Feature Friday: Crowdfunding Filters
Our portfolio company CircleUp, a crowdfunding market for equity investments in consumer products companies, launched something this week that I think is a something we will see more and more in the crowdfunding world going forward.
They have added filters to the left side of their company discovery page. It looks like this:
I decided to filter for food companies in New York that have more than $500k of annual revenue. That got me three results:
Whether it is equity for consumer products (CircleUp), equity for tech startups (AngelList), consumer lending (LendingClub), small business lending (Funding Circle), philanthropy (CrowdRise), or creative projects (Kickstarter), all of these crowdfunding marketplaces have a tremendous amount of things to fund. Drilling down to find exactly what you want to fund is becoming harder and harder. Discovery tools are becoming critical to the user experience.
So I think CircleUp is showing one good way (another is social discovery which Kickstarter does a good job with) to help funders find the things they want to back. My bet is we will see more of these kinds of tools cropping in up in the marketplaces in the coming year(s).
It is true that ultimately everyone would go for a some sort of search tool (similar tool) when any list gets bigger.But don’t you think it is too too early for CircleUp to bring it now?There are hardly 12-13 companies which are checked and another 10 which are funded and a remaining of 30 which are yet to be checked.We are talking about a Dozen companies to review. If I were to bet my money I will sincerely go through all the Dozen … I think my brain can do that simple search 🙂
But the other great advantage of search is the user tells you what he wants. ie CircleUp can now see “people really want to fund companies that do X and are based in Y” Then they know where to target their no doubt limited resources.
In this particular context, It’s never too early.
Hi Kasi – our goal with the feature, and a lot of our work on the platform, is to help make the fundraising process more efficient for both sides. Currently we have 60 companies (and 9 funds) on the platform. For investors, spending time on each of these opportunities equally would take a lot of time – and many already have preconceived notions of the type of opportunity they are interested in.We already see investors using these filters to help narrow down the opportunities before they dig in – whether they care about location, industry, growth, etc. – and as a result, using their time on platform much more efficiently. With the browse page, there is still opportunity for serendipity, but so far the adoption for the feature has been strong, especially among our power users. As you rightly point out, we do expect it to become more important as we continue to increase the number of opportunities available on the platform.
I understand the usefulness of the work and appreciate it…but felt it was too early that is all.Good luck and envy that something like CircleUp does not exist in India. I sincerely wish the number 63 becomes 6300 soon and the tool becomes a MUST.
How about Email Alerts? That would be a good thing too.
Indeed, that would be great when there’s volume and liquidity and you’re looking to get into a great investment before others.
Why not now. You just set your alerts based on your interest. The above search filter that Fred mentioned could have a “Set Alert for this Search” button. That’s it. Same as Google Alerts that’s integrated with a News Search.
Agreed. Was just thinking in terms of priorities from a development perspective. So, ideally, yes.
Developing something that gets more engagement and gets more people to keep in contact (and potentially invest) is always worth the effort. The suggestion falls under “sales and marketing improvement district” not under “better trash can design improvement district”.I might visit a site like this and totally forget about it. But if there was a way to be notified that there is now a new “comedy in a retail box” product to invest in that might get me to come back for another look.
Without taxonomy alerts are just a dial tone.The issue with taxonomy under an umbrella like ‘retail’ is that the umbrella itself is not helpful. All it does is tell you how it is sold, not what it is.You want an alert when it is pickles? Tshirts? Superfood treats?
Well, I was just thinking initially just an email alert based on the Filter example that Fred gave. Of course, that type of alerting can be refined later, but that’s a function of the search capabilities too.
Understand.My thinking is more on whether the verticalization of seed crowd funding for certified investors matters at all, unless it is a tangible category.
Agree. Alerts would be a good idea.Problem with sites you don’t visit every day is that they are out of site out of mind.Even ebay tells me “the item you were following has been re-listed” and amazon says “other people bought” by way of email. As long as it’s opt out (and obviously it would be).
A good point William – thanks for the suggestion. The filters, and our current alerts, are designed to make it easier to find the companies each investor is interested in – the suggestion for search based alerts fits that well
Hi Rory. Good to meet you here. I like the Follow feature. And hope to see more Canadian deals 🙂 [I saw only one from Calgary]
Nice to meet you as well – we are working on it 🙂
seems like a no-brainer to me. how else would it be?
Index cards and yellow highlighter.
More interesting to me is whether verticalization of segment is s a sort in itself?Are tech and consumer really segments? Does Agfunder and CU bump into each other? If these are not sorts, search within them is somewhat of a bandaid. Or maybe more critical.For some not obvious reason this becomes more germane in the certified investor models.BTW–considering using CU for a project and my interactions with them have been good. Especially like that they work with you to bring your own investor pool to the raise without a charge.
