Crowdfunding: Funding through crowd donations!
Recently attended an event organized by
OPEN SV on The Rise and Evolution of Collaborative Funding. It was an exceedingly
informative session with panelists from Redpoint Ventures, Fenwick and West,
Sheppard Mullin and Double Fine.
The panelists
provided a holistic view of Crowdfunding with questions spanning from its concept
to legal implications, success stories of companies launched through
Kickstarter (a leading crowdfunding platform) and the overall future of
crowdfunding. The moderator from Fenwick and West facilitated the event well
and helped steer specific points in the discussion.
Aurangzeb Khan an
entrepreneur with extensive experience in the semi-conductor industry spoke
about his experiences of raising capital through crowdfunding. He spoke about
his experience as an entrepreneur raising funds conventionally as opposed to using
crowd sourcing model for his latest venture. Riaz Karamali another panelist and a corporate lawyer covered the
legal implications and shed light on threats which the companies could
encounter raising finances through crowdsourcing. Riaz indicated that while a
broad framework has been put in place, a lot has to be established with regards
to rules adhering to dos and don’ts in the crowdfunding world. The profound
discussion followed questions and answer session from the audience with a lot
of keen to be entrepreneurs looking to venture the crowdfunding world.
Participants were keen to know what link the entrepreneurs must maintain with
the investors who fund a particular project. Justin Bailey an entertainment
professional and another panelist at the session added that investors not just act
as sponsors of the company and its products but they also act as marketers and
customers of the product after its launch. While to many out there the concept
may seem overly simplified a lot has to be done in terms of forming forward and
backward linkages with sponsors. In an example Justin mentioned that thousands
of dollars are being spent on postage and sending souvenirs to millions of
sponsors around the globe in case of a newly established company. It was truly
enlightening to see how the web and other social networking sites like Twitter
and Facebook are also used to leverage marketing and fund raising efforts of these
new ideas. Firms closely monitor the increase in the website hits of these
newly launched idea-companies being launched through crowdfunding platforms
which truly indicates that if the idea is good, obtaining funding can be a
reality.
On the whole it
was an evening well spent with renowned professionals courtesy the professional
and dedicated team of OPEN SV, which helped me learn a lot about the recently
buzzing funding source; crowdfunding.
