Looking for new projects for FunderThunder.com

Posted on April 2, 2012 by funder

My partners and I have created a crowdfunding site at www.funderthunder.com which we have been testing in a beta mode for the past several months and are close to ending that phase. Our founders are a group of entrepreneurs with varied backgrounds who looked at the existing crowdfunding sites and felt that they were lacking several key elements necessary to help entrepreneurs get their businesses going.

Our CEO last year was inducted into the Entrepreneur Hall of Fame, several of the founders have built and sold companies for tens and hundreds of millions of dollars and several of the founders have also successfully produced motion pictures and worked in the entertainment industry.

Based on this expertise we have built FunderThunder to work with entrepreneurs, filmmakers, record producers, musicians and authors to get their projects moving toward funding. We have tried to build our site with rules that make sense for both the funder and the project creator. On some of the other crowdfunding sites, a funder’s PayPal/credit card is charged when they make a pledge. With FunderThunder pledges are not withdrawn until the entire goal is raised. Subsequent funding pledges are charged as they are made. When the project hits its funding goal, concurrent with charging the funding pledges we pay the project creator’s account their share of the pledges less our fees. Our fees are paid only when a project reaches its funding goal.

We felt this strategy combined the best of all the other crowdfunding sites. Funders can have some comfort that they will not be charged until the project creator has raised the amount of funds that they believe are necessary to achieve the project’s goals, we do not sit on anyone’s money earning interest while the project creator waits out the end of the project campaign.

Our next step is to start adding more projects to our site, so please let us know if you would like to learn more or post your project on our site. My partners and I would be happy to review your project and marketing plan before posting and working together to make it successful.

When is it Okay to Beg?

Posted on March 21, 2012 by funder

There are several times during your life that begging is the right thing to do. If you are married then you know of some of the times, but it is also the right thing to do if you want to crowdfund a project.

The basics of crowdfunding are simple get a lot of people to each give you a small amount of money until like a mountain stream filling with melting snow it becomes a torrent of cash. The trick is melting the first bit of snow and starting the stream. In the mountains spring comes naturally in crowdfunding nothing comes naturally, it is all work and persuasion

You as a project creator have developed a great project that everyone you meet agree is fantastic; the next big step is listing your project and starting to collect the funds. The problem is that between everyone telling you what a great project you have and having the same people actually taking out their wallets is a huge chasm.

When a crowd comes to look at a project one of the main factors they look at is the amount of current pledges on the project. This is typical crowd mentality; the crowd likes to follow what the rest of the crowd is doing. Have you ever stopped by to check out a new restaurant and it was so busy that you either have to wait a long time or not even able to get in that night. Most people in that situation will add that restaurant to their list of places they want to come back and try. If you get there and it is empty many people will just leave and move on to another restaurant assuming that if no one else wants to eat there it is not worth their time and money.

So if your project has no current pledges, potential funders are going to look at your project and wonder what is wrong with it, if even the project creator’s friends and family won’t back it. The best ways to make sure that that you don’t fall into this abyss is simple suck up your pride a little bit and beg your friends and family to start melting the snow and make some pledges on your project and talk it up on their social networks. This will start the process moving.

I have had several people who have raised hundreds of millions of dollars for various ventures tell me that it was easier to ask people and institutions for millions of dollars then it was to ask friends for only $20 to help start a crowdfunding project moving. In a traditional investor raise you go in with a business plan, financial models and the people you are speaking with have already indicated a willingness to listen to an investment pitch, so it is not really begging for cash.

Crowdfunding is a different animal and requires different skills to really make a great pitch and down and dirty begging is one of the more desirable parts of the project creator’s skill set. The project creator has to explain to their friends why they need the money, they have to explain why it is better for their friends to put the money into the crowdfunding project so other people will support it as well then just have the friend hand them money directly. In your friend’s mind it is easier to just hand over a twenty then it is to go online and get out his credit card and enter into a shopping cart on your favorite crowdfunding site, but that act of supporting the project does so much more than the twenty would do going from one hand to other. It shows the world that your friend trusts you with the twenty and that potential funders should trust you as well. Remember your friend knows you and most of the crowd probably does not. So the more ways you can show that you desire the crowd’s hard earned cash the more likely they are to back your project.

There is no hard and fast rule as to how much money you should raise from friends, but the more you can raise and the faster it can come into the project, the better the rest of the crowd’s opinion will be of the financial viability of you and your project.

