Here is our second interview in our 2 part series on crowd funding.
At RISE, we were curious if professional investors were contributing to new ideas through such crowd funding platforms with recent changes in the way new companies get formed. We reached out to two local venture capitalist firms but were not able to find one that has helped fund a venture through these tools. However, we heard from several local entrepreneurs and new startups that have launched successful crowd funding campaigns.
We caught up with In.gredients to learn about their crowdfunding experience.
1. What crowd funding tool did In.gredients use? IndieGoGo.
2. How much did you raise and in how much time? Did you raise funds outside of the crowd funding tool? $15,455 in 10 weeks. Yes, we raised funds outside of this campaign.
3. Did you have any traditional investors fund your project through the tool? No, that’s not what the IndieGoGo platform was used for. IndieGoGo was a great way to raise funds from our community and reward contributors with perks at our store.
4. What did you expect before launching your crowd funding campaign? We thought we’d gradually engage folks in our cause, but were really surprised and humbled when so many people jumped on our bandwagon and supported our mission almost right away. It was very affirming!
5. What tips would you give a startup to set up their crowd funding campaign for success? Be thoughtful, honest, and generous. Crowd funding is about building community and building relationships with people who care about what you’re doing. Be mindful that if you’re crowd funding, you have to involve people in the buildout of your product or project, and that involves engaging people during a waiting (development) period. Have plenty of ways for people to interact with you and engage.
6. What’s the status on In.gredients? in.gredients opened this month! The wait is over!
In.gredients had the honor of being listed in Entrepreneur Magazine’s 100 Brilliant Companies of 2012 issue.
According to a recent article in Entrepreneur Magazine from the August 2012 edition, “The Jumpstart Our Business Startsups (JOBS) Act, signed by President Obama earlier this year, will dramatically change the nature of early-stage funding.” This new legislation “allows non-accredited investors to participate in funding rounds”, according to Forbes. Also, the amount of funding raised by a startup that does not require regulation has been expanded to $1 million annually as long as the crowdfunding platforms used are accredited. Some review may still be required by the Securities and Exchange Commission (SEC). This means that an entrepreneur with a new idea can more easily use crowdfunding tools, or public fundraising online platforms that give financial supporters equity or rewards, legally. Previously, all investors had an accreditation requirement and had to disclose their investments to the SEC.
So how does this change the way companies get started?
1. Lower barrier to entry. Now, entrepreneurs can get their concept to market quicker and barrier to entering the marketplace is significantly lowered with crowdfunding sites like Kickstarter and non-profit funding platforms like IndieGoGo and Start Some Good.
2. Gain support early. Entrepreneurs can use crowdfunding programs to gain the support of family and friends that is displayed publicly for others to follow. Successful crowdfunding campaigns can also be used as proof of a minimally viable product that can be necessary for later stages of funding with bigger investors.
3. Spread idea far and wide early on. With the power of social media, a well-crafted crowdfunding campaign has the potential to expand virally beyond geographical borders and entrepreneurs can get their concepts in front of more eyes and attract more dollars that will help them succeed.
4. Public involvement in innovation expands. Any member of the public can now be a part of new initiatives and even the smallest financial contributions can prove value of a new product or service and promote innovation. This is important because now members of the public can help drive new ideas and products in the marketplace and be a part of their success.
At RISE, we were curious if professional investors were contributing to new ideas through such crowdfunding platforms with recent changes in the way new companies get formed. We reached out to two local venture capitalist firms but were not able to find one that has helped fund a venture through these tools. However, we heard from several local entrepreneurs and new startups that have launched successful crowdfunding campaigns. Here is the first interview of our two part series!
1) Why did you choose a crowd funding approach to help startup your initiative?
Positive Footprint was initially composed of 8 high school students that wanted to volunteer around Austin. About two months after we created our first volunteer event, we began seeing requests from other high school students that wanted to join. Quickly realizing the potential of our organization, we opted to crowdfund our program budget with the hopes of getting our name out and drawing the interest of potential donors.
2) How did you choose your crowdfunding program?
When searching for a crowdfunding platform that would fit our organization, we opted to go with name recognition as the top factor. In November of 2011 we applied and were accepted into Groupon Grassroots, after receiving encouragement from a Groupon Employee.
3) How did crowdfunding help you get started?
We identified our first 100 donors; great folks that wanted to help our students get involved in the Austin philanthropic scene.
4) How much was raised in funding through the program and in how much time? How did the funding program work? (i.e. people pledge, then if you hit a goal, the funding is secured - Kickstarter)
In 72 hours we raised $1,040 to sustain our programming for the next year. We had to get 45 people to donate $10 in order for our campaign to be funded. Thankfully, we were able to accomplish this on the first day.
5) What tips would you give someone on how to make their crowdfunding campaign successful?
I’d suggest to take the time to create a marketing plan. Our campaign included almost 100 pre-crafted Tweets, an e-mail blast and a coordinated Facebook profile picture change, among other things.
6) Where is your program now as a result?
