You are sure you have that million-dollar idea that will change the world. Or you want to produce that product that will attract thousands of customers. But you don’t even know where to start… you have the idea but lack the practical expertise.
Why not crowdfund your start up?
Crowdupping is a portal where you can share your start up project and look for a team or material resources, in exchange for a share of the future profits. The idea is quite different from the classical notion of crowdfunding. Normally, if you try to create a project through word of mouth on the net, you can ask users only monetary contributions, ranging from a few cents to millions, and give in exchange a product or service. There exist also equity based crowdfunding platforms, so nothing new in giving some shares to funders.
So, why is crowdupping different? The platform will actually help you search for the skills or the necessary non-monetary resources you would need for the project.
After registration, the user can upload a sketch of the idea, attaching photos or videos describing the project. Subsequently, the creator indicates the skills he needs (e.g. mobile app programming, visual designing) or the resources (e.g. an office or a computer). In return, he may offer part of the shares or profits that will derive from the project. Other users will then be able to apply and supply the needed means. At this point, the founder of the project can choose the co-workers, after controlling the curriculum or materials offered by the applicants.
The platform’s risks are very similar to the challenges of traditional crowdfunding:
- Crucial details about the project are available from the very beginning. The people who actually have the skills or resources to implement it could simply do it themselves instead of offering their performance for part of the shares;
- The institutional environment, depending on the country, might not allow equity-based crowdfunding ;
- Overoptimism about the idea: if it fails the creators might face unfavorable consequences from their team who invested time and elbow grease on creating the project.
However, some other challenges are mitigated by the very nature of this service:
- Founders can choose who they receive help from, therefore the control over who funds, crucial at equity based funding, is higher
- Higher risk, compared to established company, is mitigated by the actual effort a funder must put in a project: it is not about lending some money but actually investing time, resources and capabilities, so it is assumable that they must really believe in the project.
As for now the platform is still in its beta phase. Moreover, since it was founded in Italy, most of the projects are still local and related to the specific country environment.
However, it is possible to find an increasing number of international projects. So, if you want to start your project but need an extra hand, you might want to take a look at this website.
- About Crowdupping
- Agrawal, A. K., Catalini, C., & Goldfarb, A. (2013). Some simple economics of crowdfunding (No. w19133). National Bureau of Economic Research.
- Tsekouras, D. (2014, April). Information Strategy, Lecture 4. Lecture conducted at Erasmus University, Rotterdam, NL.