to Mobilize Funds to Document the Life of 15th Century Tamil Poet Saint Arunagirinathar. Kumar was Keen to Retain Creative Ownership of the Project and So Needed Capital that Would Not Dilute his Ownership.

He Used Crowd Funding Portal Wishberry to Raise the Rs 10 Lakh He Needed. The Rewards He Offered Funders Included Depending On the Size of Funding Poetry Verses in Ancient Scrolls, ‘Thank You’ Notes on Facebook, Special Film Screenings, A Dinner Date with the Poorvaa Team, Exclusive Shots from the Documentary, Custom Artwork, and Exclusive Paintings of the Documentary Shots. Those Contributing Between Rs 1 Lakh and Rs 2.5 Lakh Got An ‘Additional Producer’ Credit in the Documentary, and those Contributing Over Rs 2.5 Lakh Were Billed as Executive Producers.

Kumar Ended Up Raising Rs 10,77,401 from 192 People in a 32 Day Campaign. “As Artists, When You Require Funds for Your Creations, It is More Important to Have Patrons Rather than Businessmen Supporting You,” Said Kumar, Who is Determined to Persist with Crowd Funding in Future.

Rohildev N, Co-founder of RHL Vision Technologies, A Startup Incubated in Kochi’s Startup Village. RHL Vision has Developed Fin, A Ring Worn on the Thumb that Converts the Palm into a Gesture Interface. It Raised Over $200,000 from 1,600 Funders, through the US Based Crowd Funding Portal Indiegogo. Within Months of the Successful Campaign, RHL Attracted $2 Million in Funding from Kalaari Capital, Money that has Helped the Venture to Establish An Office in the US and Hire Former Apple Employees to Make Fin Compatible with the Apple iOS.

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Suneesh, Famees, Rohildev, Charls and Jithesh, Co-founders of RHL Vision Technologies, in Thiruvananthapuram. They Raised $202,547, Twice the Target, On Crowd Funding Platform Indiegogo.

That was Also the Experience of Bengaluru Based Connovate Technology, Which Conducted a Campaign On Indiegogo for Gecko, A Bluetooth Device that Can Be Attached to Valuable Items (like wallets, bikes, suitcases) Which Can then be Tracked by Phone. The Campaign Was A Huge Success, and Immediately Attracted Global Customers, Resellers and Original Equipment Manufacturers. Later Connovate was Acquired by Hong Kong Based Consumer Electronics Company Binatone.

Advantage of Crowd Funding Is If It’s A Success, It Will Attract Bigger Investors.

Indian Crowd Funding Portals

A Number of Crowd Funding Portals Have Emerged, Including Wishberry, Catapoolt, Ignite Intent and Start51. They Charge A Service Fee, and Since Running Costs are Low, It’s a Very Viable Business.

Wishberry, A Portal with Almost 80% of its Projects in the Creative Arts Space, Has Been Receiving Requests from Ventures Like E-commerce, Web Portals and Mobile Applications. Anshulika Dubey, Co-founder and COO of Wishberry, Admits that Crowd Funding Cannot Replace Angel Investors and Venture Capitalists (VCs), “But it Brings the Early Traction and Recognition that Entrepreneurs Require.” Rinkesh Shah, Founder of Ignite Intent, Echoes that, And Adds, “Entrepreneurs Get to Retain Control of the Early-Stage Operations. And the Campaign Helps to Catch the Eye of Seasoned Investors.” Shah Sees Many Students Reach Out to them for College Entrepreneurial Projects.

“Once Regulatory Authorities Come Up With A Framework to Give Confidence to Investors, This Can Grow In Scale,” says Rajan Srikanth, Co-President of Keiretsu Forum (Chennai & Singapore), A Global Forum of Angel Investors. SEBI Issued A Consultation Paper in June 2014 that Discusses the Benefits and Risks of Crowd Funding, But Specific Guidelines are Yet to be Framed.

Crowd Funding is Still Limited On Round Size by the Number of Active Investors, and there is Also A Regulatory Limit. VC’s Can Do Much Bigger Rounds If they See the Billion Dollar Opportunity.

Crowd Funding Cannot Replace Angel Investors & Venture Capitalists (VCs), “But it Brings the Early Traction & Recognition that Entrepreneurs Require.

Over 500 Crowd Funding Platforms Globally

KICKSTARTER

(US)

This New York Based Portal, Launched in 2009, is Considered the Crowd Funding Pioneer

INDIEGOGO

(US)

US Based Crowd Funding Portal

GOFUNDME

(US)

US Based Crowd Funding Portal

WISHBERRY

(INDIA)

Founded in 2012 by Former McKinsey Analysts Priyanka Agarwal & Anshulika Dubey

IGNITE INTENT

(INDIA)

Started in 2013 by Rinkesh Shah, A Management Graduate Who Worked with TCS and Infosys.

CATAPOOLT

(INDIA)

Founded in 2013 by Satish Kataria

 

Getting Noticed

When Karthi Easwaramoorthy, Arunkumar Athiappan and Vasudevan Ramasamy wanted to Start Bus Ticketing Portal Ticketgoose, They Conducted Road Shows Across India and the US to Get Investors. They Raised Over $5 Million from 40 Individual Investors and a Company Consisting of 60 Investors, All of Who are Now Stake Holders. “The Crowd Also Created a Network of Mentors Who Provide Useful Ideas for Our Service,” said Easwaramoorthy, Whose Service Now Works with Over 2,700 Bus Operators that Run 20,000 Buses.

Crowd Funding is Not Simply a Matter of Creating A Page On A Portal. It’s Critical to Stand Out in the Crowd If You Want to Succeed. Ateet Bajaj, Who Runs Start51, An Ahmedabad Based Crowd Funding Portal, Says He Conducts Workshops On the Right Way to Make the Pitch and Project A Product. Bahubali Shete, Co-founder of Connovate, Says the Campaign Page Should Have Good Videos and Messages About the Product, and Communicate Clearly What Value the Product Brings. The Venture Used Twitter and Facebook Messaging, Google Ads, Incentive Packages for those Referring Potential Customers, and Even a Facebook Contest to Get Worldwide Attention. “We Soon Had Global Publications Writing About Us, and Steve Wozniak (Apple Co-founder) Tweeting About Us,” Shete says. The Wozniak Tweet Sealed the Success of Connovate, Till then A Relatively Unknown Indian Venture. All Thanks to the the Wisdom of the Crowd and the Kindness of Strangers.

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Crowd Funding is All About Wisdom of the Crowd & the Kindness of Strangers.

Successful Crowd Fund Raises

PEBBLE WATCH

Pebble Technology’s Smart Watch is One of Kickstarter’s Successful Campaigns, Having Raised Over $10 Million from More than 85,000 Funders

OUYA

Founder Julie Uhrman Struck Gold Taking the Crowd Funding Route, Raising Almost $8.5 Million for Ouya, An Open Source Video Game Console Made On the Android Platform

CONNOVATE TECHNOLOGY

This Bengaluru Based Startup Raised $130,000 On Indiegogo for their Device Gecko. It has Since then Been Acquired by Hong Kong Based Binatone.

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