Category Archives: Crowdfunding Stories

Why Ethereum’s price is dropping

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Venturebeat | | July 13, 2017

Anyone following the cryptocurrency market over the past few months has seen the spectacular rise and pretty dramatic fall of the value of an Ether. The currency rose from the $100 range to the $400 range from May to June; and from June to July we’ve seen it drop back down to the $200 range. The question is, why is this happening now?

With over $500 million worth of Ether raised in initial coin offereings (ICOs) during June alone and a feature on the cover of Forbes, the market has reached fever pitch.  What we are now witnessing is the other side of this phenomenon.

Here are four reasons for the drop:

1. Post-ICO startups are cashing out to reduce risk

These projects have costs. And, for now, those costs are in fiat currency.

While you can buy some things with Ether and Bitcoin, most of the expenses of running an organization and the expenses of the people who work in those organizations still happen in boring old dollars, euros, and yen.

See:  No, Ether Isn’t “Getting Crushed.” Here’s What’s Really Going On.

Let’s assume for the moment that the startup projects are not scams or pump and dump schemes (I’ll get those a bit later). Still, these projects have to get actual money to pay for stuff and, thanks to blockchain, we can see it all happening. So when EOS decides to deleverage some of its ETH risk, everyone knows about it.

And when Tezos, which I predicted would raise $250 million (it was just a little bit under that), $232 Million: Tezos Blockchain Project Finishes Record-Setting Token Crowdsale, it will do what anyone does: reduce risk.

Scale this out to every project and assume for a moment that every ICO is going to take 10-20 percent of its ETH “off the table” and put it in fiat to avoid the “crash that everyone knew was coming, but didn’t know when,” and now you have $50-100 million worth of sell orders coming in at the same time. That’s a decent percentage of the market moving in one direction at once. And that’s just the ICOs from June.

But wait, as they say, there’s more.

2. And they’re cashing out to buy technical talent

Remember why all of these projects are raising money. For the most part, it’s to find talent to help build the vision.

The challenge? Blockchain technical talent is in ridiculously short supply. Combine that with very high demand and you have market forces that my nine-year-old can explain.

There’s a war for development talent, and it’s being fought at the cash register. The fiat cash register.

It is why one article recently proclaimed “Why Brave’s $35 Million ICO May Not Be Enough for a High-Tech Hiring Spree”

3. New investors have come in — with shorter timeframes

I’ll throw one other possibility out there. The advent of new types of investors in the space.

See:  Blockchain Will Disrupt Every Industry

Over the past few months, we’ve seen an explosion in the value of the crypto-market. As a result, any money manager worth his/her salt wants to get “in on the action.”  Everyone wants to be Olaf.

It’s not surprising that Forbes recently profiled 15 New Hedge Funds that Want In On 84,000% Returns. That’s just the tip of the iceberg.

The more “professional” traders are thrilled with month/month returns that ETH and the others are yielding, so naturally they are going to take profits as well. They don’t have the HODL (Hold on For Dear Life) perspective that many of the O.G.’s (Original Gangsters) in the space have.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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GoFundMe donates $75,000 to 75 campaigns for Canada 150

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GoFundMe | by: Bradley Shankar | July 6, 2017

 

GoFundMe has announced it has donated $75,000 CAD to campaigns it says are impactful across Canada, in celebration of the country’s 150th anniversary.

The crowdfunding service donated $1,000 each to 75 different campaigns that aim to help such causes as medical treatment, helping to build a school, supporting Indigenous midwives and rescuing animals.

See: Courtesy of GoFundMe, crowdfunding now comes a guarantee, of sorts.  

Some of the campaigns that GoFundMe has supported include:

 

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Meatme: Crowdfund a cow, pig, lamb or chicken for dinner

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The Memo | By Kitty Knowles  | June 30 2017

Local farmers & lower environmental impact.

Eating loads of factory farmed meat isn’t great for your health, animal welfare or the environment.But too often this doesn’t stop us from hankering for a burger.Luckily, Dutch entrepreneur Victor Straatman founded Meatme.ca – to help you make better decisions about the meat you do eat.

