Fitness tracking wearables company Fitbit has decided to go public
According to Fortune, Fitbit will trade on the NYSE under the symbol FIT. The company says it plans to raise $100 million, but that number is likely to change.
Fitbit’s regulatory filing revealed some interesting things about the company – including some impressive numbers in terms of revenues and profit.
According to the filing, Fitbit hauled in over $745 million in revenues in 2014, up from $271 million the previous year. The company was profitable for the first time in 2014, generated nearly $132 million in net income. The previous year, that figure was a loss ($51.6 million).
Fitbit also revealed just how many devices it has sold.
In 2011, the company sold 200,000 devices. By 2012, that number was 1.3 million. Last year, Fitbit sold 10.9 million devices.
“Our primary goal is to help our users improve their health and fitness. We believe our platform assists users in changing their daily behavior, such as eating healthier foods or going for a run or walking more to reach a goal or win a challenge. We empower our users to set their own health and fitness goals and track their progress towards these goals. We also offer premium services on a subscription basis that provide personalized insights and virtual coaching through customized fitness plans and interactive video-based exercise experiences on mobile devices and computers. Our premium services feature in-depth data analysis and personalized reports, as well as benchmarking against peers,” said Fitbit.
“By offering a broad range of products spanning styles and affordable price points and cross-platform compatibility, we empower a wide range of individuals with different fitness routines and goals that are difficult for other competitors to address. Moreover, our singular focus on building a connected health and fitness platform, coupled with a leading market share, has led to our brand becoming synonymous with the connected health and fitness category. This singular focus on health and fitness has driven us to dedicate significant resources to developing proprietary sensors, algorithms, and software to ensure that our products, which are specifically oriented towards health and fitness, have accurate measurements, insightful analytics, compact sizes, durability, and long battery lives. We believe this singular focus allows us to compete favorably with companies that have introduced or have announced plans to introduce devices with broad-based functionalities, including health and fitness tracking capabilities, which are not necessarily optimized for health and fitness usage.”
According to police, Mendoza went out for margaritas after work and at approximately 1:45 am, the then 20-year-old drove onto the Sawgrass Expressway in Broward County – driving the wrong way. Soon after, she slammed head-on into another car, killing both people inside.
The sad story was highlighted by an ominous tweet sent less than three hours before the crash:
Mendoza pleaded guilty to two counts of DUI manslaughter earlier this year. She actually faced up to 30 years in jail, but was only handed 24. She will also serve six years probation and is never allowed behind the wheel for the rest of her life.
According to NBC Miami, Mendoza begged for forgiveness during her sentencing.
“No matter how much time passes they will never leave my heart. I think about them everyday and I regret my choices everyday,” she said. “I don’t remember deciding to drive that night so I can’t even tell you what was going through my mind when I made that decision. I have no excuses for anything I’ve done, I just ask for forgiveness,” she said while reading a prepared letter.
The families of the two she killed were unforgiving, apparently. They asked for the maximum sentence, saying she ruined their lives forever.
A lot of entrepreneurs in todays landscape must decide whether or not to go the crowdfunding route. If you ask multi-billionaire Richard Branson, you’re probably best off at least considering it.
Branson has been an investor in popular crowdfunding platform Indiegogo, and in the UK, his Virgin StartUp has partnered with Crowdfunder to help entrepreneurs raise money for their projects.
Branson participated in a panel discussing the topic in Chicago, which you can view below if you have an hour to kill.
He also wrote a blog post about how crowdfunding “could change the world”.
“The benefits of crowdfunding go way beyond the money,” he writes. “It brings market validation, access to new investors, promotion, community exposure, and real-time feedback. As well as the funds to start your business, it provides real connection with people who care about your business.”
“There are lots of wonderful ideas that are now getting the exposure they need to secure bigger investments, which is tremendous for the new generation of entrepreneurs,” Branson says in the post. “Like most things in life, crowdfunding success is much more related to how willing you are to pour yourself into the project with your heart and soul. You’ve got to have a great product, and then you’ve got to stand out from the crowd.”
You don’t have to look very hard to find champions of crowdfunding, but there are plenty of naysayers as well. It’s also not that simple. There are reasons why crowdfunding might work well for one business and not for another.
According to Biz2Credit CEO, writing for Fox Business, reasons to avoid crowdfunding include: it works best for projects that require small amounts of capital; lack of prestige; negative impact on future financing options; limited value of shares sold to investors; speed; and potential lawsuits.
“Kickstarter isn’t kickstarting businesses so much as it’s kickstarting relationships based on debt,” wrote David Banks at The Society Pages.
