SalemNews.com, Salem, MA

Business

October 30, 2013

Getting a kick out of crowdfunding Small businesses like CinemaSalem increasingly turn to sites like Kickstarter for financial backing

Small businesses turn to sites for financial backing

(Continued)

The idea of these new crowdfunding regulations are to make it safer and easier for small businesses and startups to raise money from small investors, just as artists and musicians do on Kickstarter.

The difference is small-time investors in small companies are crowdfunding equity in a company, not just getting goodwill or a token reward. The new law provides a regulatory exemption from the Securities and Exchange Act on the sale of crowdfunded securities, but it also sets limits on how much a company can raise — $1 million in a 12-month period — and provides thresholds on how much can be invested.

Michael Durwin is a so-called visual content expert who ran a Kickstarter campaign to raise money to make a film using Google Glass, a technology that is not yet available to the public except as a test.

This wearable device consists of eyeglasses that can take pictures and video, search for information on the Web or give directions, all of which are projected onto the lens of the glasses and are visible to the wearer.

Durwin, who has done some award-winning commercial video work, wanted to raise $1,500 to produce a short video called “Glass: A Love Story.” He raised $3,700 from 47 backers.

In all, there are about 140 different crowdfunding platforms in the United States. Besides Kickstarter, there is Fundable for small businesses, and Indiegogo, an international platform that funds technology, film, politics, music or charitable efforts.

It’s expected that crowdfunding sites will attract $5.1 billion in funding this year, up from $900 a year in 2010, Durwin said. About 40 percent of crowdfunding projects get funded.

Sites that are all or nothing, like Kickstarter, generally have lower fees than those that allow one to keep a portion of the money if only a partial goal is raised, Durwin said. One should keep those fees in mind. Of the $3,700 Durwin raised, he netted $3,400 after fees.

Text Only | Photo Reprints
Business

AP Video
Looming Demand Could Undercut Flight Safety Six Indicted in StubHub Hacking Scheme Trump: DC Hotel Will Be Among World's Best AP Review: Amazon Fire Adds Spark to Smartphones All Aboard! LIRR Strike Averted Microsoft to Cut Up to 18,000 Jobs Time Warner Rejects Murdoch's Takeover Bid Yellen Says Economy Still Needs Fed Support Cleveland Expects Economic Boom From Lebron Justice Dept. Fines Citigroup $7 Billion Justice Dept. Fines Citigroup $7 Billion Downside of Low Mortgage Rates? Less Selling Cupcake Shop Crumbs Shuttering All Its Stores San Francisco Prepares for Soda Battle Dow Breaks Record 17,000
NDN Video
Heartwarming 'Batkid Begins' Documentary is Tear-Jerker Orlando Bloom 'Takes a Swing' at Justin Bieber In Ibiza Pitch Invading Morons Cause Chaos - @TheBuzzeronFOX Sadie Doesn't Want Her Brother to Grow Up "Maxim" Hotness! See Jessica Alba's Sizzling Spread Two women barely avoid being hit by train Broken Water Main Floods UCLA Orlando Bloom and Justin Bieber Reportedly Came To Blows In Ibiza Meet the Man Behind Dumb Starbucks Chris Pratt Adorably Surprises Kids at a 'Guardians of the Galaxy' Screening NOW TRENDING: Peyton Manning dancing at practice "The Bachelorette" Makes Her Decision Thieves pick the wrong gas station to rob Golden Sisters on '50 Shades' trailer: 'Look At That Chest!' Staten Island Man's Emotional Dunk Over NYPD Car - @TheBuzzeronFOX GMA: Dog passes out from excitment to see owner Baseball Hall of Famers Inducted 'Hunger Games: Mockingjay Part 1' Sneak Peek Florida Keys Webcam Captures Turtles Hatching Morgan Freeman Sucks Down Helium on 'Tonight Show'
Comments Trcker