Monthly Archives: August 2014

Top 5 Reasons Why Equity Crowdfunding is a Catalyst for Economic Growth!

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Now that Texas has become the 13th state where small businesses are allowed to solicit funds in exchange for equity, I find several advantages for growing the economy.  This disruption of traditional accredited investor practices yields new opportunities through alternative financing. (ie – Equity Based Crowdfunding) Finally, the little guy has a place at the table.  I am so glad I moved here from DC back in April 2013.  At first the heat was getting me down, but now I see the catalyst for economic growth.  Don’t get me wrong, Texas has many economic advantages for living here, but this new law will make it even more desirable.

I fully understand the trials of obtaining financing for any business deal, then to be heaped upon by another barrier to entry, the accredited investor (millionaire status).  No matter who you are in the United States of America with a great product or service that society needs and wants, you can have a shot at the American Dream through Equity Based Crowdfunding.  If you don’t have a great idea, you can still own a piece of someone elses great idea.  Only drawback is that you will have to move to Texas or any of the other 12 states allowing intrastate Equity Based Crowdfunding.  The opportunities are alive and well.

Real Estate

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There is a built-in caste system in real estate: those with money and those without it.  Well, it used to be that way, but now there is a chance for those people that spend their weekends with the latest real estate guru claiming to teach them the SECRET of how to invest and flip property. The only SECRET is that you need money.  With equity-based crowdfunding you can do more than flip one or two properties: you can buy commercial property, build subdivisions, rehab old office buildings into condos, and convert brown sites into green sites. Did I mention Data Centers?  The sky’s the limit.  There are multiple platforms to choose from: PatchOfLand, RealtyShares, Groundfloor, Groundbreaker, EarlyShares, PropFunds, FundRise, EquityNet, and RealRite, to name a few.  There are many options for participating.

Energy

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Oil and Gas

I’ll be honest, the only thing that I know about oil and gas I learned from watching “The Beverly Hillbilly’s”.  The politics and pollution parts I know all too well.  But I will not begrudge a person to make a profit. I just wish oil companies would come up with cleaner ways of doing business. So for you would-be oil speculators, you may be able to fund a single well, or multi-well oil and gas drilling projects through a company called EnergyFunders.  If you strike oil, black gold, or that Texas Tea, remember who told you first.  I’ll go on record, I want a 1% cut.

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Alternative Energy

According to Mosaic, “Alternative energy is power that comes from nontraditional and non-polluting sources like the sun and wind. For centuries people have harnessed the renewable power from the sun (for heating and light) and wind (for transportation), but its use fell out of favor around the time of the Industrial Revolution. Now nearly 200 years later, we are realizing the dangers posed by burning fossil fuels to the environment, economic costs caused by rising prices, as well as national security risks from dependence on foreign energy sources. At the same time, non-traditional energy sources are experiencing prices drops as innovation and market maturity take hold. Outside of wind and solar energy, other types of alternative energy include geothermal, tidal, and biomass.” There are multiple platforms to choose from such as: Mosaic, SunFunder, Palmetto, Collective Sun, and OurCrowd, to name a few.  Mosaic goes on to say, “Over half the states could have rooftop solar that’s as cheap as local electricity prices by 2017. Solar energy is currently the fastest growing segment of the renewable energy market.”

The Solar Foundation’s highly anticipated National Solar Jobs Census 2013 found that the U.S. solar industry employed 142,698 Americans as of November 2013. This figure includes the addition of 23,682 solar workers over the previous year, representing 19.9 percent growth in employment since September 2012. During the period covered by the Census, solar employment grew 10 times faster than the national average employment rate of 1.9 percent.

Tech-Startups

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Whether you need a few thousand dollars to build a prototype with 3D Printing, or you are writing software code for your stealth project, you will probably need seed money to get started.  Not all campaigns are successful, especially if your product is a dud.  At the same time, you may have built the best thing since sliced bread, but it doesn’t mean a thing if nobody knows about it, and you can’t get the project off the ground.  Equity Crowdfunding gets your project in front of more investors, and helps you gain customer validation.  This will make your life much easier in future rounds of financing if necessary.  There are multiple platforms to choose from like: Startup Valley, OurCrowd, AngelList, CircleUp, CrowdValley, Fundable, Launcht, SeedInvest, VentureHealth, and RockThePost, to name a few.

America doesn’t make things anymore, and we need to change that.  We need software developers, inventors, and makers.  Tech startups create high paying jobs, something every economy needs.

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Energy Civic & Community Projects

State and local governments should take notice when budgets are cut in half. Civic Crowdfunding is a disruptive way to raise funds for community projects like parks, marinas, and roads. It can also fund school projects not funded by the state.  It can help fund local non-profits that benefit the community so the government does not have to.  My personal belief is that cities should upgrade their workforce with job training in software development, manufacturing technology, and 3D Printing.  A great example of that is the FlatIron school in New York.  I plan to duplicate that school here in San Antonio Texas through the South Texas Technology Council, but the only difference will be that it will be crowdfunded through donation based crowdfunding.  If you, or someone you know, has an interest in Civic Crowdfunding, you should attend Kickercon.

Energy Performing Arts

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Music

I don’t know about you, but music is getting worse.  I believe true artisans that actually play instruments, have been drowned out by the synth-pop, hip-hop, no-message culture.  I believe that if you are going to write a song that you have to be able to look your parents in the eye and sing it. If not, maybe reconsider what you are writing is garbage.  I blame primarily the music industry that distributes that garbage.  Now there are thousands of great musicians and bands out there that are just struggling to get by.  They probably don’t know how to self promote themselves through social media because they are too busy starving as an artist.  Well I have to break it to you, you have to be part musician, part business person, and may have to crowdfund your first album.  You are in luck because their are tons of music platforms out there, such as: Kickstarter, IndieGoGo, PledgeMusic, Sellaband, RocketHub, ArtistShare, Artiste Connect, ArtSpire, GigFunder, Pozible, to name a few.