“Statistical analysis by Professor Mollick of Wharton uncovered that 75% of all funded projects on Kickstarter shipped late,” wrote Version One founding partner and Andreessen Horowitz board partner Boris Wertz last year. “When consumers start to look at a crowdfunding site as the equivalent of an online store where they can buy new toys, there will be trouble (hence the Kickstarter blog post: “Kickstarter is not a store”). Delays in production/delivery are usually expected among investors, but even a few weeks delay can frustrate and anger this new class of ‘investor customers’ who are expecting the same smooth process as when they order something from Amazon. Their frustration ripples throughout the web, souring the entire industry.”
A recent article from Shelly Banjo at Quartz says that while “once idealistic,’ Crowdfunding is “now an unholy hybrid of retail, investment, and risk.” Either way, it’s only growing more and more rapidly. Banjo shares this chart tracking its growth over the past few years:
The Wall Street Journal appears to not only condone crowdfunding for small businesses, but encourages them to “go back for seconds”. It looks at data from Kickstarter showing that those that have already had a successfully funded project have nearly double the chance of success of reaching their next funding goal.
Despite all the media coverage of crowdfunded projects and crowdfunding in general, small businesses have still been slow to embrace it, according to Forbes, which says it makes up just a “tiny fraction” of business loans.
Nastia Liukin, who has become the darling of season 20 of Dancing With the Stars, is relying on partner Derek Hough to help her with one flaw in her dancing.
Nastia Liukin is at the golf of the leaderboard and received the first nine of the season with Hough; however, while she has no trouble with the dance moves, she is struggling with showing emotion in her dancing.
During a recent interview with Chicago Now, the former Olympic gymnast shared how Derek Hough helped her dig deep to discover a new side of herself that has translated into a more emotional interpretation of the music to which she dances.
“Derek has really brought me out of my shell and I’m grateful for that,” Liukin said. “He’s an amazing partner and I’m so lucky to be partnered with him. It wouldn’t have worked if it wasn’t him.”
According to Nastia Liukin, Derek Hough wants her to forget her gymnast training that relies primarily on perfecting body movements and instead wants her to feel the music. He also wants her to forget about the competition and work on connecting with her audience.
“I’m not one to let go and just start dancing, so it’s been interesting. I was very stoic and serious when I competed. Derek is telling me to relax and have fun and I’m all, ‘Oh yeah, right.’ It’s a chance to show different side of me, one that I haven’t really seen much of myself,” she said.
Case in point is Rumor Willis, who found out how important her fans are to the competition. After commenting that she and her partner didn’t really have any competition on the season, she experienced a backlash from fans, thereby hurting her scores.
Derek Hough said he was very proud of Liukin’s second Dancing with the Stars performance, even though they didn’t have much time to practice.
“It was a pretty hectic week last week and it’s only going to get crazier, so to come out and kill it like she did last night was so awesome and encouraging. I was nervous because I hadn’t seen her the whole weekend until Monday morning,” he said.
Deadpool creator Rob Liefeld reposted Morena Baccarin’s tweet to his Instagram, noting the coordinating appearance of Deadpool and Copycat in the same comic, The New Mutants #98.
T.J. Miller will play Weasel, who is Deadpool’s sidekick.
Weasel provides Deadpool with weapons and vital information.
Morena Baccarin and T.J. Miller’s addition to the cast might give some hints as to what the film will be about, exactly. The film will exist in the same universe as the X-Men.
With Ryan Reynolds starring as Deadpool, Morena Baccarin has a lot to live up to, but she is quite talented.
Eminem’s daughter Hailie Jade Scott Mathers is 19 years old now. It seems like just yesterday we were watching Eminem and Kim duke it out in the pages of the tabloid press, and watching Hailie along for that ride.
The image most still hold of Eminem’s daughter is a lot like the image we have of Kurt Cobain and Courtney Love’s daughter Francis Bean: a little girl in her daddy’s arms or on her mommy’s hip, caught in the camera eye.
But Hailie Mathers has graduated from high school, was homecoming queen at her high school, and has over 16,000 followers on Twitter. Her following is strong enough that she has trouble with fraud account on Twitter and Instagram, luring people in with fake tweets and pics.
Back in 2011, Eminem told Rolling Stone that being there for his kids was incredibly important to him.
“[Being a father means] not missing things. If there’s anything important going on, regardless of what it is, I’m there. Helping them with homework when you can.”