Don’t forget that if your friends also share your project with their social and business networks the simple statement of “I helped fund this project” will go a long way toward pushing their networks into your growing pool of funders. So you want to convert them into beggars for your project as well.

Good luck

What is the right funding goal for your Crowdfunding Project?

Posted on February 23, 2012 by funder

Calculating the amount of money you need to raise through crowdfunding can either be one of the easiest parts of setting up a project or the hardest, it just depends.

The basic method to determine is simple, look at your project determine how much it will cost to accomplish your project, then add in the cost of the rewards you are offering plus the costs of fulfilling those goals and last don’t forget to include the fees due to the crowdfunding platform. That total should provide you with your funding goal, simple right?

Now let’s break this down in to smaller pieces.

First let’s define the steps needed to accomplish your project.

If you intend to produce a film you can budget the costs elements of the film, writer, director, actors, cinematographer, sets, lighting, sound, craft services, post-production and editing. All of these items are easily quantifiable and their total gives you the production budget for the film, well maybe. Let’s say you are making an independent film, but a friend of a friend knows a big name actor who might be interested in spending a few days working with you on the set, but his cost exceeds your entire budget up to that point, do you increase your funding goal to get the big name or do you stick with local actors and your original budget. This is an issue that hits every film project no matter how big or how small and the answer may be the difference between the film making or losing money, or even obtaining distribution outside of the filmmaker’s YouTube channel. The greater issue for a crowdfunded film is how much more money can be raised with the big name actor. If the increase in budget size is less than the extra money you can raise, then by all means raise the goal. On the other hand, if the bigger name will not add anything to the fund raising, stay with the smaller goal. The great thing about crowdfunding is that you can exceed your fund raising goal and if you raise enough to hire Mr. Big Name actor then you probably do so.

Film are pretty easy to budget, but let’s say your project is starting a new business. The items to include in fund raising goal become a little more soft and squishy. For an entrepreneurial project you need to look at the project based on reaching milestones. Figure out your milestones and then budget to each one. Your first milestone might be completing a saleable prototype of the product you want to sell. The second would be delivered the finished product ready for sale into the marketplace. You as an entrepreneur need to figure out how much it will cost to reach each of these milestones.

What will be your costs for making prototypes, should they be made here in America or should they be outsourced to Asia?

What about going into production on your product, can it be made in the united States or does it make more sense to build it offshore, what are the time differences in having production done in another country and how does that effect your costs for freight and import duties?

Do you charge your project a salary for your time? If you were working for somebody else you would get a salary, but entrepreneurs often don’t make any money until the new business is starting to generate some cash flow. Who else will you need to hire to meet your milestones and how much should they be paid?

What are your legal and accounting costs going to be for running you business?

Do you need to rent space or can you start this business out of your garage?

Take all of these factors into account and then you have an idea of how much you need to raise to successfully complete your project. Remember we started this exercise by figuring out milestones for your business, it may be necessary to look at each of those milestones as separate projects.

The next issue is how much can you realistically expect to raise from crowdfunding for your project? The amount depends on several factors, including how big of a crowd you think you can attract to your project and the interest level of the crowd. Projects can raise from a few hundred dollars to two million dollars or more. Take an honest look at the network of people you can get to work on building funding interest in your project (for thoughts on how to premarketing your project read our earlier blog post). If you think you can generate a tremendous amount of interest and crowd size with your network and your project, then the sky is the limit on what you can set as your funding goal. On the other hand if the interest and the crowd is more limited than there may be some constraints on how much you can set as a funding goal. There are no hard and fast rules, but you want to make a careful consideration that your fund raising goal does not exceed your funding raising potential.

On FunderThunder if you do not reach your funding goal, then you do not receive any of the pledged funds. We want to give you every opportunity to succeed with your project and that includes providing you with the funds you believe are necessary for the success of your project, if you think it will take $5,000 to make your project a reality then only giving you $2,500 will not provide you with the proper resources and may well become a waste of your funder’s money.

Last but not least in figuring out your funding goal, do not forget to factor in the cost of fulfilling your rewards and paying the crowdfunding platform fees.

Premarketing your Crowdfunding Project

Posted on January 12, 2012 by funder

So you have decided to take the leap and crowdfund your project, congratulations the work starts now.

