JAN 29, 2015 12:17 PM
Crowdfunding Takes Off Like a Rocket
Fundraising no longer about where you went to school or where you live
By Margo McCall
Brian Meece started out as a ukelele player. Now he's CEO of the online crowdfunding platform RocketHub. Launched in 2010 by Meece and actor/producer Jed Cohen, tech writer Vladimir Vukicevic, and later musician/linguist Alon Hillel-Tuch, the site hosts users from around the world who post campaigns to raise funds and awareness for projects and endeavors.
Unlike other crowdfunding sites, RocketHub lets project leaders keep the funds if their goals aren't reached. It charges 4 percent of funds collected plus a 4 percent payment processing fee if the project is fully funded, and 8 percent plus the 4 percent payment processing fee if the project doesn't reach its goal.
"The good news is that crowdfunding is on the rise," says Meece, a speaker at Startup Rock Stars, March 24 in San Francisco. "I think of it as social funding more than crowdfunding. We’ve hit this tipping point where mainstream America is excited about supporting idea makers that are worthwhile."
It's the new liking
Globally, crowdfunding raised more than $5 billion in 2013, according to Massolution. And with crowfunding sites popping up all over the world, including emerging markets like China and Brazil, that amount is sure to grow.
"I really think of crowdfunding as the new liking—but instead of clicking on it and forgetting about it, when you crowdfund you’re hitting the more sensitive part of your body—the wallet," says Meece. "It's a whole new level of engagement."
Some of the first projects to use crowdfunding were filmmakers and musicians. "The creative class really taught the rest of the world how to use crowdfunding," Meece says. "Now it’s spun off into different sectors. But the creative class uses it consistently. They are staples."
Crowdfunding is spreading access to capital in a big way. "It's no longer about going to a specific school or living in a specific region. You can create a fantastic story and a core community. It's not just a way to raise money, but also awareness."
Entrepreneurship is hot
The Jumpstart Our Business Startups (JOBS) Act, passed in 2013, legalized online investment in closely held corporations in exchange for funds from non-accredited investors. But the Securities and Exchange Commission is still deciding about how to regulation equity investments. RocketHub was among the many crowdfunding companies that testified before Congress, arguing that crowdfunding will lead to job growth, and empowers investors.
RocketHub is now partnering with A&E to produce a documentary called Project Startup, scheduled to air in the spring. "Entrepreneurship is hot right now. There was a time where being a singer in a band was a weekend thing to pursue. Nowadays it’s entrepreneurship," says Meece. "It’s an exciting time for the country. Folks are not afraid of going down an unproven path and seeing where it takes them. I think we’ll see the next wave of great companies coming out of this."
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