Rapid Access International, Inc.
Small companies and entrepreneurs are finding it increasingly difficult to find sources of capital to build and grow their businesses and ideas. In the United States, banks are not lending to small businesses without significant assets or sales records and this has created a funding gap for entrepreneurs. Venture capital is very risky and expensive and the terms are usually quite severe for the entrepreneur. In view of all these difficulties with funding, a new and innovative way of financing businesses and entrepreneurs and even artists or social causes has emerged. It is called “Crowdfunding.” In this model, people network and pool their money and other resources together (primarily through a site on the Internet such as Kickstarter or Indiegogo) to support efforts initiated by other people or organizations (such as a restaurant seeking funds for expansion, disaster relief efforts or social causes to help areas of a city recover from disaster or economic destruction, etc.) . Artists use crowdfunding to seek support from fans. Political candidates use Crowdfunding to collect campaign funds from their supporters. Independent film writers and producers use Crowdfunding to fund new film projects, and game and software developers can raise money for creation and distribution of gaming and software products they are working on. The possibilities are endless.
Popular crowdfunding sites like Kickstarter and Indiegogo are among the major players in this new type of funding mechanism for entrepreneurs and social causes.
If an entrepreneur wants to use crowd funding as an investment vehicle, the Internet is used as a means of communication to put up a kind of “solicitation” to find donors or investors in the idea or business plan. Typically, online communities are used to solicit pledges of small amounts of money from individuals who are typically not professional financiers (like banks or venture capital firms, for example). There are a number of models or forms that Crowdfunding could take including:
In the United States, the financial industry is heavily regulated so it is difficult to allow full investment freedom through Crowdfunding sites. The Entrepreneur Access to Capital Act passed the House of Representatives last November and would let small, innovative companies tap into a large pool of small investors by selling them unregistered securities. That would give small-business owners more access to capital and very quickly. A companion bill is currently stuck in the Senate, but it will likely include lower funding thresholds and tighter regulations than the House version. At the moment the Senate version of the Bill has not yet passed but is likely to be approved by Congress in the end. A critical problem could be state regulators who are likely to impose local level regulation on crowdfunding. Currently, crowdfunding is limited to donations ? unregulated except as business entities.
Kickstarter（www.kickstarter.com）: This company requests people to apply to Kickstarter in order to have a project posted on the site through guidelines that are provided on the site as to what types of projects will be accepted. Project owners choose a deadline and a target minimum of funds to raise. If the chosen target is not gathered by the deadline, no funds are collected Money pledged by donors is collected using a payment program provided by Amazon and initiating projects requires a U.S. bank account.
Kickstarter takes 5% of the funds raised; Amazon charges an additional 3-5%. Projects launched on the site are permanently archived and accessible to the public. After funding is completed, projects and uploaded media cannot be edited or removed from the site.
There is no guarantee that people that post projects on Kickstarter will deliver on their projects or use the money to do their projects. Kickstarter advises sponsors to use their own judgment on supporting a project.
Indiegogo （www.indigogo.com）: This is an international crowdfunding site founded by Slava Rubin, Danae Ringellmann and Eric Schell in 2008. Its headquarters are in San Francisco, California and has hosted over 45,000 funding campaigns in areas such as music, charity, small business and film. It originated in the charity world when the founder used crowdfunding to raise funds for cancer research after the death of his father.
Crowdtilt （www.crowdtilt.com）: Officially launched this month, this site expands upon the collective fundraising model pioneered by Kickstarter to enable raising money for any project including parties or social events. Crowdtilt allows users to create a fundraising campaign with a tipping point (or a cut off point). If the fundraising effort does not meet the set amount, the donors are not charged. Crowdtilt allows users to fund any event or cause. Originally, the founders intended the site to help charities raise money, which Kickstarter prohibits. One couple paid for their wedding using the crowd-funding service. Other successful campaigns have paid for gifts, vacations, and even a garden for one of the applicants.
Rockethub （www.rockethub.com）: is focused on creative projects such as music or fashion design. Creatives ? including musicians, filmmakers, photographers, theatre producers/directors, writers, entrepreneurs, fashion designers, etc. ? use RocketHub to raise funds and awareness for particular creative projects and endeavors.
RocketHub approaches the fans of artists directly for outreach and fundraising. This means that project owners, i.e. Creatives, choose a timeframe deadline and a target funding goal. If the selected funding target is not reached by the deadline, the project owner is still able to keep the collected funds.
Crowdfunding is a unique and innovative way to raise money for small companies, art or design projects (including Manga or gaming projects), relief projects (such as after an earthquake or flooding), and even personal or social causes.
Entrepreneur Access to Capital Act http：//www.forbes.com/sites/scottedwardwalker/2012/01/13/crowdfunding-bill-stuck-in-the-senate/2/
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