As a result of the attention our campaign gave us we’ve received over 70 applications from high school students, found several organizations to partner with and have now raised the necessary funds to launch a second group.
Thank you to Positive Footprint founder, David Guzman, for sharing their crowdfunding success and tips with us. We’re thrilled to hear of a successful Austin youth volunteer program that was funded from the crowd! Stay tuned for two additional local crowdfunding interviews in this series…
When summer rolls around, days by the pool, late summer dinners, and vacations roll around too. It can be hard to stay on-focus during the ‘relaxation’ season, or even if we do, our partners, customers, and clients may be taking time off so it can be difficult to achieve goals we’ve set. So we asked several local entrepreneurs what they do to avoid summer ‘burn out’. Here’s what they said:
Focus on Streamlining and Back’burner’ed Items on your To-Do List
When the summer hits, if business gets slow, I begin to focus on process and systems to streamline the next rush of clients. By using this time to reflect on the metrics, analytics, and results of the past quarters we learn and are better able to serve our next customer. Also it is the perfect time to continue to foster those leads and connections that you weren’t quite able to do when you were out finishing work for your current clients. Your marketing efforts might not be seen immediately, but they come in handy several months down the line.
- Ruben Cantu,CORE Media Enterprises
Take Some Time for Yourself and Help Your Customers Do the Same
In my business, to stay engaged and inspired during the summer, we go tubing, play tennis, and catch some rays with our company dog Heidi. We do most of our business during the summer, so it’s not necessarily the “relaxation” season for us. We allow customers the flexibility of scheduling their tennis lessons at convenient dates, times, and locations to fit their busy schedules. Many of our customers are traveling businessmen and vacationing families looking to play a fun and healthy sport during their “relaxation” period. Through our unparalleled customer service and our talented variety of tennis instructors nationwide, customers stayed engaged and sign up for lessons throughout the summer.
- Andrew Marcus, MyTennisLessons.com
They get the same breaks you do to work on their other stuff – just like you can take that same opportunity yourself. You both know when you’re working, you know when you are “off” and you’ve structured your time together and in between so it works for both of you
Notify Clients of Your Time Off and Help Clients When They Are Away
Let clients/customers know in various ways you’re keeping them in mind during their breaks, vacations, and when schedules have to change. It is super simple now to forward them relevant posts, articles, or podcasts you happen to have cross your own path along the way.
[Client] downtime (when their customers are on vacation) is a perfect time to work with clients on strategy and help them refine their goals.
Define and use breaks as refreshers rather than interruptions.
When Jesse Porter, Home Repair Program Manager at Austin Habitat for Humanity, applied to pitch at the RISE Social Innovation Fast Pitch competition, he thought he would be one of three participants. After a wave of new entries leading up to the event, he arrived to find out he was one of thirteen. Jesse applied to pitch a home repair database idea without his team knowing, but he knew they all had the same goal, so he’d give it a try. The Austin Home Repair Coalition (AHRC) that Jesse is a part of formed to help reduce redundancies that occur among home repair providers when home owners or residents request home repairs or services from several different companies or organizations. If each home’s repair history can be recorded in one central location, members of the coalition such as Austin Habitat for Humanity, American Youthworks, One Home at a Time, and Meals on Wheels and More, can prevent repeating work that may have already been completed, saving the resident and company time and money. AHRC has set out to build a database and Jesse was pitching for funding and resources to make it happen.
So Jesse arrived at the Fast Pitch competition in unknown territory. He says he is confident when talking about his companies repair services in groups at work or with clients, but pitching to a live unknown audience forced him to push his boundaries. He spent the two hours leading up to the event practicing his pitch and timing himself on his phone. Did he prepare for questions? “I was counting on them from the judges,” states Jesse. “I couldn’t say everything I wanted to in a minute or two so I alluded to aspects of the project hoping they would ask for more details. And they did.”
So what was the result? “I didn’t win, but I did it,” said Jesse. But, he did win. As Jesse was leaving the event, an audience member chased him out to the parking lot to offer help. Another attendee contacted the coalition separately after the event. Between the two, AHRC has found the time and talent (technical knowledge) necessary to build this home repair game-changing database. The project is not yet complete, though the group is currently working on usability improvement.
So what’s next for the AHRC? It is about to launch a website (located at: www.RepairAustin.org) and is focusing on how to build advocacy among the public. It is seeking grants and funding and spending time highlighting the benefits of gathering information about the money spent on home repairs collectively (among coalition members) to report the impact on the Austin community. Any home repair and services companies or organizations that are interested in the project or joining the coalition are invited to public meetings held on the second Tuesday of every month at Meals on Wheels and More.
How will this database project change the residential landscape in Austin? “For money that’s so hard to get, we may as well be as efficient with it as possible and reduce redundancy,” states Jesse.
We’re inspired by Jesse’s courage to participate in the Social Innovation Fast Pitch competition and the progress he and the AHRC have made in just 4 months since the event. We consider this a BIG win.
