Crowdfunding

Crowdfunding  is a new way of raising capital which organizations and individuals are resorting to. It allows them to avoid taking debt and going to investors.

Its primary concept is presenting people with  idea, prototype or design and asking them to fund a part of the capital required to build it. They set a minimum amount of money they want to raise and a timeline and will start working on theproject if they reach the target. They also set a date as to when they are going to deliver the project.

Kicksatrter is the most famous of all crowdfunding websites, launched in 2009 it has funded more than $1 Billon, with 135,000+ projects and more than 5.7 million donors.

We intend to do a study of crowdfunding, analyzing the trends, feasibility, market and future prospects.

Also we are doing a specialized case study of Kickstarter as it is currently the biggest innovator in the field of crowdfunding.

We also intend to do a brief study of the organization Occulus which successfully raised $2.4 million by crowdfunding for its Occulus Rift Virtual Reality headset making it one of the very popular and highly crowdfundedprojects ever. Occulus got acquired by Facebook for $ 2 Billion

Our study will be a guide to companies who are looking to raise capital and are interested to explore crowdfunding.

The study will also be helpful for people who are looking to invest money in kickstarters and want to contribute to progressing innovation... 

Introduction

Kaizen eno Yon Dankai – “Improvement in 4 Steps”, a film shot by the Economic and Scientific Section group, Japan in 1951 tasked with improving Japanese Management Skills. Thus Kaizen was introduced to Japan to refer to activities that continually improve all functions and involve all employees from the CEO to the assembly line workers. The success of any concept depends on its continuous improvement. Crowdfunding is a bye-product of the global Economic Meltdown which prevented projects from being sponsored by Organizations and Financial Institutions. To continually improve on innovative minds, a concept was sought to raise capital ethically to finance a project. Alas! Crowdfunding was birth.

Crowdfunding is derived from the broader concept of Crowdsourcing. The vision of crowdfunding is to harness the power of the crowd to fund small ventures, projects that are unlikely to get funded by traditional means, using crowdfunding platforms or social networks, such as Twitter, Myspace, and Facebook.

The concept has helped quite a number of Innovators, Inventors and Entrepreneurs as the case may be in realizing not just the capital to launch their product(s) but also the support of the market and most importantly feedbacks from the market. It also serves as a tool which brings the product to the acceptance of the potential consumers before it being launched.

Video Montage of Kickstarter Projects

            Here is a video montage of several kickstarter project video clips related to film, music and arts. Creativity is flowing...

CRWODFUNDING FOR STUDENTS

The Facebook founder, Mark Zuckerberg and one of the co-founders, Eduardo Saverin both came up with the idea of Facebook (previously called, thefacebook) when they were graduate students at Harvard University.

There are many similar stories of students who founded and built great organizations including profit or nonprofit because they believe in the power of their ideas. Most of the students, despite a great idea can’t even initiate the process of implementing their ideas or beliefs to bring the change that they want to see in the world. This is because of lack of funding or the proper knowledge of the various funding platforms and the associated legal aspects.

In this inter-connected world, physical links with the right people to raise capital are not as important as knowing the right platform to raise funds.

We, the Kaizen team of 5 students at ESIEE in Paris, France have come up with a complete report on Crowdfunding (the full report can be downloaded from here) that helps students to raise funds for virtually any projects that requires monetary support. The report gives you an in-depth analysis of choosing the right crowdfunding platform to ensure the first success of your start-up.

Many students have great ideas but they lack the financial know-how or get too bogged down by the legal aspects of a starting a business or raising funds. Some of you still manage to get a start but still get engulfed somewhere halfway by the complexities associated with raising funds for the projects.

The Kaizen team believes that anyone with a genuine idea, passion for creativity and an open mindedness can generate funds through crowdfunding platforms.

One of the problems that are being faced by almost all the project carriers is setting valuations. It means that they concern about what rewards or how much equity to offer for the amount of capital they want to raise for the project. The most important concern among all the project carriers is how to protect their idea and prevent fraud.

Our study on crowdfunding will help you to choose the right platform to raise funds, understand the advantages, disadvantages, legal aspects, financial know-how and risks mitigation strategies to give a quick start to your project and the confidence to achieve your dreams.

If after reading the report, you still think that you want personal guidance on some aspects of funding for your project then the Kaizen team will always be at your behest. You can reach us with the contact information of Kaizen team members provided within the report and also on our blog.

Why anyone looking to raise funds for their startup, projects or for any social cause should consider Crowdfunding before looking for other alternatives?

Crowdfunding is relatively a new concept of getting funds for your new startup, projects, and products or for any social cause that you strongly feel about. It has gained popularity in the last 10 years and has become the prominent choice of raising funds for many budding entrepreneurs. 

It is not only used by people who are starting for the first time and looking for the funds but it has consistently been used by the big companies to build a customer base, pre-launch a product or advertise their product and services and at the same time see the market response and analyze their offerings to hedge for any risks in the future during actual product launch. 

In 2013, Forbes estimated that Crowdfunding grew to be about $5.1 Billion. Kickstarter, one of the biggest players in Crowdfunding alone had $529 Million raised in 22,252 projects with 3.3 million people funding for the projects. 

The top crowdfunding platforms currently are Gofundme, Kickstarter, Indiegogo, Teespring, Youcaring.

Before looking for the right platform online to raise funds, you need to understand the different business models of crowdfunding and which business model is the best for your project.

Crowdfunding models are broadly divided into two categories-

• Community Crowd-funding 
• Financial Return Crowd-funding

The models such as Donations, Rewards, Pre-Sales, Lending, Equity Crowfunding, Hybrid fall into one of the categories mentioned above. 

To know in detail about all these models and which model is best suited for your project, please refer to out complete report on Crowdfunding <Crowdfunding-link>

There are various sources of raising funds other than online corwdfunding platforms such as through venture capitalist.

The venture capitalists who infuse money in your project takes a significant part of the business and also raising funds for a social cause or any social issue is not possible. 

Moreover, to convince venture capitalists is a different ball game. You need to understand the in-out of your business including the legal aspects of it with the proper financials, showing how your business is going to make money in the due course of time. 

It has been seen that most of the projects that achieve success through crowdfunding platform, in the long run requires a support from venture capital for business expansion. So, even if you are sure of getting funds through venture capital than choosing crowdfunding for the initial stages of your business would make a huge impact in determining the success of the project by helping you to build a customer base, understand and analyze the customers’ response and hedge for any perceived risks in the future. 

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