With the backing of Springfield venture capital and the help of a national public relations firm, a new crowdfunding portal splashed on the scene March 6 to help businesses gain their own proper kick start.
On March 21, Springfield-based CrowdIt plans to move in among the first tenants of Missouri State University’s business incubator, The eFactory, at the Robert W. Plaster Center for Free Enterprise and Business Development.
The startup was the vision of Jason Graf, a business intermediary at commercial brokerage Murphy Business & Financial Corp., who partnered with Paul Freeman – a co-owner of San Francisco Oven before it was purchased by Bruce Swisshelm – and Markus Pope, a former chief technology officer at PaperWise Inc.
Together, with the help of Springfield-based Baron Venture Capital LLC, the trio has more than 50 entrepreneurs in the first week who have set up accounts and are in line to receive website promotion from CrowdIt.com, when it goes live in June. The organizers’ goal is for more than 250 accounts by then to draw help from the crowd with financing, social networking and peer review features.
“I’ve had a lot of ideas for startups growing up and throughout my career, and oftentimes I was stopped or inhibited by capital,” Graf said. “Capital was always an immediate issue.”
‘Dreamers’ to ‘believers’After watching a segment on “Rock Center with Brian Williams” about an entrepreneur who raised nearly $1 million for his startup on a
Kickstarter.com campaign, Graf became enamored with the idea that the public could provide the funds needed to launch creative ideas.
The crowdfunding model where donors pledge financial support toward projects that typically must meet minimum goals has garnered attention nationwide in recent years through websites such as
Indiegogo.com.
Graf, who worked with Freeman at Murphy Business & Financial, began to develop the idea, eventually enlisting the technical expertise of Pope.
Their concept allows “dreamers” to lean on “believers” with the help of “suits.” Graf said dreamers are the entrepreneurs; believers are those who support the idea; and suits are the capitalists and advisers with the knowledge to offer support.
Graf said the website would allow dreamers to have partially funded projects – a unique feature among crowdfunding sites – assuming at least 30 percent of the goal is reached.
Peer reviews are enabled through social networking tools embedded on the site. He described the site as a cross between LinkedIn and Facebook with crowdfunding as the backbone.
“Instead of us sitting behind a desk and picking projects to fund, they will get to pick,” said Graf, a former small-business owner and current Score mentor.
CrowdIt backersLast June, Graf said the partners wrote the formal business model and pitched it to about seven groups of local investors before connecting with Guy Mace of Baron Venture Capital. Mace and his son Colby Mace, former Siemens Turbomachinery Solutions president and CEO, started Baron Venture with unnamed investors in August 2011.
Colby Mace said the concept was different enough to stand out.
“I was familiar with the crowdfunding space, but our primary interest was to learn about what made these guys different from the 800-pound gorillas like Kickstarter,” Mace said.
Both Mace and Graf said federal legislation in the form of the 2012 Jumpstart Our Business Startups Act would soon allow equity investors to use crowdfunding websites to sell shares of stock, once the Securities and Exchange Commission has ironed out the rules. Because CrowdIt emphasizes peer reviews, its investors say it is well positioned to take advantage of this changing landscape.
“Jason and his partners had a unique value proposition to really focus on the equity part of the business. They had some pretty neat ideas about how they’d utilize the crowd for more than money – for networking, for expertise and advice,” Mace said.
While neither party disclosed terms of the agreement, Graf described Baron Venture as a business partner that exceeded CrowdIt’s desired financial support. The backing allowed CrowdIt to hire national public relations firm Catapult Public & Investor Relations in Boulder, Colo.
Mace, who said Baron has invested in five ventures since 2011, said CrowdIt’s interest in launching at the Plaster Center also was a key factor.
“With a company that is going to help startups be successful, where better for it to be located than within a business incubator?” Mace said.
Jeremy Bartley, co-founder of Nixa-based startup QR Pro, said his company has signed up to go live with CrowdIt with a goal to raise $100,000 for its digital business card dubbed One Card. Bartley said the company would likely seek funding in phases, hoping to generate $350,000 to push One Card to business professionals across the country.
He said QR Pro had considered other crowdfunding sites in recent months.
“They just get it,” Bartley said of Graf and partners, adding CrowdIt’s business networking and peer review concepts were important. “They see small startups and they want to help them succeed.”
CrowdIt began accepting project proposals on March 6, and the company plans to donate $10,000 to the top-grossing project 75 days after projects go live June 4.[[In-content Ad]]