There are many steps to be taken to create and launch a successful crowdfunding project, this post will discuss the steps needed to market a project successfully. To be upfront none of the existing crowdfunding platforms care as much about your project as you do, nor should they. It is your project and you should be the most passionately involved person on the planet with the success of your project. All of the platforms, including FunderThunder.com, want your project to succeed and will do what they can within their mission to make it happen, but the odds for success increase greatly when you as the project creator stay on top of making your project a success. This is no different from any other aspect of making your project succeed.

To market your project take a step back and look at your project from the eyes of your potential funders, what attributes of your project will appeal to them. Conversely, which groups of potential funders could be interested in the success of your project? Once you have figured out the groups that have the highest affinity for your project, start thinking of how you want to draft your project page and any video offerings to attract those groups. If your project would be interesting to young moms, then you should be emphasizing its value to them, does it provide them more time to spend with their children, does it help children in some fashion. If you project would be interesting to the people concerned with green products and lifestyle, then emphasis those attributes. You may find that several groups might share an affinity for your project, then pick those areas where your project jointly is of interest to those areas and make those items your project focal point.

Now that you have figured out your target market, how do you reach them and get your crowdfunding started. Everyone should have some sort of personal network of individuals who are friendly to you and want you to succeed. Before crowdfunding came along, project creators would go to this network and try and raise sufficient capital to get started. Crowdfunding allows you to still approach these same people and a whole lot more people, but this close network is still as important to you as a project creator as they were before, you just don’t need as many of their dollars for your current project. Like a pump needs to be primed before it starts delivering water, crowdfunding projects need to be primed as well.

Before you post your project, you should have identified your personal network, Facebook friends, LinkedIn associates and others. Personally contact those people who you feel you know well enough to ask them to contribute to your project. Once the project is launched potential funders are going to look at your project and if no one who knows you thinks highly enough of you to help fund your project why should they. These initial contributions should be made as close to the launch of your project as possible so it does not sit there a long period of time without any contributions. Also arrange for these people and others in your personal circle to agree to repost a link to your project where their personal network can find about it. This means having them post it on their Facebook page, on their LinkedIn home page and liking it on StumbleUpon or any of the other numerous social networking sites that they might be a member of. The more places your project is posted the better chances you will find potential funders. It would help if they post your link more than once as entries on many sites move quickly down the page as other people post pictures of their kids doing adorable things.

In drafting your project page, it should finish with some calls for action by potential funders, first and foremost help fund your project and secondly, even if they don’t fund your project ask them if they can link their social network to your project page increasing your potential audience even more.

Next in figuring out your premarketing campaign, find blogs which cover the groups and interests you identified earlier whom would be attracted to your project, there are thousands of blogs which address a myriad of interests and issues. Once you find some appropriate blogs, contact whoever is writing the blog and tell them about your project, when you plan to launch your crowdfunding campaign, why it would be of interest to their readers and why they should blog about your project. This needs to be done a few weeks in advance of your launch date so they will have enough time to respond to you. Not every blog will be willing to help but everyone that does further increases the reach of your project and touches some additional potential funders. Blogs that become interested in your project should be updated on your progress toward funding as your crowdfunding campaign progresses. People who made pledges will be interested in finding out what is going on and the more mentions you get the more people who learn about your project and become potential funders.

It would be helpful to determine if some portion of your project is newsworthy in some respect. What are those newsworthy attributes? Then figure out which newspapers and media outlets would be interested in those points. Contact your local newspaper, radio stations and television stations; they are often looking for local interest stories to fill their pages or airwaves. Certain stories might even be of interest to both regional and national news agencies, so sending them a short press release about the launch of your project can’t hurt. In crafting a press release, help them create the story the way you want it to be perceived. Starting with the attributes you previously created about your project, your press release should emphasis those points. If one of the people involved with your project has a noteworthy story that ties into your project that should be mentioned as well. Due to news department cuts back over the past several years it is up to you to help them find out what is newsworthy about your project, if you don’t tell them don’t expect them to know.

All of these steps are crucial to the premarketing of your project. The more effort you put forth, the better your chances are of getting the funding you want.

Good luck.

How To Create a Successful Crowdfunding Project

Posted on December 13, 2011 by funder

More and more innovators are attempting to raise money for their projects through crowdfunding. Some are successful beyond their wildest dreams, many raise the funds they need and some never get funded. We at FunderThunder have looked at many crowdfunding projects on our site and on many other leading crowdfunding sites to see what has worked, what has not worked and if possible figure out why.

There are several factors that stand out on what makes a successful projects.