Is it possible for a non-accredited investor to become a tiny tiny LP of another investor?I find AngelList’s Syndicates and CircleUp’s Circle great, and would be keen to get some exposure to startup funding, as part of an overall investment strategy. I can’t, unfortunately, because I have to be an accredited investor to do so (which I likely won’t be until a few more years).So, happy to learn about why this barrier to entry exists, if there are limitations that prevent from removing it, and if plans to remove it exist. 🙂 I would love to be able to invest in startups circles/syndicates as seamlessly as I can invest in the stock market.Thanks!
By IRS rules, you can’t. They want to protect people from hucksters, which turns out to limit individual liberty and opportunity. Only way for you to take a ride on a startup is work for one, start one, get equity and be successful.
I’m more curious to know:1. How do these companies verify an investor is accredited?2. What’s the penalty for saying you are when you’re not?Not trying to start a revolution. Just curious how hard it is for the enthusiastic and informed smaller investors to “hack” the system and start investing $1000 here and there to build their wealth.Call it a form of civil disobedience.
some platforms vet their investors-some require proof. Others rely on trust. you can probably “hack the system”. I haven’t ever invested online-I guess you could invest $1000, but my gut says you’d be lucky to see it again. This stuff is needle in a haystack as you know.
Needles, for sure. Whether online or offline, as you implied with “limit individual liberty and opportunity”, there should be an avenue for all investors to participate.I see this as similar to insider trading, in its unfairness, in that the trade is restricted to a subset of investors that would want to invest.
Hi Jim – we take a number of different steps to form a reasonable belief the investor is in fact accredited. Since September of last year, when a key provision of the Jobs Act came into play, many of the companies on the site choose to conduct a raise with general advertising (506c is technical term). That involves a ‘steps to verify process’ which general includes a document review by us to substantiate the view that the investor is in fact accredited. We built our own process here, as a registered broker dealer, and other platforms use different processes. Right now, until the final rules change with the Jobs Act, equity investments through sites like CircleUp are generally limited to accredited only – but that has the potential to change with the Jobs
They want to protect people from huckstersAnd it’s way easier to not look like a huckster today than it was 30 years ago. It’s trivial to put up a slick website and/or get good looking packaging at a fraction of the previous cost.There was a true cost prior to desktop publishing and the internet in looking professional. Hucksters had a much harder time. Only way for you to take a ride on a startup is work for one, start one, get equity and be successful.That’s the type of wording that is often couched “take a ride” around activities that are risky to make them appear fun and worth doing and not risky. Like all the cute words surrounding people who drink “throw one back” “got hammered” “a little tipsy” “baked”http://en.wiktionary.org/wi…I have a real problem with people thinking they can strike it rich by doing a startup. Really no different than the opportunity to make money in the entertainment business or “the arts”. The problem is those people who are living that dream are going to miss out on traditional world opportunities with a much greater chance of success.Since you’re an investor it’s not an issue for you since you are spreading your money out over many companies and only need a few successes. But it’s definitely a problem for those companies (in your portfolio) that don’t win.I’m not saying anything you are doing is wrong by the way. I’d do exactly the same thing if that were my business. And if I could make money selling alcohol I’d do that as well.
Along the lines of my other comment you can also consult this list labeled “Requests for Startups” by Y Combinator :http://www.ycombinator.com/…The span from living poorly in SF (or really any city) and eating the proverbial ramen noodles and becoming successful could be 8 to 10 years. It’s no big deal to wait and put your time in (and it’s one of my themes) but at least if you put 8 years into certain professions making little money you have a much better chance of actually making a living at some point. Not to mention that on this list are so many things that are pie in the sky it’s practically a joke.Good for YC of course what do they have to lose? Who of course could never be considered “huckster”, right? Anymore than law schools taking on students that they know won’t be able to actually find work would be labeled huckster.
Only rich people are allowed to get richer, don’t ya know? 😉
It exists exactly to prevent the parent commenter from getting into trouble thinking that this is a way to actually make money. At best it’s gambling. Not saying whatever the limits that currently exist are correct but there needs to be some control to prevent people from pissing away money that they have and might need to buy cigarettes and alcohol, right?And I think also that many people will invest for emotional reasons rather than rational business reasons. In other words your view may be clouded by your personal axe to grind about a product or service. (Not saying that there aren’t advantages in some cases to doing that but probably not for the average non business knowledgeable person.)For example you may be inclined to invest in a comedy club and totally ignore the foolishness of doing so. Investing in “what you know” isn’t always the path to success when gambling.
I’ve always been curious why the IRS chose to use assets and income to gauge whether someone is able to make intelligent decisions – maybe experience/education? I understand the protection argument, but it rings hollow to me, and feels condescending. The definition of the government limiting individual liberty by “knowing what’s best” for someone…”You can’t invest in that….but this dude born into a trust fund knows exactly what he’s doing and never makes decisions for emotional reasons”.BTW, signs point to the income/asset requirement for “accredited investor” status getting raised substantively.