What is Meatme?

Meatme is an online platform that connects consumers to local farmers to support high quality and ethically raised meats.

You just go to the Meatme.ca website, or use the Meatme app and buy a share of an animal. Once the animal’s bought up, you’re sent a box of high quality meat from your local farmer straight to your door.

“It’s like in the old days when people use to split a cow between two families, except Meatme allows it to be shared with many more people, so you can buy a share that actually fits in your fridge in your city apartment.”

Solving a problem

Straatman founded Meatme after moving to Canada, home to 50,000 ‘local’ free-range farms.

You might think this would be the perfect place to source ‘ethical meat’, but when he tried to find local farms online, he was faced with a swamp of poorly designed websites that lacked information or contact details.

Eventually he managed to email a farmer, who replied: “Meet me at the parking lot in North Vancouver in 3 weeks to hand over the meat”. A risk to the farmer, given that he’d placed blind faith in Straatman showing up.

“I realised that this needed to change,” said Straatman.”If we want to grow towards a sustainable food system and source meat with lower environmental footprint, then it should be much easier and convenient.”

The future of food?

Not only does Straatman’s idea have ethical legs, but it’s business-smart.

Shoppers end up with a product that’s (more often than not) superior to what you’d find on the supermarket shelf, and because of Meatme’s low cost structure (it doesn’t own expensive real estate and relies on existing farmers) you pay less for what you get.

Meatme is now raising money from investors to scale across Canada and North America – and its system has been designed so it can be set up anywhere in the world.

In five years Straatman aims to be supporting thousands of farmers over more than 30 Meatme locations.

“We dream of a world with a massive reduction in meat consumption – with no place for factory farms – where we have an abundance of meat alternatives and only eat meat in small quantities,” says Straatman.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

 

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After success on Kickstarter, a 3D printing CEO started his own crowdfunding platform

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Technical.ly Baltimore | By Stephen Babcock | June 28, 2017

M3D is launching a new 3D printer called the Promega, and they’re turning to crowdfunding to help with its release.

It’s a familiar approach for a company who had three prior projects debut on Kickstarter and Indiegogo, but this time is a little different.

See: Too big to flop: Inside Indiegogo's plan to circumvent crowdfunding failures

That’s because the crowdfunding platform was started by the company.

CEO Michael Armani and several team members at the Fulton-based company are running FitForLaunch. The Promega is one of several products that launched on the site earlier this month. Striking out on their own is a bold move, especially for a company that had one of the all-time best campaigns on Kickstarter.

But the success also provided insight about how crowdfunding could be improved. M3D’s VP of Sales and Operations Katherine Otte said other platforms essentially function as a “flash deal site” that stops being a source of deals after the campaign ends. We’ve also heard that marketing is the true value.

Along with their success, M3D also utilized crowdfunding in a unique way. Backers received one of the company’s 3D printers as a reward for their pledge, meaning they were essentially pre-ordering through Kickstarter. With that in mind, Armani looked to create a platform that could be a sustainable source of sales. The Promega is a large 3D printer targeting the commercial market, which is a difference from previous printers that were aiming for consumers. Being a project that’s described as “overengineered,” the Promega is designed so new features are rolled out during the campaign.

See Also: What 10,000 Kickstarter projects reveal about Canada's entrepreneurs

“We wanted steady sales so we created a platform where we could slowly increase the price as we revealed new product details – and it’s working perfectly, sales are steady and predictable, and we have control over them,”

There are a few other features with FitforLaunch. Companies get paid daily rather than weeks after their campaign closes. Trust was also a big issue, as stories of failure and fraud started to show up in the 3D printing world. The platform guarantees that backers who put money down for a product will receive it within 12 months. In a case where a company shuts down, FitForLaunch may even complete manufacturing of a product that is not their own.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Crowdfunding raises a roof: Tips for newbie Crowdfunders

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Charity Village  | Deborah Griffiths | Jun 28, 2017

How could an organization raise a roof for a beloved heritage home before the winter rains set in? A long-time nonprofit client of mine faced this question in spring of 2016.

