Crowdfunding your Startup

Crowdfunding your startup: a founder's perspective

Ali Lutebox

Detailing the pitfalls and repercussions of equity crowdfunding for a tech startup

Jan Hammer, a respected venture capitalist at Index Ventures, recently wrote in Tech City News’ Startup Surgery answering the question “If I choose crowdfunding will it put off future venture capitalists?”

He offered a venture capitalist’s view and painted a pretty positive picture of crowdfunding, so I figured I’d let other startup founders in on the harsh truth instead.As a startup founder, my view on this is clear:

Just don’t do it.

There is way too much stigma around crowdfunding.

Venture capitalists tend to focus only on the winners, the successfully backed startups, rather than the hundreds of startups who do not manage to successfully crowdfund.

shutterstock_92161156Nearly all of Jan’s examples were hardware startups that can really benefit from the pre-sales model of crowdfunding platforms like Kickstarter, but not necessarily from equity crowdfunding.

Don’t get me wrong. Crowdfunding has proved extremely successful for hardware startups, art and film projects and the like.

But for software specific tech startups it usually doesn’t make sense to do a Kickstarter campaign. Rather their interest lies in equity crowdfunding, with options like Crowdcube, Seedrs and a few others.

I have a ton of respect for Darren of Crowdcube. I remember chatting with him when he was still developing the concept behind his pioneering, and now hugely successful, equity based crowdfunding platform – and there have been a lot of startups that have seen great success on platforms like his.

Signals of distress

The problem, however, lies purely in negative signals.

As an early stage tech startup struggling to survive and just make it a few more days, negative signals are the worst possible thing you can give investors.

It is all about painting a positive picture, and keeping the momentum going. Traction, no matter how little, is the lifeblood of a startup.

CordaNobelo CrowdFund Your StartUp!: Raising Venture Capital using New CrowdFunding Techniques
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Bitcoin oversupply of Thanksgiving turkeys

by what-to-do-Bitcoining

"The website Assassination Market, a crowdfunding service that lets anyone anonymously contribute Bitcoins towards a bounty on the head of any government official–a kind of Kickstarter for political assassinations. According to Assassination Market’s rules, if someone on its hit list is killed, any hitman who can prove he or she was responsible receives the collected funds.
"Sanjuro’s grisly ambitions go beyond raising the funds to bankroll a few political killings. He believes that if Assassination Market can persist and gain enough users, it will eventually enable the assassinations of enough politicians that no one would dare to hold office

CUSIP Global Services, WealthForge to Collaborate on Crowdfunding  — PR Newswire
NEW YORK, April 30, 2014 /PRNewswire/ -- CUSIP Global Services (CGS), a leading provider of unique security and entity identifiers and descriptive data that enable efficient global trading, and WealthForge, a licensed broker-dealer specializing in ..

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