2,964 crowdsourcing and crowdfunding sites
When a company decides to engage the crowd, getting a large number of responses is typically one of the main goals. The reasoning behind that is intuitive: by casting a wide net, a company increases the chances of finding a quality solution. But is getting a ton of responses really all that great? A new research paper shows the potential negatives of attracting a crowd too large.
In April 2014, Washington’s Attorney General Bob Ferguson decided to take Ed Polchlopek (also known as Ed Nash) to court. The reason? Polchlopek, president of a company called Altius Management, raised over $25,000 for a Kickstarter campaign for a deck of playing cards called Asylum. After missing the December 2012 deadline and several months of empty promises, the creator went silent in July 2013. Two years on, Polchlopek has now been ordered to pay over $54,000 for not delivering on the campaign’s promises.
Each fraudulent crowdfunding campaign not only undermines the credibility of its creator, but of the entire industry. There are a few resources out there tracking suspicious crowdfunding projects, and we reached out to Rafał Wrona, creator of CrowdFrauds, to find out how he became interested in crowdfunding fraud, and what backers can do to prevent themselves from getting duped.
From an economics perspective, companies like Amazon Mechanical Turk (AMT) and Uber are highly interesting; it’s not difficult to see why GOP candidates have embraced them. By reducing rigidities (like the time it takes to apply and interview for jobs, or minimum wages), sharing economy startups create more efficient labor markets. At a time when almost anyone can sign up on Postmates and earn money as a courier, unemployment can seem to be a truly voluntary phenomenon.
To date, a handful of platforms have had crowdfunded startups make a successful exit. We’ve looked around, spoken with platform operators, and compiled a list of startups that raised money via the crowd and went on to deliver a positive return to these investors (via an acquisition, a share buyback, or an IPO). See the list, after the jump.
The company claims to have grown 3000 percent in the past year, with the last several months being especially fruitful, raising close to a crore each month (that's 10 million rupees, or around $150,000, monthly). The platform’s recent success seems to come from the visibility it has gotten from celebrity endorsements and partnerships.
Pioneers like Zach Braff and the team behind Veronica Mars faced a lot of criticism when they took to Kickstarter to raise money for their projects, as known entities. The RA and Smithsonian aren’t generating the same level of criticism — if any at all. That’s a good thing for crowdfunding: celebrities and big institutions are more likely to put on big, visible projects; deliver on the promises made in the campaign; and raise a lot of money, which is clearly beneficial to the platforms they partner with.
Freelancer, the Sydney-based crowdsourcing marketplace, announced last week that it has partnered with NASA’s Center of Excellence for Collaborative Innovation (CoECI) to create CAD models that can be used by a humanoid robot on the International Space Station.
We speak with Wealth Migrate CEO Scott Picken about the advantages of real estate crowdfunding platforms over REITs. "Crowdfunding enables people who want to be in control of their lives, take responsibility for their decisions and be accountable for the results," he says. "This is why we focus on only two things: education and solutions. We ensure that we educate people so that they can make informed decisions as to what they want. Each person’s needs are different and we are creating the tools to empower themselves to make the best decisions for them and their families."
Several days ago, TechCrunch reported that CircleUp, an equity crowdfunding platform focused on consumer goods brands, raised $22 million for a fund of its own, which will match investments made on the platform by others. To find out more about the initiative, we reached over with questions for the company’s COO and co-founder Rory Eakin. He was kind enough to provide the answers after the jump.
Realty Mogul, the real estate crowdfunding platform, announced yesterday that it has raised $35 million in a Series B round. The financing was led by Sorenson Capital, with previous investor Canaan Partners also taking part in the raise. The investment continues a trend we’ve seen over the last few months of prominent crowdfunding platforms receiving funding of their own to grow operations.
Perhaps the most helpful crowd-powered projects are those that provide information to the medical field, allowing doctors to track and get warning signs of potential epidemics. That information has the potential to save lives, or at the least save people money on medical bills. It’s not surprising, then, to see more and more countries implementing crowdsourced databases.
Crowdcube announced earlier today that the Sugru crowdfunding campaign finished with over £3.5 million ($5.4 million), well above its £1 million target, from 2700 investors. Perhaps more impressive is the fact that the campaign broke two equity crowdfunding records, according to the platform.
Equity crowdfunding proponents talk a big game about the model’s benefits: it’s transparent and democratizing, allowing the little guys to invest alongside the seasoned veterans. While that may be true in theory, in practice, equity crowdfunding has produced few exits that have generated a return for the crowd investors. That’s why Crowdcube’s announcement yesterday that E-Car Club, a UK-based ‘electric car sharing club for businesses and communities, comes as very good news for the industry as a whole.
We recently reached out to Guy White, managing director at Catalyx, to find out more about his company and about his thoughts on the crowdsourcing space more generally. After the jump: the second half of his response, which focuses on the crowdsourcing industry; the first half (focused more on Catalyx) was up yesterday.
We-Test is a Tel Aviv-based crowdsourced testing firm that launched earlier this year. Though it's hardly the first quality assurance company to leverage the power of the crowd, founder and CEO Eran Arye believes it is different enough from the incumbents to find success. Read on to find out why.
We recently reached out to Guy White, managing director at Catalyx, to find out more about his company and about his thoughts on the crowdsourcing space more generally. After the jump: the first half of his response, which focuses on Catalyx; the second half will be up tomorrow.
The campaign was off to a fast start, quickly raising €1m, and breaking the Indiegogo record for the most contributors. To commemorate the occasion, Indiegogo put out a useful infographic, revealing information about the backers of the campaign. Some of the most interesting information was about the backers’ locations: not surprisingly, most of them came from Europe, though Americans also made a good showing, placing fourth behind the UK, Germany, and France.
Sony has launched First Flight, a crowdfunding platform that aims to fund employee projects, in a bid to highlight and market test innovative ideas coming out of the company. In addition to crowdfunding ideas, the site also functions as a ‘co-vision’ and an e-commerce platform. First Flight, currently open only to Japanese customers, launched with three projects: two products available for pre-order, and a proper crowdfunding campaign that has already hit over 50 percent of its $21,500 target.
Shenmue III, the long-awaited sequel to the classic games Shenmue and Shenmue II, is finally in development, and the Kickstarter campaign to fund the game is already a success. In fact, it broke the record for the fastest game to crowdfund a million, despite the fact that the game’s announcement resulted in a flood of visitors the platform wasn’t prepared to deal with. Since the initial push, however, the funding has slowed considerably.