The roof was going to cost $8,500. The organization had some funds put aside and needed $5,000. How could they gain this amount before winter? This was a modest amount to target and an excellent opportunity to explore crowdfunding and get the job done.

Crowdfunding has enormous potential for nonprofits. From a distance, it looks as though it could solve numerous challenges. But looking at it more closely, would the time and effort spent in learning this system outweigh the funds we gained?

On-the-ground fundraising requires steps, measures, reporting, acknowledgement, and transparent procedures for nonprofits. Would crowdfunding providers wrap those steps into their systems?

There are thousands of crowdfunding platforms from which to choose. How would we find the right one for this project and for future projects for the client?

Here’s how we began the search

We explored reviews from professional organizations and checked with colleagues who might already be using a platform to get their feedback. Few colleagues had tried crowdfunding.

We then checked-out crowdfunding associations: the US-based National Crowdfunding Association, the National Crowdfunding Association of Canada and the UK Crowdfunding Association. These sites discuss industry standards, best practices, and have excellent tutorials, current stat reports, and interviews.

Why go through this vetting?

Because any donor who is serious about clicking on “contribute” to invest in a project wants assurances that their information is secure. They also want to know that the organization would acknowledge the donation and use it as intended.

Our goal was to develop an enjoyable, long-term relationship with a platform that remains current, user-friendly and understands nonprofit business. The platform would have to offer solid payment privacy. Transparency, accountability and donor acknowledgement functions were necessary.

FundRazr

There are many quality platforms from which to choose. FundRazr, based in Vancouver, British Columbia, and launched in 2010 by CEO Daryl Hatton, seemed to be the right fit for the roof project.

FundRazr had established a partnership with PayPal early on and was one of the first platforms to set up a system that embeds into social media. You can link your updates and posts directly into that system and members and followers can spread the word through their communities. They have excellent information sheets, tips, and videos and a responsive support team and a Crowdfunding Success Guide. The set up was quick.

One other plus for FundRazr was their awareness of the benefits of grassroots partnering in rural communities. FundRazr’s collaboration with InvestLocalBC, started by Community Futures Stuart-Nechako, focuses on crowdfunding for community initiatives.

No matter what your location, take a look at how much the platform is putting back into the community, it might make a difference to you.

The campaign

We began the campaign on July 7 by sending out a lead-up article to newspapers about the history of the project and introducing the crowdfunding campaign.

We then edited that article down and distributed it through the society’s monthly e-newsletter with a link to the FundRazr campaign and to Facebook. Potential donors received the information and linked over to the FundRazr site.

We wrapped the tasks into daily operating and worked with the FundRazr team and site format to focus on the campaign and send out thank-yous.

By August 23, we had reached our goal and raised $5,262. The donations came from 32 contributors, all ages, with small and large contributions online and through checks and cash. The roof was up by October.

See:  10 tips for acing your crowdfunding campaign

How did we reach people? We took some advice from Daryl Hatton, CEO of FundRazr, who stressed the need for telling our story in a succinct way. Perhaps our story about the roof of a legacy heritage home needing repair evoked concern, hope, excitement and a willingness to give. Contributing to this simple project made things better and solved an urgent problem.

An interesting point in the campaign occurred when we supported another community crowdfunding effort in our e-news simultaneous to the Capes Roof project. We received positive feedback from this gesture and donations went up.

Connectivity, enjoyment, and social investment thrive in local and rural communities, perhaps because there’s latitude to make independent decisions, shape progress, and collaborate. From our experience, crowdfunding has many levels of opportunities for nonprofits and donors and is the perfect platform for expanding these connections.

A few newbie tips

Check with an accountant before you start. Stay current with information on tax sites to ensure that your campaign fits well within provincial and federal guidelines for donations and providing charitable tax receipts.

Try out a small feasible project first to get your bearings and to gauge what you might need for a larger campaign.

