This is a guest post by Lorie A. Parch, a writer, editor, and content strategist in Los Angeles.
It’s an often used pun but nonetheless a true one: crowdfunding is really getting crowded. What that means is there are many, many project creators whose good ideas aren’t being seen or heard (maybe yours is one of them), simply because they can’t be found. It also means that, increasingly, new platforms beyond the big ones have a harder time being found. What that creates for potential supporters of and investors in these businesses is a struggle to find the right campaign to fit their investment criteria.
So what if one tool could help all three audiences and level the playing field for smaller campaign creators and platforms? That’s a dream that Peter Einstein, the founder of CrowdFunding4All™ (CF4ALL™), has been working on making a reality. It all started in October 2012, when the former advertising creative director/copywriter presented what was then a simple mock-up of a crowdfunding-specific search engine at the 1st Annual Global Crowdfunding Convention & Bootcamp in Las Vegas. It was an immediate hit; Einstein knew he had something. But he wasn’t satisfied with creating a search engine. He wanted to make the crowdfunding universe fairer for everyone involved, but especially for project creators and smaller and niche platforms.
Einstein and his team are about to launch a powerful, all-purpose crowdfunding tool he hopes will do just that. CF4ALL Crowd-Powered Project Search™ allows users to search across all platforms using criteria such as location, type of campaign, funding status, platform, and categories like music, health, and film. Simply put, it will allow potential funders and other users to easily and quickly compare and contrast projects to see whom they want to support. If they want to fund something, they can click through to the platform’s site to see more about the campaign and give money.
Several thousand campaigns are already in the CF4ALL search network’s database, including every current campaign on RocketHub, Indiegogo, and Kickstarter as well as a number of other platforms. CF4ALL’s CrowdCredits™ bring “crowd-power” to the search process in the form of a virtual currency – Einstein calls it “The Social Currency of CrowdFunding”™ – that can be donated to a project to show support. Doing almost anything on the CF4ALL site accrues a user more CrowdCredits. If a user of CF4ALL.com registers or browses, for instance, they automatically rack up credits.
What this means is that donors can show love to projects by giving the project some or all of her CrowdCredits. The more CrowdCredits a project receives, the higher it ranks in CF4ALL’s search results. A popular project could end up on the site’s homepage, in its “Trending Projects” section, which features the hottest campaigns, across platforms, in real time. So project creators can get a big lift in visibility to other prospective donors if their social network uses CrowdCredits to show their support. Einstein says that CrowdCredits can also be a way for funders of equity projects to show their support for a project beyond the allowed financial caps.
We sat down with Einstein recently to ask him a few more questions about CF4ALL and where he sees crowdfunding headed, on the eve of the start of The 2nd Annual Global Crowdfunding Convention and Bootcamp, in Las Vegas, where CF4ALL’s technology will be used to power the voting for the Funders’ Choice nominees in the annual Crowdfundie Awards, to be held at the conference.
The Crowdfundamentals: What need does CF4All fill that you felt was lacking?
Peter Einstein: From the perspective of the funder there’s a lot of confusion out there, and more as we get into the equity space. They’re interested in supporting projects, and they may be looking for some to invest in. There’s no simple way to vet those projects. Let’s say you’re looking for a biotech project run by women in your Zip code. With the CF4ALL’s Crowd-Powered Project Search you’ll be able to find them quickly and compare them—and also know which ones the crowd like the most. This speeds it up from the investment standpoint.
From the supporter standpoint, our technology allows you to find the project no matter what site it’s on. CrowdCredits give people a whole other way to support friends and family. They may say, ‘Wow, this is great; I’ve been accruing all these CrowdCredits, so I’m going to give them half of my 1,500 Crowd Credits because I think it’s a great project.’ Especially if you give them on day 1 of a campaign, that may have even more of an impact on the project’s ability to be fully funded by coming in early and showing your support. Within those first seven to 10 days, if you get from 20 percent to 25 percent of your funding, then your chances of being fully funded are much greater.
TCF: How do project creators stand to gain?
PE: From the standpoint of the project creator, being on CF4ALL.com makes your project more visible. If you’ve got 40 people in your network—you can say, Just go to CF4ALL sign up, earn CrowdCredits, and give them to my project..’ It’s even easier if your friends are heavy users of crowdfunding sites anyway.
