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MAKE: California Needs Investment Crowdfunding: An Open Letter to Gov. Jerry Brown

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Goli at MAKE asked me to write a column on crowdfunding for their vol. 38 print magazine, which comes out in March. I wanted to focus on the state exemption movement with an “Open Letter to Gov. Jerry Brown” petitioning for an intrastate exemption in California.

Goli and I realized that it would be better to publish something like that sooner on the MAKE blog, and then revise it to be more generalized, and not framed as a letter to Jerry Brown, for the magazine. So that’s the plan– and here’s the blog post, which just went up yesterday.

To make the editorial more “actionable,” I created a Change.org petition using the same text, and linked to it at the end. I generally think online petitions are a waste of time, but am hoping this will be an exception.

My co-conspirator on the effort is Mark Perlmutter. A few years ago he tried to interest some California state reps and other elected officials in a California crowdfunding exemption. He didn’t get any bites at the time, but the climate’s different now, so I think it’s going to happen.

Photo courtesy Ted Van Huisen, Flickr, per CC BY-NC 2.0 license

Basic info from SF Rec & Park

Photo courtesy Ted Van Huisen, Flickr, per CC BY-NC 2.0 license

Photo courtesy Ted Van Huisen, Flickr, per CC BY-NC 2.0 license

I spoke with Jeff Suess, the Property Manager at the San Francisco Department of Recreation and Parks. He’s the one who manages their contractor-run properties, including the carousel. He said that the organ had been restored 1997-1998, as part of a restoration of the entire carousel, and the engineer who did it had changed it from a card-based player system to a retrofitted paper-roll based system. This was before Jeff’s time at the department, but he heard that the organ had worked after that for about one year, but then it broke somehow, and it hasn’t played since.

I don’t want to reveal too much at this point, but he told me who has the contract to run the carousel, and also who had gotten the organ running back in 1998. They’re both in the area and seem reachable. He also agreed that it would be a win for all concerned if we found a way to raise the money to get the carousel organ running again. The 1998 restoration was funded by a few organizations, but I’m thinking that this time around, it should be some local crowdfunding.

He also told me that the GGP carousel, which was built in 1912 by the Herschell-Spillman Company, is almost identical to the one in Tilden Park, Berkeley, and that there are trade journals dedicated to the vintage carousel industry– so the expertise is out there.

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How the SEC Listened to the Crowd for Crowdfunding Rules

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[Originally published on PBS MediaShift]

Last month, the Securities and Exchange Commission published its long-awaited proposed rules for the most radical part of the JOBS Act of 2012. These rules set the terms for what’s called Regulation Crowdfunding, under which the general public will be allowed to invest limited amounts in small, unregistered securities. Regulation Crowdfunding represents one of the most momentous changes in U.S. federal securities laws since the Securities Act of 1933, which first established our legal framework for selling investments.

What’s remarkable is the way that the SEC wrote these rules. How much they draw from the crowd and how they’re framed represent another big change in how the SEC is open to working and that has implications for the future of the crowdfunding movement.

Read more at PBS MediaShift

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Online Platforms Give the First Public Look at Private Equity

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[Originally published on PBS MediaShift]

A major change in federal securities regulations takes effect this week, and many people are wondering how it will turn out. It’s now legal — with the proper filings and for the first time in over 80 years — for businesses to publicly advertise for investors. Proponents hope that this change will spur entrepreneurship, job creation and innovation nationwide, particularly in areas outside of the typical startup hotspot cities. Detractors fear that the regs will provide a new mechanism for fraudsters to scam retirees and others out of their wealth. Either way, the system known as “private equity” won’t always be so private anymore — and as of Monday morning, several online platforms discussed below are giving the public its first look at the formerly secret world of startup investing.

Read more at PBS MediaShift

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Your Guide to DIY Crowdfunding Tools (to Avoid Kickstarter Fees)

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[Originally published on PBS MediaShift]

Kickstarter pioneered a set of rules and an uncluttered visual grammar that has become the familiar frame for online fundraising, and many other such crowdfunding portals have since copied or adapted their formula — even sites that started earlier. Now, an explosion of cheap and easy new tools and services makes crowdfunding more democratic than ever, by empowering fundraisers to bypass portals like Kickstarter and IndieGoGo entirely.

Some of these tools enable people to create standalone campaigns on their own websites, where they don’t have to give up the 5 percent-or-so commission that commercial portals typically charge, and they also retain full control over the user experience and their relationship with the funders. In other words, the crowdfunding page will have your branding and domain, not the portal’s, and a portal won’t track and bug your funders for their own promotional purposes.

Other new tools and services empower people to “be their own Kickstarter” and create a multi-user portal of their own, where they can host other people’s crowdfunding campaigns and collect the commissions themselves, or choose not to. They can launch these crowdfunding portals from their own dedicated domain, or else as funding pages integrated within an already-existing web presence.

Read more at PBS MediaShift

Ron Popeil © Image: Housewares.org

Crowdfunding and Direct Selling: A Conversation With Dan Williams

Ron Popeil © Image: Housewares.org

Ron Popeil © Image: Housewares.org

[Originally published on crowdsourcing.org, 20 May 2013]

What would the new K-Tel “22 Original Hits” collection be for Crowdfunding? Chances are, it would include must-have (and top-funded) presale products like a fly-killing salt gun, a 3D doodling pen, a networked video doorbell, a robotic insect toy, spring-cushion shoes, migraine-relieving eyeglasses, a gourmet cooker that clips onto any pot, stickers that prevent you from losing things, and little clips that mean you’ll never have to tie your shoelaces again.

As a lifelong admirer of such clever things, I love how crowdfunding has unleashed a wave of ingenuity in consumer products. The immediacy of their appeal reminds me of some products advertised on TV, like the Robo Stir or Rollie EggMaster. As with crowdfunding, these Direct Response (DR) products are sold directly to consumers from the entities that make them. That’s why I consider online “pretail” crowdfunding, in which backers fund production runs of products as a way of hopefully buying them in advance, as a new, indie, riskier form of DR. The crowdfunding portals have discovered that campaigns fare much better if they include a video, but the DR people have known this all along.

Dan Williams serves on the board of directors and chairs the Internet and Emerging Media Council of the Electronic Retailing Association (ERA), the main trade organization for the DR industry. ERA member companies spend about 3 billion dollars per year on advertising, mostly television, including both spots (“short-form”) and infomercials (“long-form”). I recently spoke with Dan about crowdfunding and DR. Here’s part one of a three-part conversation:

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© Image: Wen Chuan Tan

Crowdfunding: Revenge of the Outsider Ants

© Image: Wen Chuan Tan

© Image: Wen Chuan Tan

[Originally published on crowdsourcing.org, 22 Jan 2013]

Imagine that you’re an ant who’s looking for food. One strategy is to find other ants who are crowded around a large source, like a dropped candy bar, and then attach yourself to their supply line. A second strategy is to strike out on your own and look for undiscovered sources of food: crumbs that you can carry yourself, larger pieces that you may need some help with, or a massive new find that will attract and support its own crowd of dedicated ants.

Like ants, humans also arrange themselves in groups to exploit resources together, and I often think about human organizations in terms of this ant analogy. The first strategy described above is the “insider” approach: identify the most promising crowd of ants, join it if there’s room, and if you’re feeling ambitious, work your way up closer to the food source. The second strategy is the “outsider” route: look for some food that no one knows about, or else try to figure out a new way of finding it. If you hit it big, many more ants will join you, and you will be in front.

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