Review the fees that the crowdfunding service provider charges and make comparisons between platforms. Some platforms have monthly fees while others charge a flat rate, a portion of which goes to the provider and a smaller percentage to the payment system. Note that you could be paying out, on average, five percent of the donations to your provider. For my client, having an extended technology team from FundRazr made this a solid investment.

You may like:  Crowdfunding best practices (articles database)

When you’re searching for a platform, ask the same questions donors would ask. How legitimate are you, how private will my information be?

Consider whether you have enough staff to crowdfund. The process requires some time to set up and, to be successful, you’ll need follow-through. If you work with a board and volunteers these people can join your “team.” Platforms like FundRazr have a format for connecting your team and followers.

Have a look at the campaigns the platform is already hosting. Find a few favorites, identify what aspects resonate with you and tailor them to your site. Use your best images for backgrounds and posting. FundRazr has the capacity to brand your crowdfunding site to match the branding on your home site.

Pin your project to the top of your Facebook page and provide share-worthy news about other subjects. This will lead people back to your information without overloading them with your campaign.

If you have incentives that you can provide to donors when they donate at a certain level, this can help. Some people just like to give, so incentives can be an option.

Be prepared.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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$150 Million: Tim Draper-Backed Bancor Completes Largest-Ever ICO

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Coindesk | by Stan Higgins, Alex Sunnarborg & Pete Rizzo | Jun 12, 2017

An initial coin offering (ICO) for a blockchain project called Bancor has set a new industry record, raising approximately $153m in ether, the native currency on the ethereum blockchain, as part of a crowdsale that concluded today.

Data shows a smart contract connected to the sale had collected more than 390,000 ether by the time it ended at 18:00 UTC, an amount worth $152.3m at current prices. As such, the figure is higher than even the funding raised by The DAO, the notorious failed fundraising project that made headlines last year when it lost the millions of the $152m in investor funds it raised in a similar sale.

Overall, 79,323,978 Bancor network tokens (BNTs) were created as part of the ICO, with the top token holders now possessing 83.96% of the tokens, or 66,601,702 BNT. Fifty percent of the total tokens, or 39,661,989 BNT, were sold to the public, while the remaining 50% were allocated for future use.

The ICO attracted 10,885 buyers, according to available data, with more than 15,000 transactions sent to the address for purchases during the sale. One buyer went so far as to purchase 6.9m BNT, or roughly $27m, in the sale.

See:  Don't miss the Annual Summer Kickoff Rooftop Networking session June 22 @The Spoke Club

Launched in 2017, Bancor, overseen by the Bprotocol Foundation, has been pitched as a platform designed to make it easier for users to launch their own blockchain tokens.

Of the remaining funds, a blog post by the company states token capital will be directed toward partnerships, community grants, public bounties and project advisors.

Issues with the sale

As with past sales of this kind, the ICO was accompanied by reports that the ethereum network faced significant transaction loads, resulting in delays for buyers.

However, the project itself was adversely affected by long wait times on ethereum.

According to the Bancor website, an initial funding target was set at 250,000 ether, though this figure was not hard-coded into the smart contract deployed. As a result, a transaction sent on the ethereum blockchain in an effort to change the contract and limit the crowdsale in length did not work as desired.

Due to network disruption and delays holding up this transaction, the company said the crowdsale ended up continuing longer than initially desired. Overall, it lasted an two additional hours as a result of the delay.

Posts on social media further suggest that at least some users saw transaction issues during the sale. One thread on Reddit drew complaints about transactions being dropped as long as 35 minutes after they were sent to the ICO address.

Some participants who spoke to CoinDesk also said that they had experienced delays in transacting, including one who had issues moving their ethers off an exchange for the purposes of participating in the ICO.

One exchange operator went so far as to argue that the ICO had increased transaction congestion, colorfully remarking that larger ether buyers were disrupting the sale.

Notable investors

Another factor contributing to the frenzy is that, as sale was getting underway, Bancor revealed it had attracted new and notable investors.