First, the project listing must be engaging to the people reading about the project. If you can’t convey a sense of excitement about your project, why would people want to give you money for it. The project listing should describe the project and the project creator in some detail. People interested in pledging want to know what their money is going towards and who they are entrusting it to. You needed to tell them why you came up with this project, what problem are you trying to solve and how did it relate to you. If they can relate to your plight that led to this project then you stand a better chance of getting them to want to fund your project.

Second, if you have the chance and the ability to produce a video to go along with your project, by all means do it. It is amazing the correlation between successful projects and those having fun enjoyable videos. These videos do not have to be large scale Hollywood productions, but they do need to have a start, middle and end that flow. The video like your project page should describe your project and yourself. It should show why you are choosing to work on this project right now. Most important this is your chance to speak directly to your funding audience and explain to them why this project is important and you can be successful once you receive the funding.

Third, a list of cool rewards for your funders. Cool is a relative term. One of our successful FunderThunder projects was to help a US Air Force fighter pilot raise money for a voice over demo tape. His rewards were autographed pictures of him in his fighter jet. The reward had little to do with the project, but it did give you something that could help you relate to the project creator. For some projects, you might be able to provide limited edition versions of your product as a reward or if you are starting a business offer discounts from your services to help build a prospective client base. To come up with best rewards takes some time and you should not just save this step until the final moment and wing it. Remember your funders are getting two things from their backing your project, the opportunity to help make you succeed and your reward. If you want people to help you with your project, give them the courtesy of offering them something pretty cool in return.

Fourth, set a realistic funding goal. Crowdfunding has raised over $900,000 for some projects, but most are much smaller in scope. Figure out what amount you really need to make your project a success, including the cost of providing your funders their rewards. Then double check your numbers one thing many successful entrepreneurs have learned over the years is that projects often longer to finish and cost more than you expect, even when everything goes right. Make sure that your funding goal has that cushion to guard against the unexpected that occur in almost every project.

Last, help create your own crowd. Now that you have set out project proposal in writing and on video, determined how much money you need to be successful and created a cool list of rewards, you need to help create your own crowd. Remember if someone asks you for money you are going to want to know something about them before you just hand over your cash. The same thing happens in crowdfunding sites, so the best way to get the funding rolling is to have people who know and trust start the process. Contact all your friends on Facebook , LinkedIn or other social networking site and let them know about your project. On FunderThunder we have made this step incredibly easy you go to the “Share” button and your project can be shared on over 330 social networking sites. You will need to repeat this process several times as it is amazing how quickly anything set out on one of these links will move down the page as other people post their latest status changes. Next email your other friends and associates who might be willing to help you with your project. Ask everyone to forward your project listing on to their friends, family, associates and social networking pages. It is amazing how quickly that will spread the word to thousands and thousands of people. Once the funders start pledging then other people on FunderThunder or other crowdfunding site will start to take notice of your project and hopefully they will make a pledge and share your project into their base of friends, family and associates. Success often breeds success so once your project starts getting funded it makes it easier to keep the money rolling in, projects which don’t get this boost often languish and never get funded.

Like anything else worth doing, crowdfunding your project takes work, money doesn’t just appear in your account, you have to make it happen.

What makes America Great?

Posted on November 28, 2011 by funder

What has made America an economic giant. It is the ability of its citizens to innovate and create new ideas and new technologies into the next leap forward. Americans have been able to take these steps because as a people we have believed that anything is possible with some determination, some elbow grease and some cool tunes on your iPod.

Despite what some in the media have said, America has not slowed down in its innovating ways the rest of the world has caught on that anyone with a great idea can make it happen with a few simple things. You need a great idea, hard work, a great team and adequate working capital The entrepreneuring spirit is growing all around the world with governments recognizing that new companies mean jobs for their citizens.

America continues to lead in innovation in many areas. Everyday inventors and creators are coming up with new and better ways to make life more enjoyable. Groups have sprung up all across America to help the inventors and creators of tomorrow make it happen today. The biggest problem to all of these people and groups is the age old problem of access to capital.

In today’s economy small businesses can have an incredibly tough time raising the needed capital to start their businesses. In the United States various securities regulations limit the numbers of investors and can make raising relatively small amounts impossible. The typical funding cycle starts with an entrepreneur asking his friends and family to invest in the new venture. When unemployment is over 9% and savings at lows this can be a tough proposition. This friends and family round can be as low as $5,000 and up to $100,000 in total capital raised for a new venture. This money is often used to more fully develop a concept or product and do some work toward proving market viability.

