A Q&A with CrowdIt co-founder and CEO Jason Graf. The Springfield, Missouri–based company was founded in 2012 and launched to the public in earlier this month.
SUB: Please describe CrowdIt and your value proposition.
Graf: CrowdIt is a crowdfunding platform that sees crowdfunding as more than just a funding event but an all-encompassing part of success for dreamers, offering options in funding, fully controlled by the crowd, and a totally interactive community to help foster success.
SUB: Who are your target markets and users?
Graf: We are targeting incubators, universities, colleges, entrepreneurs, creatives, and the disenfranchised for dreams, as well as industry and business professionals, venture capitalists, Angel investors and accredited investors to round out our community and lend guidance, mentoring, and collaboration to our projects and project developers.
SUB: Who do you consider to be your competition?
Graf: We know there is a lot of competition in this space right now and initially we will be fighting all the 800 pound gorillas for projects. But we feel that through the differentiators we are building into our site and the level of crowd interaction and ownership when it comes to direction and functionality of the site available to our users, that we will be able to steadily carve out a very respectable piece of the market share for ourselves.
SUB: What differentiates CrowdIt from the competition?
Graf: Great question. Unlike first generation crowdfunding portals, CrowdIt utilizes the full power of the crowd, achieving success goes beyond that of just capital. We do this by involving the crowd in three key ways giving them the power to shape our community at CrowdIt.
First, we offer the crowd flexibility in funding. We offer several different types of crowdfunding, such as donation based and reward and incentive based crowdfunding in which they can choose a full funding option where they must reach their goal to keep the money they raise, or they can choose a partial funded option where if they raise at least 30 percent of their goal and can show how the money would still help them get closer to achieving their dream they get to keep what they raise. We do this to help ensure greater success, as our research has shown that once a project reaches 30 percent they are almost 90 percent more likely to reach their goal. We will also offer equity as soon as the SEC and FINRA release the guidelines in accordance with the JOBS Act. We are also exploring further options in crowdfunding not yet utilized by other sites.
Second, we will be controlled by the crowd. We feel the crowd knows what they want when it comes to the functionality of the site and the projects that are featured. We will do this in several ways: through a peer review process in which users will be able to vote as to which projects make the site before they go live; the projects featured or highlighted day-to-day will be chosen via an algorithm that takes into account the activity of the project owners, level of funding activity and social interaction and sharing of the project itself. Users of the site will earn a ‘CrowdIt influencer score’ through activity and interaction on the site helping to identify true collaborators, mentors and influencers. And finally, the crowd will determine the future functionality and development of the site, which is of course a living breathing entity.
SUB: When was the company founded and what were the first steps you took in establishing it?
Graf: The company was originally founded in very early 2012. I would say the first steps we took in establishing it besides forming the corporation was research—hours and hours of research and exploring market differentiators. We knew we wanted to be in the space, it just took some time to develop and refine our ideas and approach.
SUB: What was the inspiration behind the idea for CrowdIt? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Graf: I have always been a dreamer, always had many ideas for startup ventures, or good ideas that always seemed to be thwarted by either a lack of know how or capital, or both. And many, many years ago I had an idea or a vision really of wanting to create a way to help people realize their dreams. With that said, when this all started we were all just enamored with the industry, the possibilities it held, the fight for improved legislation, and all the opportunities that eluded to. It was shortly after that we received funding that I had this ‘aha’ moment that I had created exactly what I had envisioned creating all those years ago. It was a great feeling because when it comes right down to it we want to help people achieve their dreams, in turn helping the economy creating jobs, feeding families and just improving the communities we live in.
SUB: How did you come up with the name? What is the story behind it?
Graf: It was really a collaborative effort, we were all just brainstorming name ideas and knew that it, as simple or as minute as it seems, was a vital part of our plan and branding. It had to be more than a name, more than a brand. It had to call people to action, it had to hold meaning. And for us that meaning had to be more than just in the acquisition of money, capital or funding. It had to be an action itself. Thus was born CrowdIt … don’t just dream it, CrowdIt. To us, that encompasses what we are trying to achieve and our closely held belief that success lies much deeper than that of just capital.
SUB: What have the most significant obstacles been so far to building the company?
Graf: Well it is still early so I hate to say, but I guess thus far those obstacles, like for any startup, have been education—educating our supporters and even vendors what crowdfunding is, and the potential behind it. Another one has been actually raising the capital and backing we needed to launch this dream of ours. Now our obstacle seems to just be coding, and coding fast enough, which I think is a problem any software company faces and really never goes away as our site is a living, breathing organism that will forever be changing. This is especially difficult for me to grapple with as I know virtually nothing about writing code or website development, and that is a new feeling for me when it comes to running a company. Luckily for us, we have a ninja for a partner and CTO.
SUB: You just launched and began accepting projects. Why was this a particularly good time to launch?
Graf: To be honest, I can’t say it was a good time to launch—no time like the present I guess. We were torn in that all too often perplexing quandary of the chicken or the egg. Do you launch a fully functional site with no projects, or do you acquire projects and then launch? We think we found a fairly nice balance in our approach and we are blessed that the response has been positive and is on track with our goals. People seem to enjoy the look and feel of the site so far, seem to be excited for what is to come, and we are taking in quality projects every day, and that has us excited.
SUB: Have you raised outside funding to this point?
Graf: Yes, we are backed by a local, privately funded venture capital firm, Baron VC.
SUB: How does the company generate revenue or plan to generate revenue?
Graf: We actually have multiple revenue streams planned, some of which won’t roll out for the first year or so. Primarily, we will earn revenues in the same way all the mainstream first-generation crowdfunding portals do—through a commission based on funding goal reached or not reached. We just will be offering a lot more value, a lot ‘richer’ experience all around for the same cost.
SUB: What are your goals for CrowdIt over the next year or so?
Graf: We would like to see CrowdIt hosting a robust and diverse community of ‘dreamers,’ ‘believers,’ and ‘suits’ all coming together to create a virtual incubator of extraordinary ideas, collaboration, new businesses, and jobs—a known resource for guidance, capital, and success. Our ultimate goal is for CrowdIt to be more than just a crowdfunding portal but also an action. Don’t just dream it, CrowdIt.
CrowdIt – www.crowdit.com