With every new development in the world, including crowd funding— be it in the field of politics, economics, culture, or the like— comes new vocabulary to describe both the trend itself and the more specific things and processes that form part of it. So it is in the area of newly created, or “startup,” companies. One of these new words is “crowd funding” (a term, incidentally, coined by Jeff Howe in the June 2006 issue of Wired magazine). Crowd funding is one of the best ways for startup companies to get a “leg up” in the modern competitive market. With this system, the owner of the new business outsources various tasks to the general public (otherwise known as the “crowd”), rather than to a particular target person or group. The entrepreneur who conducts business in this way knows that somewhere out there, is somebody who can perform the assigned task correctly and efficiently.
Another newly coined term is “angel investor” (known also by the alternate labels “informal investor” and “business angel”). This term refers to somebody who provides startup companies with the capital they need. In most cases, this investment comes with the angel being given in return a share in the business, in the form of either stocks or bonds.
There are those who have criticized “crowd funding,” on the grounds that people who are paid by the task naturally have much incentive to get that task done as quickly as possible, and very little to actually make sure that it is done properly or is of high quality. But there are also companies that make a livelihood out of making crowd sourcing a lucrative way of getting things done.
One such company is Angel Funder, whose motto is “Crowd Funding Innovation!” They have been working for a while on their website, but now it is just about ready to be launched. AngelFunder works to provide funds for students and for new and existing businesses. Chris Bybee, a national sales development representative at T-Mobile, is its co- founder. Students who apply for a fundraiser get their own page on AngelFunder’s site, and there is no risk involved: If the minimum target amount of money is not made, then the donators simply get their money back. The company also charges a fee of its own, but until August 31 it will be reduced from eight to five percent.
For new businesses— AngelFunder can help those with interesting new ideas— for instance, a new device for the iPhone— put together and run marketing campaigns. Likewise, already- established businesses that are considering adding something new to their marketing line can post that product here, and any interested parties can pre- buy them. The advantage of such an arrangement is that companies do not have to expend valuable resources, and customers know that they want the products and that if the marketing goal is not reached, they will not have to pay anything.
When AngelFunder’s site is fully launched, it will include “launch venture” and “browse venture” areas, in addition to sections on sourcing and fundraising.
Business professionals of every kind, from legal experts to investment bankers, from all over the world now meet at the SoHo Loft to exchange information on the modern consumer market. They have held meetings in New York itself as well as in San Francisco, Atlanta, London, and Abu Dhabi, UAE. Those who have attending such events have gained a great deal from their experiences; they have found the discussions to be well put together as well as informative.
Crowd funding and angel investors are the startup business entrepreneur’s two best friends.