In the 1700 and 1800’s the original entrepreneurs were often pioneers setting forth to settle the vast American continent. They sold their belonging purchased a wagon and farming implements received some money from their friends and family, then set off to follow the American dream. Back then the high tech start up was a farming homestead on the frontier. When they got to their new farm, if they had neighbors they might all pitch in and help raise a barn.

Today the high tech frontier might be a killer app for an iPhone or a new gadget. Someone may have an idea for a film or a music project. The ideas are limitless, unfortunately the cash is not.

The concept of crowdfunding offers a solution to this problem. It extends an entrepreneurs group of friends and family to everyone on the internet. For those unsure about the crowdfunding concept it is the process of placing a pitch for a project, either entrepreneurial, artistic or charitable on the internet where it can be found by a large number of people with the hope that the “crowd” will contribute individually small amounts of money toward meeting the necessary fund-raising goal for that particular pitch. The concept of crowdfunding and crowdsourcing relate back to the 1980’s and has developed over the years along with the evolution of the world wide web.

There currently exists several crowdfunding websites on the Internet, but my partners and I felt that they were lacking certain necessary entrepreneurial elements that we felt were necessary to help people create successful projects or businesses. So we took our decades of experience as successful entrepreneurs and created a new crowdfunding website, www.funderthunder.com, which we feel can work for everyone from the project creators to the funders.

FunderThunder starts when someone launches a project. First they create a project profile page, which in an engaging and informative manner, informs potential funders about the project and its creators. This profile defines how they hope to complete the project with the help of Funder Thunder’s community of Funders, the project funding goal and what rewards they are offering in exchange for receiving funding.

Funders then review projects on FunderThunder. They have the opportunity to ask questions directly of the people involved with the project. If they find a project they would like to support, they provide a credit card number to authorize the amount they have chosen to fund. Once enough Funders have contributed to the project funding goal, all Funders of the project will be charged the amount they have chosen to fund. The project creator then receives the funding, minus the administrative fees given to Funder Thunder.

We look at FunderThunder as part of our mission to help regrow the world wide economy. According to the Small Business Administration “Small businesses—those with fewer than 500 employees—are generally the creators of most net new jobs, as well as the employ¬ers of about half of the nation’s private sector work force, and the providers of a significant share of innovations, as well as half of the nonfarm, private real gross domestic product.” The Small Business Economy 2010: A Report to the President by the Small Business Administration.

It is our feeling that a great crowdfunding site can help reinvigorate the economy by helping small projects become successful and start hiring people all across the country and the world. We are not the only ones who feel this way, President Obama in his American Jobs Act has made several proposal to help crowdfunding sites help entrepreneurs fund their business dreams.

Under current United States law, companies cannot offer equity in exchange for funding a project. The American Jobs Act proposed to change those laws to allow crowdfunding as a way to raise equity in the United States. This process is already legal in various countries around the world.

Republican Rep. Patrick T. McHenry of North Carolina recently introduced a crowdfunding equity bill called H.R. 2930, the Entrepreneur Access to Capital Act, legislation. This bill is consistent with the goals set forth by President Obama. Congressman McHenry’s bill would provide a crowd-funding exemption to SEC registration requirements for firms raising up to $5,000,000, with individual investments limited to $10,000 or 10 percent of an investor’s income. The exemption would erase limits on the number of investors until the first $5,000,000 of equity capital is raised. This proposed exemption will provide smaller investors an opportunity to support startups, which currently is not an option under current SEC regulations. Crowdfunding sites wishing to provide this exemption must be compliant with SEC regulations which have yet to be determined. This bill is still proceeding through Congress and it is unclear when and what the final bill will look like.

With or without the ability to offer equity a crowdfunding platform like FunderThunder can help start up businesses become a reality and jump start a new round of job creation driven by American entrepreneurs and inventors. That is what makes America great.

Welcome to the Funder Thunder Blog…

Posted on November 20, 2011 by funder

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Economy got you down? The key to recovery rests on the inspiration and know-how of small businesses, entrepreneurs, inventors, and artists all over the world! Funder Thunder provides these folks the opportunity to raise project funds as well as “social proof” new ideas.

Funder Thunder was created and founded by a group of creative entrepreneurs who have many years of experience in raising funds for projects. Our CEO Jeff Hoffman (the founder of Priceline.com) is a featured speaker to many business groups across the globe, and has a passion for creating new opportunities.

Join us as we feature, fund, and follow up on thousands of exciting projects in 2011 and beyond!