Among those announced to be contributing funds was investor Tim Draper of VC fund Draper Fisher Jurvetson. Though new to the ICO space – he previously backed the Tezos project ahead of its yet-to-be-held offering – Draper has invested in a number of bitcoin startups in the past few years.

In 2014, Draper made headlines when it emerged that he had bought 30,000 bitcoins during US government auction, later picking up an additional 2,000 BTC during a second sale. As part of the funding, Draper will also be joining the project as an advisor.

The Bancor sale was also backed by Blockchain Capital, an investment firm that focuses on startups in the space.

According to a blog post published today, Blockchain Capital is making its investment via its BCAP token, which it launched earlier this year.

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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Sign of the times: Crowdfunding for scientific research

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Ottawa Citizen | By Elizabeth Payne | June 13, 2017

Eric Fisher is a biochemist who was headed for a career researching heart disease when he abruptly changed course. Now, instead of doing his own research, he has created a crowdfunding platform to help other scientists raise money to continue their work at a time when money for science is scarce.

Labfundr, as the platform is called, is a sign of the times for science funding in Canada.

See: Crowdfunding the Canadian Knowledge Economy

Halifax-based Fisher, who did an undergrad degree at the University of Ottawa and a Ph.D. in biochemistry from Dalhousie University, said he was stunned to see the troubles Canadian scientists were facing when it came to getting funding.

Changes in recent years at the country’s main biomedical research funding body, the Canadian Institutes for Health Research, have caused turmoil in the research community and left many wondering how they can continue their research because funding dollars are increasingly scarce. CIHR reforms included changes to the peer review system and how funding is distributed, among other things.

“There is sort of a quiet crisis brewing. It really is a huge problem,” said Fisher.

He was interested in the crowdfunding phenomenon, which has been successfully used around the world to raise money for scientific research and engage the general public in science — no small thing in an age of alternate facts and anti-science undercurrents.

In Canada, he found, there was no platform to help launch crowdfunding campaigns for scientific research.

“A lot of countries have science crowdfunding platforms. Canada is a little behind in a lot of ways.”

See: Scientists turn to crowdfunding to help pay for research

In the U.S., for example, the American Gut Project, which studies the microbiome, has been called one of the largest crowd-sourced, citizen science projects in the country.

Fisher calls the project, which has raised more than $1 million and engaged many people in science, the “rockstar” of the science crowdfunding world. In addition to raising money for the research, it involves the public by allowing people to compare the microbes in their gut to thousands of others. Similar crowdfunded, open-sourced gut projects are underway in other countries.

LabFundr launched its first crowdfunding campaign last month — to raise $10,000 for CALIPER (Canadian Laboratory Initiative on Paediatric Reference Intervals), a national study of health indicators in Canadian children based at Toronto’s SickKids Hospital. The money raised will be used to expand a database of blood test values taken from healthy Canadian children to provide medical professionals with a tool in clinical practice.

Healthy blood test values, or reference intervals, are typically used by doctors to determine if a patient is healthy or unhealthy. Such intervals for children and teens are lacking, said Dr. Khosrow Adeli, lead researcher for CALIPER.

“This kind of database will assist pediatricians from across the country and around the world in making healthcare decisions for our children.”

Fisher said crowdfunding can fill funding gaps and might support work that helps researchers later receive major funding. It also helps engage and educate the public about scientific research.

“I think things have evolved and now scientists don’t have the luxury of being able to work in the lab and not talk to the public. The anti-science sentiment is proof of that. Science needs to reconnect with the public – that is almost more important in the long-term than helping to fill the funding gaps, which are absolutely urgent.”

Fisher also said he thinks he can have a bigger impact by creating Labfundr than doing research. “I see this as a way I could have a big positive impact.”

As to whether a shift to crowdfunding means governments will be less inclined to support scientific research, Fisher said the two are not comparable, but crowdfunded projects can complement larger-scale research.

 

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The National Crowdfunding Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with both social and investment crowdfunding stakeholders across the country. NCFA Canada provides education, research, leadership, support, and networking opportunities to over 1500+ members and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding industry in Canada. Learn more at www.ncfacanada.org.

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