Tap Into Your $7+ Billion Social Network Funding Pool to Launch Your Business…CrowdFunding

If you can’t ask your family and friends, and friends of their friends, and so on and so on, to financially support your endeavor, I’m extremely confident that your  endeavor may need some refinement.  For those of you who have an idea, are in need of funding to make that idea come to fruition and most importantly are willing to tap in her social network for that funding, overcrowding is for you.  If you have an idea and are passionate about it, don’t give up…never give up.

 Steven Covey’s The 7 Habits of Highly Effective People, “Habit 1: Be Proactive

If you haven’t read this Covey book, quite simply, you need to (or listen to the audio tape).  With respect to Habit 1,  envision two concentric circles, one within the other – an outer circle and an inner one with the inner circle ten times as small as the outer circle.  The outer circle represents your “Circle of Concern.”  Your Circle of Concern are those challenges in your life which “appear to be” beyond your control (e.g. health, children, president elect, war).  The inner circle represents your “Circle of Influence.”  Your Circle of Influence represents those concerns which are not beyond your control – they represent concerns to which you have some control over.  Hopefully you recall the initial dimensions of the circles – the outer circle is ten times larger than the inner circle.  The objective is to make the inner circle as large as the outer circle – it represents you taking control and responsibility over your life and what you are capable of achieving – becoming “response-able.”  In the words of Covey, “being responsible for our own lives…our behavior is a function of our decisions, not our conditions.”

Reactive people neglect their inner circle and tend to focus on the outer one, signifying their ability to change his situation.  Don’t be reactive..be proactive.  How can you tell the difference between a reactive (outer circle) versus a proactive (inner circle) concern?  The simple litmus test is this, I will be excited when I raise $50K – Reactive, Outer Circle.  I am going to raise $50K – Proactive, Inner Circle.  So let’s raise that cash, shall we?

What is CrowdFunding

Crowdfunding at is core is leveraging the collective to support an effort.  Most of us in one way or another have been a contributor to a crowdfunding effort – perhaps you gave a donation to the Haiti Earthquake Relief or the Hurricane Katrina tragedy.  These are just a few examples.  Unfortunately, initiating a crowdfunding effort to attract potential investors in your company is illegal.  Meaning, soliciting investment capital from the general public for the most part is illegal without the approval of a regulatory body such as the  Securities and Exchange Commission.  Since most in the early stages seeking capital will most likely not be seeking an accredited investor and and those who do will most likely not have any need for the thirty-five $100.00 each potential non-accredited investors this is probably not your concern.  Due note however, that the House H.R. 2930: Entrepreneur Access to Capital Act and the Senate version, S. 1791: Democratizing Access to Capital Act of 2011,  is attempting to change that.

In the meantime, if you are looking to raise small sums of money to help your business launch off the ground, there are several available right now that allow you to do this (or perhaps you have a tool or resource that you can leverage in the crowdfunding space).  For those iPhone enthusiasts, Elevation Dock raised more than $1.46 million.

Crowdfunding Sites

Company – KickStarter
Overview – Claims no ownership over the project(s) and work/product produced.  An all funding by due date or nothing model.
Capital Raised – 130+ MM (as of Jan. 2012)
Processing Fee – 5% (via Amazon Payments)
Projects Funded – 17,000 (as of Jan. 2012)
Specialty – Creative projects

Company – Indiegogo
Overview – Open to any and all types of projects.  You get to keep what you raise (for a higher fee).
Capital Raised – 1+ MM (as of Jan. 2012)
Processing Fee – 4% (or 9% if you don’t reach your goal)
Projects Funded – 17,000 (as of Jan. 2012)
Specialty – Creative, entrepreneurial, cause-related projects

Company – FirstGiving
Overview – Open to any and all types of projects.
Capital Raised – 1+ B (as of Jan. 2012)
Processing Fee – 7.5%
Projects Funded – 8,000 (as of Jan. 2012)
Specialty – Non-profits, people, cause-related projects


Company – Kiva
Overview – This organization focuses on lending your money as an investor for impoverishment causes.
Capital Loaned – 301+ MM (as of Jan. 2012)
Processing Fee – 15%
Projects Lenders – 747,956 (as of Jan. 2012)
Specialty – Kiva works with microfinance institutions on five continents to provide loans to people without access to traditional banking systems

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