Design Con 2015

Crowdfunding Components & Risk Assessment

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Brian Fuller
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Re: Timing Issue
Brian Fuller   2/26/2013 6:03:26 PM
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Absolutely. No argument there. 

In the case of Adapteva, I don't think that's an issue. But in cases like Elliott's that's a tradeoff you have to weigh. 

Good point and thanks for raising it!

 

TaimoorZ
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Re: Timing Issue
TaimoorZ   2/26/2013 4:13:24 PM
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"For the entrepreneur, no VCs means a little more control over his/her destiny"

@Brian: I think there's still a trade off here. VC's might be taking away some control but they bring with them expertise and guidance and that's important for startup companies to grow. This might be missing in this case.


TaimoorZ
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Re: interesting idea
TaimoorZ   2/26/2013 4:10:01 PM
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"The return for the investors was early access to design kits, product and so forth"

@Brian: That's interesting. Normally, the investors tend to look for return in monetary terms so that they can compare it with other investments. This doesn't seem to be the case with this company.


Brian Fuller
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Re: Timing Issue
Brian Fuller   2/25/2013 4:54:45 PM
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@syed: have you considered using this crowdfunding approach? I'd love to hear from people who are. 

 

Mr. Roques
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Re: We need a Better measure of ROI
Mr. Roques   2/25/2013 2:51:54 PM
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I would go to those crowdfunding sites first, mainly because they don't require a return, just some perks. Then angel investors (family, friends) and then, VCs to help build the company.

syedzunair
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Re: Timing Issue
syedzunair   2/20/2013 1:23:22 PM
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Brian: 

You are correct. Most of these projects will be so small that they would not appeal to the VC's. The VC's are considered by many to fund only projects that have a guaranteed future. 

syedzunair
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Re: Timing Issue
syedzunair   2/20/2013 1:21:05 PM
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Convincing people might take time but it will aslo ensure that shares are diluted in public and no one holder has a considerable say in the company. Initially people like to keep exclusivity to themselves and share as little of the firm to shareholders as required. 

A VC may be a good option but it would give a large chunk to a single vendor/person. 

syedzunair
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Re: We need a Better measure of ROI
syedzunair   2/20/2013 1:18:42 PM
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That depends on the model you are using to raise money. Companies may opt for an intial IPO too to raise money in the short run. 

Brian Fuller
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Re: Timing Issue
Brian Fuller   2/20/2013 1:13:51 PM
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@taimoorz, good question partially answered in my other reply. Here's the issue with the timing: The crowd-funding sites I've heard of (Kickstarter/Indiegogo) put a strict time limit on the fund-raising period. In some cases, you don't get the money unless you surpass your goal; in other cases you can still keep some of the money if you don't. It depends on how you set it up. 

VCs won't be interested in the vast majority of these ideas because they're small, or not as potentially lucrative as they're used to. 

For the entrepreneur, no VCs means a little more control over his/her destiny. 

 

Brian Fuller
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Re: interesting idea
Brian Fuller   2/20/2013 1:09:42 PM
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@taimoorz, these are two distinctly different crowdfunding experiences. In the case of Mr. Small, he's trying to raise a relatively small amount of money and may or may not be getting traction right now. 

In Adapteva's case, Andreas Olofsson had already built a small DSP company with his (and other founders') own capital. He went the kickstarter route to help fund a rev of Adapteva's technology that, I believe, he couldn't get from potential or existing customers. 

The return for the investors was early access to design kits, product and so forth. 

It's early to gauge the quality of the returns on such projects, but the approach, in my opinion, has been proven to work and the incentives--whether a consumer product or access to design schematics/boards/etc.--seem to be the right ones. 

 

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