If you’re on a small, specialty platform and you think, I’ll go with these guys because I have a better chance of visibility, but then you’re reaching a small fraction of your potential audience. It’s another way for you to become visible by people searching on our site for, say, music-related projects, but may not know your platform even exists. So, again, it’s very helpful to the small project run by somebody who doesn’t have a big following, who’s not a celebrity.
TCF: What’s in it for the platforms?
PE: From the standpoint of the platform, it not only levels the playing level, it allows small guys to survive against the big platforms. The focus should be on finding good projects and giving them support, and once they’re on our site they’re visible to the whole world … Platforms that are part of our network will have the CrowdCredits button on their site. This means visitors earn CrowdCredits for their activity on the platform’s site, just as they do on CF4ALL.com. That gives the platforms a real point of difference. We only have a handful of Early Adopter platforms now, but we’re ready to add another 50 platforms and work together. There’s strength in numbers. Individuals can only have so much visibility but if they all work together, if we have 50 platforms working together, all of a sudden we have a lot of people.
TCF: How will you encourage participation?
PE: Part of this is just working with the platforms and giving them a new tool that they can use with their project creators. So as a project creator you let your inner circle know, so that the day you launch your project it gets these CrowdCredits and hopefully shows up on the CF4ALL homepage as a Trending Project. It’s the same concept that Reddit uses, though I’m not saying that we’re going to have 80 million people. Reddit is for news articles; for us it’s projects. We’ll be working with blogs, too, so people can donate CrowdCredits specializing in certain areas, like music. It’s really all about being more of this collaborative support system. It’s what crowdfunding is supposed to be about: people with a good idea gathering support, the social currency of crowdfunding. We see this as being an incredibly valuable tool.
TCF: How so?
PE: There’s no other crowd-powered project search engine for crowdfunding. This is not a simple thing that we’ve managed to do. We’ve been able to map this data; it’s all coming to you in a very coordinated, consistent fashion regardless of which platform it’s from. This will prove invaluable when we get into the investment space. If you’re looking for a particular kind of a biotech project, as an example, you want to make sure it’s the best biotech project in that space. You’ll want to do your homework; this is a vetting tool. With CF4ALL’s Crowd-Powered Project Search it’s very easy to find these projects and compare and contrast. If you were searching for them on Google it would be hard to find any valuable project information. You’d be drilling down, but not be sent to the right platform. We think it’s making it easier for everyone, from the standpoint of the funders, project creators, and platforms. That’s why we’re calling it a Crowd-Powered Project Search and Support network; it goes way beyond a search engine.
TCF: Can you talk about the concept behind CrowdCredits?
PE: We think it’s the glue that will help crowdfunding to maintain its tremendous growth. The CF industry is doubling in size every year. It’s an amazing growth rate, but is it going to be sustainable, or are you going to find that more projects are getting lost in the crowd, fighting for attention? Even with all those tips and techniques [about how to have a successful campaign], even the best platform, the most popular one—Kickstarter—their failure rate is higher than their success rate. Once you start stripping away the top tier, those raising $1 million or more, it’s not such a happy story. What one thing can you do to make everybody’s chances of being successful greater? The answer needed to start with an agnostic crowdfunding project search. But it couldn’t end there.
TCF: What are next steps for CF4All?
PE: We’re in the process of developing relationships with some of the iconic leaders in the entrepreneurial space, so that we can become the entry point for them to reach future crowdfunders and help them achieve real, sustainable success after they’ve funded the first phase of their dreams. The important thing to keep in mind is that crowdfunding is just a tool. It’s great to have the money, but if these people don’t think of themselves as entrepreneurs or serious business people and the money gets misused and frittered away—then we’re really concerned that the whole industry can suffer tremendously.
Accredited investors—these people can afford to take big hits. If they lose $10,000, they can live with that. But small investors, if they lose $500 here and there, they’ll be on social media complaining about it, that the project was a good idea, but the founders didn’t know what they were doing, etc. Our real concern here is that without the right mentorship project creators can’t succeed, so that’s what we’ll be focusing on in the future, to help people think like the entrepreneurs and creative people that they are. That’s the direction we’ll be taking. We’re looking at this from a much broader perspective. There are a lot of people out there who have a lot of great information to convey, speaking to the same people over and over again. But crowdfunding is something brand-new and we see ourselves as the nexus where it all comes together, where the crowdfunding community meets the entrepreneurial community.