Now keep in mind, most if the platforms are not equity based, but musicians have to watch every penny, but that is not true with the film industry.

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Film

Back when I lived in the DC area, I had the fortune of meeting one of the creators of the “Blair Witch Project” a $248M blockbuster with a budget of $25,000.00.  They used an outdated Hi-8 Camera for the whole deal.  Back then, $25,000 for a film was unheard of, but even more disturbing is that they used social media to pitch that movie and got Hollywood’s attention. Hollywood was not prepared for what happened after that. Tons of Indie films creeping into the industry.  Nowadays several movies are getting crowd funded by wealthy notables already in the business. From Zach Braff to Spike Lee, to Mr. Joe the Plumber.   So what this means is that creativity has come full circle.  Just a few years ago, somebody discovered Justin Bieber on YouTube. (I’d like to punch that guy) You can make a film and it may sell.  You can invest in a film that may sell.  But you have to obtain a filming budget.  Most cities have have incentives for filming in their city, so check there first, then start a campaign.

There are multiple platforms to choose from like: IndieCrowdFunder, CinemaShares, MediaShares, Kickstarter, IndieGoGo, to name a few.

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So in theory, more real estate deals, more solar panels, more tech startups, more civic projects, more films, more musicians not starving make equity based crowdfunding the most disruptive economic development tool on the planet.  Every city should have it’s own platform.  Join us @ www.kickercon.com

 

Crowdfunding Disruption: How will it change society?


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Crowdfunding Disruption:  How will it change society?

I love when I hear some pundit say crowdfunding should not be taken seriously, or it is not real investing.  AS IF…  I didn’t know this 10 months ago, but I know it now.  Crowdfunding is revolutionary and it disrupts so many layers of the sales process that I have write about it.  Let’s just state the obvious.  To be in business you must sell a product or service that people want and/or need.  To get that business off the ground you need financing.  Traditional financing has been put on notice.  I mean, why should an entrepreneur subject themselves to that sort of torture when they can crowd fund it?  I’m not saying that it is a panacea, but when done correctly, it can be highly successful.

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Traditional Financing through banks, venture capitalists

In my most humble and accurate opinion, title III has been taking so long because the SEC has been getting pressure from the fat cats on Wall Street.  There is no reason to pay commissions and fees to an organization, when the average platform charges between 1% and 5%.  Be that as it may, the blood is in the water and the sharks are swimming. And in some cases devouring great opportunity.  Look at the recent success of Oculus Rift and Facebook.  Out of nowhere a company raises $2.5 million on Kickstarter then gets bought by Facebook for $2 Billion dollars.  You better believe some investors are trolling Kickstarter and IndieGoGo for the next big deal.

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Research and Development (R&D)

Let’s say you have a product idea for a startup or an existing business, but funds are short after monthly expenses.  When you are a startup, you won’t have a billion dollars of R&D budget like Microsoft.  You have to be agile and guerilla market that deal.  Crowdfunding on a rewards based platform is a great way to kill three birds with one stone.  You are able to build your prototype or working model, and you are able to prove customer validation through a successful crowdfunding campaign.  The successful campaign has actually done your public relations, your sales pitch, your story, and your market penetration – all-in-one.

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Main Street Projects

My favorite campaign to date is Solar Roadways.  This project was vetted and funded twice by the US Federal Highway Administration. It won the GE Ecomagination Challenge “Powering the Grid 2010”, and maintained the most votes in 2011.  Of course this project was highly successful, but would the traditional investors show their love for Solar Roadways?  I think not.  I think banks would be reluctant to invest in solar roadways because of politics.  But we don’t have to worry about that because Solar Roadways is busy getting work done in and around Idaho.

My favorite platform, next to IndieGoGo is Solar Mosaic, for obvious reasons.  When the states and banks won’t finance your solar panel project talk to my friends over at Solar Mosaic.  They have a plan for you. Other projects I like for personal reasons are Qardio and RevoLights.  I need to keep in shape at my age, but carrying a BP cuff is out of the question unless I have Qardio.  Living in the Texas heat, and waking up late doesn’t bode well for bicycle riding unless I do it at night.  That’s where RevoLights come into play. Trust me, it’s only 80 degrees at night versus 100+ degrees during the day.  But my all-time favorite product so far is Ministry of Supply.  Their clothing satisfies my uber tech geek factor to the tenth power.  Let’s face it, the best thing that came out of Will Smith’s last movie “After Earth” was the clothing that adapted to the environment. Am I right? C’mon.

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Direct Response Television (DRTV)

Wait! Stop! There’s more! For this free introductory offer you also get… If that’s not crowdfunding, I don’t know what is.  I don’t know if Crowdfunding will totally disrupt DRTV, but I think DRTV needs to find a collaboration point with these platforms or create their own.  The way people buy in the future will be dictated by mobile and the Internet of Things.  That’s a whole technology blog for another time.  The baby boomers are the last remaining shoppers watching the shopping channels.  It will be interesting to watch this whole process develop.  Shopping as we know it is on the verge of rapid change.

So, in short, I feel a change is in the air.  A sort of positive revolution through exponential times.  In this age of social media it really is ‘Who do you know?’ and ‘How many do you know?’

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