We asked the RISE community for stories of how RISE has changed their path or enhanced it. Here is a first-hand account from DebbieJayne, a RISE 2012 attendee who found her inspiration at the event!
Meet a Budding Entrepreneur
My name is DebbieJayne and I am a photographer, I like to capture the emotions of local Austin musicians. I’m from from Harlingen and moved up to Austin after my junior year of college.
After nearly a decade in retail sales and customer service, I decided as a personal prerequiste for my start as an entrepreneur, to devote a few years to the world of temp work. I went from one company to another studying what was going on and how they handled every day situations in a multitude of perspectives while running an office or sorting out paper work. And with medical issues that have slowly embodied my every day life, I also needed to find something I would be better suited for not having been accepted for disability assistance. Meanwhile, I’m taking photos of these musicians sharing their souls with me as it lifts my spirits.
So, January 2012, I decided that I needed to differentiate myself from all the other awesome photographerss out there doing it for free. I needed to be different (which always came easy for me). And because of the experiences I had at RISE 2012, I knew it was finally time to embrace that about myself.
I continue to call Austin my home for that reason. From the first time I mingled, I felt the embrace of the community. I was no longer considered weird for my outside-the-box thinking. And everyone around me was just as expressive with their thoughts, their motivations, and above all, their actions. People didn’t just sit around and complain here. They reacted with change. And I knew I was in the right place.
My Connection to RISE
Years after moving to Austin, I would reconnect with my college sweetheart and he loved me enough to drag me to RISE. I had been trying to make my concept of sharing Austin music and art, more personal. I had never had a business of my own and though my spirit was high, my pockets were empty.
After arriving at the RISE 2012 Keynote and knowing that Robert Rodriguez was going to be speaking, I found a seat in the front row so I wouldn’t miss all of the action (I could also take some great photos). There were other amazing speakers, but Robert’s was the one that hit home for me. He spoke of how not knowing was just as important as knowing. And he had finally validated my eagerness of jumping into something without having a set plan, without understanding the dilemmas that could arise or what could get in my way. He told everyone something that I had already found out for myself—that not knowing holds you back. Useless information simply weighing you down. At least that’s how it was for me. When all was said and done that night, I felt lighter somehow. Like I once did when I was a kid… like I could fly.
I continued the week going to sessions that I felt would give me a well-rounded idea of what I needed to do to continue in my quest. I met some incredible people that had done so much for themselves, but most importantly, not by themselves. I learned how important and crucial asking for help is. I also came to appreciate how helping one another does so much more than trying to help ourselves. Then, at week’s end, I was excited because I heard some rumors that Robert Rodriguez would be at the RISE Closing Awards Bash. He was and was awarded the Most Inpirational Story of the Year award and while onstage, he engaged the audience by asking them questions on their abilities. His children (whom he also shared the stage with) happily raised their hands indicating they were up for such roles. I too, had my hand raised. I was chosen from the audience and pulled up on stage to meet a real life entrepreneural celebrity.
Robert, (on first name basis with him in my head) challenged me that night, standing there shaking his finger at me. He asked that I look at this round glass mantel piece every day from then on and make something out of my ideas. I made a promise that I would add to the Austin community and told him of my intentions in earning my own award the following year because of my successes. RISE helped me to move my ideas into actions and introduced me to people who had already done the same and successfully. They didn’t charge me to take part in bettering myself, but they did challenge me in ways that I couldn’t be more grateful for.
I am currently developing a media company, FOCUSOGRAPHY. I came up with a word that explains what I wanted to do, what I had begun. FOCUSOGRAPHY is the idea of bringing social networking and photography together to market music or anything art-related. It is a start-up company with the goal of keeping musicians and artists (financially) sustained in their own city, the place they call home- while peers and likeminds share advice and experiences through motivation and inspiration. We promote local music, art, and all things related. We hope to provide experiences that open your eyes, that teach you something new. And we’re putting it all out there in print.
Our first issue will be available no later than ACL 2012 (October). You can expect that part of the proceeds to every show will go to local children’s charities.
We also have a show this Saturday (June 30th) at Club 606 on 7th and IH 35 from 9-11p. We’ve pledged $500 to Groundworks Music Program (classes to low-income preschools which provides emotional, cognitive and social development). We will continue to raise funds until we meet or exceed our $500 pledge. And we invite everyone to come join in the fun. We’re going to have a variety of acts sharing their talents while LIVE online (+FOCUSOGRAPHY on Google hangouts), for those that are stuck at home or behind a computer screen.
Also, SaulPaul, a rapper/musician who delivers “music with a message” and another local entrepreneur whom I also met at RISE and uses his powers for good, and FOCUSOGRAPHY will be joining forces to raise funds for a Harlingen charity after the start of the new school year. SaulPaul is relevant while he tells of his past. He talks about how he had to make certain choices with nothing more than a desire for a better life.
All in all, that’s what FOCUSOGRAPHY is all about, making things happen through motivation and inspiration. We must not forget that the desire for change can start with baby steps. Thank you to Robert and RISE for helping me take those first steps - sometimes they are the hardest.