I’ve always been curious why the IRS chose to use assets and income to gauge whether someone is able to make intelligent decisions – maybe experience/education?For one thing any other way doesn’t scale. Numbers and cutoffs make sense for simplicity the only question is whether the number is the correct number.After all what are you going to do write a test that people take? Good luck with that I’m sure most successful immigrants making tons of money would fail that test but know business quite well.The general idea isn’t that someone with so much money knows what they are doing the idea is that someone with those assets is less likely to gamble away all that money and not have any other money left.Now you could argue (and you should btw) “why then can someone without a pot to piss in invest in the stock market they could lose all their money there?”.The answer is the stock market is grandfathered. Many things that are grandfathered would never pass muster today.
There are countless ways for someone “without a pot to piss in” to lose every dime they have. Why bother regulating this one?
Just because it’s dangerous to cross the street or do bungy jumping doesn’t mean we have to allow more dangerous things.
Gambling isn’t a way to make money? Doh!
In the first screenshot I see that BobbySue’s Nuts is in the seed stage. Couldn’t have punned that better myself.All in all, search and filter are a big time saver and welcome feature.
great idea. filtering the firehose. now i need a good way to search for photos on my phone and on my computer.
What I do for such problems on my computer:(1) I have about 69,000 files, other than the files for the operating system, and a file with one line for each of these 69,000 files. I have a simple little program to get a fresh copy of this file. Indeed, the program will create such a file for any subtree in the hierarchical file system, and, I just counted (with an easy way) that I have 81 directories with such a file. In such a file, each line has time-date, size, and full tree name.So, at the end of the tree name is the extension which usually specifies file type and for an image file might have, say, JPG.I can edit this file in my favorite text editor and quickly search, sort, etc.So, for pictures, get all the file names with types JPG, PNG, BMP, etc. Within those sort by date and keep all names in some appropriate range of date. Next look within selected hierarchical file system directories.Sometimes that can work.(2) Generally when working, collect like data close together in some part of the hierarchical file system tree. E.g., I know just what directory has all my kitty cat pictures.(3) Each time save an image file, make a note of what is in the file and where got it. For an image file in directory x, I put a note in file x.DOC with a time-date stamp. Then I can have, say, Grep or Findstr look for relevant key words in all files of type .DOC. I know; I know; DOC is for Microsoft Word files, but I make so little use of Word that I prefer to use DOC for my ‘documentation’ file in each directory.Oh, you asked, how many directories, and, hence, DOC files do I have for my 69,000 files? Easy — 24,293. Oops, you are correct, some of those directories end in name “_files” from saving Web pages via Firefox, and those directories do not have DOC files. So, there are 8630 of those, so for the number of directories with DOC files subtract the 8630 from the 24,293.(4) I have one more file, FACTS.DAT, that seems to give me genius memory! The file has every little fact that I suspect will be useful and I want to be able to recall quickly. Each entry has a time-date stamp, a list of key words, and some text. Simple file and easy to use in my favorite text editor. Just now that file is 1,514,841 bytes long and has 2745 entries since 9/2/2005. So, if I have an image file that maybe I can’t find by the other means, then I can use this little file FACTS.DAT. I just checked: There are a few!Net, I really don’t have much trouble finding things on my computer. The main tools are the text editor, a scripting language, and a few macros and scripts.
Interesting I see that Clayton Christensen has invested in circle up (by way of Rose Park Advisors).
I was curious what the opportunity was for circle up (as a business) since it seems to be constrained by the quantity of high enough quality companies that would be able to qualify to raise money. It appears to be a niche of a niche since starting a consumer products company (that looks and quacks like a duck) is no trivial task. How many people can do that?I then thought “what is their cut” (thinking I would do some napkin calculations) but wasn’t able to find that info on the circle up site at all.All I found was this:There is no initial charge to apply to CircleUp. When approved to be listed on the site, a company pays $500 to US Bank to establish their escrow account. Additionally, CircleUp will generally assess a charge based on a percentage of the total amount you raise through the CircleUp platform once you have successfully raised at least your Investment Target amount. There is no fee, however, for investments that come from people with whom you have a pre-existing relationship, e.g. friends and family who invest through CircleUp. Any commission is intended to be generally consistent with what companies pay to investment bankers in the offline world for similar size fundraising rounds.So I’m wondering why that information isn’t out in the open is this negotiated differently in each case and depending on the circumstances? (Seems old school which is fine and perhaps a way to maximize value from each company being invested in..)Also do they make (or can they make) any money on services and/or goods that they are able to supply to companies (intros to professionals, supply kickbacks etc?)
Filter value seems related to number of visitors that arrive to “Browse” vs. those that clicked-through to a destination campaign. Would be curious what the breakdown is for CircleUp and others. Maybe a big difference between donation-based vs. equity-based crowdfunding?
Keywords search works just fine.
Check out angel.co/companies. Set filters, save to get alerts and download to csv.
I’ve yet to be asked.
All of them asked me to say I was accredited, and I don’t believe any asked for specific proof. One of the companies is now asking for itMakes sense actually. If the platform is required to verify that someone is actually accredited then they would take on the liability for not only doing it correctly but there would be a cost to do so (admin time).Seems the best way to “shoot first ask questions later” and collect more signups (a bigger number to brag about as well).
Would appear that he doesn’t know when/if. See his reply to me above.