Need some help with your crowdfunding?

posted Apr 21, 2013, 4:01 PM by David Khorram

Greetings, and welcome to our ongoing CrowdFunding conversations!  Today, I am joined by David Khorram of
CrowdFunding Planning who is here to talk about CrowdFunding, the services offered, and the future of the Capital Formation method!  Thank you for joining us today David!

When I first contacted you, I thought we’d only be talking about CrowdFunding Planning, but then you linked seven different CrowdFunding webpages!  I guess the question now is, what don’t you do?  From CrowdFunding News, CrowdFunding Seminars, Qualification Programs, and of course CrowdFunding Planning, you seem to cover all the bases.  

How did you get involved in CrowdFunding?  What makes you so passionate about it?  
CrowdFunding surfaced about 2 ½ years ago, when we were vigorously seeking new business opportunities as the traditional Information Technology marketplace began a major shift.
20 years ago, we began supporting Traditional Information Technology implementations, Data Center Build-outs, Building and Corporate Campus cabling, wiring, fiber & wireless infrastructure and many variations of IT systems, for Systems, Servers, Voice and telecommunications.  
These Local, Regional and National Projects have also included the emerging Cloud Technology Services, as we began a Google Apps for Business reseller relationship back in 2006.  Hence, a major shift and change in the Technology Marketplace.

The process of reaching out to potential clients ( the CROWD) thru the internet with a valuable message about who you are and what you do has been making more and more sense for the last 6-8 years.  We have found not only a great market opportunity, but a strong demand for knowledgeable and skilled services in the area of website development, Branding and market identification.  This has steadily grown our Information Technology  Business Services offering.

Then about 3 years ago, CrowdFunding, and the various technology elements of supporting it within the Internet began to become a viable business opportunity, that naturally leverages off the skills and services we already have been successfully bringing to market for the Small Business, StartUP and Entrepreneur.  

So what exactly counts as CrowdFunding?  How do you define it?  

CrowdFunding has been around in many forms for hundreds of years, when communities, bonded together, to help build a Barn, Home or Civic or Church Building and its amenities, clear a field to farm or build a small dam for water retention or irrigation,  for one or several members of a Common Community.

Today, CrowdFunding is much the same, yet light years of difference.  Modern CrowdFunding has a very high tech, CLOUD basis, relying on the Internet as the communications highway, rather than more traditional methods.   So, any form of promoting an Innovative Idea, Product & Solution, to a Common Community or CROWD, soliciting help and support, typically in monetary pledges, in order to produce this product or service, is today’s CrowdFunding.  
There are a number of sophisticated technologies employed in this process and some of these are third party Portals or Exchanges to handle the transactions and in some way keep them well documented and organized, others include targeted Brand Identity building, and marketing Messaging via Social Media Channels to reach the researched and targeted audience - the CROWD.

The terms “reward-based” and “equity-based” CrowdFunding have been popping up in my research, what’s the difference between these two kinds of CrowdFunding?

Well, right now in the USA, Equity based CrowdFunding has not been fully legalized.  The JOBS ACT, passed by the US Congress and sign into Law ( April 5th, 2012), is being implemented thru a Rules and Regulations process within the SEC ( Securities and Exchange Commision) .  It is to be implemented within 1 year of the legislative date,  at this point the SEC & the White House & Congress has not enacted the Law.

Reward Based CrowdFunding is active and busily raising Capital for many innovative entrepreneurs and helping bring great products and services to market.  Reward base CF is a way to provide, simple rewards, like a personal “thank you letter or T-shirt and Announcement for small nominal contribution, to a Special Announcement, personal meeting/dinner and/or version of the Product or Service and a very public recognition for your support.

With the JumpStart Our Business Startups (JOBS Act) passed last year how are things going to change for CrowdFunding in America?  How are you poised to act with the changing conditions?  

When the Jobs Act legislation is enacted, soon we all hope, it was due April 5th, 2013, the change will be that small investors, the “average Joe” ; and invest as little as $25-100 in a product or service that they like, believe in and want to see succeed, while the Startup, Small business innovator issues a “share” in the business entity, that has the potential to appreciate in value, as the business succeeds.  Our understanding  is that  there will be limits, and qualification criteria, formal registration process and some form of Business “validation” processes, (ie. bank account, articles of incorporation, Patents, Copyright and or Intellectual Property registrations), to ensure the integrity of the entire process.

Our Organization, CrowdFundingPlanning is skilled and structured to Advise and Consult with the Business Innovator;  providing technical knowledge & services to Build their Crowd, that supportive following the understands and wants the “to-be-developed” product or service, utilizing the Electronic Media & Internet Communications Environment, the CLOUD, to develop and deliver that information message.  Our expertise supports the Business with Market intelligence, Brand messaging and the Technology Structure to accomplish this, in a skills transfer mode or as an integral operational service provider to the Entrepreneur.  
The addition of Equity based CrowdFunding, to the mix of Donation, Reward, Pre-Order and Micro-Lending CrowdFunding, will merely add an additional form of CrowdFunding, with a set of additional criteria to comply with in the Process.  This will not significantly change our services offerings, nor the Fundamentals of our proven methodologies to Crowd-Building and then monetizing those relationships in the form of donations, paid in advance orders or general financial support and revenues.

Do you think there will always be room for services like Kickstarter and its reward-based CrowdFunding or will equity-based CrowdFunding eclipse it?

Yes, the Kickstarter form of portal or exchange, will serve a valuable purpose like they already do today.  They, for a fee, operate as a neutral party to fairly exchange the  Funder with a sum of money, in exchange for some form of recognition, or a future delivered product or service, at a definable rate, quantity, etc. as described in the Campaign offering.  When Equity based CrowdFunding is enacted, there may be some logical services to validate or certify the process and ensure SEC, Federal, local laws for “equity” or Ownership, are officially documented and recorded in an official manner.

What do you think the future of CrowdFunding will be like?  Are there more laws that need to be written to cover CrowdFunding in the US?   

Currently, there are numerous legislative requirements and processes that need to be met in all business or charitable transactions, the Internet based CrowdFunding process in also regulated by National Internet Commerce Laws and regulations.  At this point, the systems seems to be working very well.  The general public, the Funder, is very smart and knows what they want and how to validate it in their own minds view.  Like with almost anything that is available to the general public, that strong valuable product or service, that truly delivers on its promise will succeed and those that fail, will fail faster and harder in this high speed global communications environment we have today, the CLOUD.

Thank you for your time David!  It has been a most enlightening conversation!  Do you have any parting words for our readers?  

Well.....yes!   for that Innovative business person with that Great idea.

   “ great ideas never succeed, until they have the opportunity to be offered to the largest and widest potential audience, that may want, need and desire that product or service.  With CrowdFunding, and the Power of the Cloud ( Internet ) you can reach that CROWD and very inexpensively validate and achieve your business  goals and dreams, or along the way find the marketplace (Crowd) that tells you what they need and want that you can provide. ( CrowdSourcing)