Eminem’s daughter has appeared in lyrics to his songs more than once. Most famously, he did an entire song dedicated to her that he called “Hailie’s Song”. Within the song, he actually uses Hailie’s own laughter. The lyrics talk about how he has had so much difficulty being with Kim, and would love to turn back the clock and never have been with ehr, except for the fact that he now has his daughter Hailie.
I got my baby, baby the only lady that I adore, Hailie.
But when I see my baby
Suddenly I’m not crazy
It all makes sense when I look into her eyes
Back when Ja Rule insulted Eminem’s daughter in a song of his own, Hailie’s daddy struck back with a line from his song “Toy Soldiers”
There's a certain line you just don't cross and he crossed it. I heard him say Hailie's name on a song and I just lost it… – Eminem
“I’d like a dumb venti mocha latte. And throw in one of those ‘Dumb Jazz Standards’ CDs. And some dumb mints, for my dumb coffee breath. ”
So go the orders at a new coffee shop in Los Feliz, Calif.: Dumb Starbucks. The store opened Friday to great excitement, including a dumb line that took customers over an hour get through before the dumb store ran out of dumb supplies and had to close up.
Here’s what you need to know: The store looks exactly like any other Starbucks you’ve ever seen, only all of the branding, including the corporate logo, has been modified to include the word “dumb” at the beginning (menu items such as “Dumb Iced Coffee,” etc.). Where did it come from? Why is it here? So far, nobody knows, but speculation as to whether it’s an artistic statement or a marketing ploy has run rampant.
“I hope it’s an art thing vs. a business thing,” Jeffrey Eyster, 43, said, adding that he’d like to see “dumb” versions of similar chains like McDonald’s and Cheesecake Factory. Eyester, who had been waiting in line over an hour and still hadn’t made it near the front door was loathed to add, “They’re definitely not serving at Starbucks pace.”
Inside, two baristas were doing their best to tend to curious customers, but inquiries went largely unanswered. Instead, they referred questions to an FAQ pamphlet that claimed that the store was a fully functioning business but had to pretend to be an artistic statement so as to use Starbucks’ trademarks legally under the fair use doctrine.
It’s a legally dubious position, to be sure, and Starbucks’ attorneys are on the case. Megan Adams, a spokesperson for the company, said that they were aware of the situation and were “looking into it.”
There’s certainly one thing that’s not dumb about the store: the prices. On opening day, all the coffee was free.
Google announced a new partnership with UP Global, which will see the organization expanded to twice as many cities, going from 500 to 1,000. As part of this, Startup Weekend will be expanded, and is now powered by Google For Entrepreneurs.
Google is also partnering with Startup Digest and NEXT to put training and event resources in front of entrepreneurs through UP Global.
“Startups and entrepreneurs lead the way in creating innovative products that improve lives and drive significant economic and social impact,” said Mary Grove, Director of Google for Entrepreneurs. “A robust community of entrepreneurs—paired with resources, mentorship and technology—can thrive. That’s why one year ago we launched Google for Entrepreneurs, which today supports more than 70 organizations that are champions for entrepreneurship in more than 115 countries around the world. ”
“We are on a mission to make the world a more innovative and prosperous place, one community at a time,” says UP Global. “We believe that entrepreneurs are critical to driving a strong global economy and a better world. We do our part by supporting the grassroots leaders who are at the core of every strong entrepreneurial community.”
“Every leader in the UP community understands the transformative nature of entrepreneurship and is committed to empowering others around them,” the organization says. “These individuals catalyze progress, connect entrepreneurs and supporters, drive innovation, and provide tools for their communities.”
You can see what’s going on with Startup Weekend here. This week, there are events happening in Bend, Oregon, Athens, Ohio, Hartford-Ottawa, Connecticut, Bozeman, Montana, Roma, Italy, Pittsburgh, Pennsylvania, and Florianopolis, Brazil.
Google announced the launch of Google For Entrepreneurs, an “umbrella” for its various programs that cater to startups and entrepreneurs.
This includes: Campus London, Google for Entrepreneurs Week, Women 2.0, Startup Weekend, Women Entrepreneurs on the Web, Google Sudo, 1871, Start with Google, NewME Accelerator, Global K-Startup, Google for Entrepreneurs in Israel, Eleven, Jagriti Yatra, Umbono, Le Camping, City of Minneapolis STEP-UP Summer Jobs Program, Startup America Partnership, Portland Incubator Experiment, P@SHA Fund for Social Innovation, AFCECO, Google For Entrepreneurs Day San Diego, Google For Entrepreneurs Day Nashville, Grunder-Garage, Women’s Initiative Fellowship Program, Google For Entrepreneurs @ Google I/O, Arab Developer Network Initiative, Idea Village, iHub and Accelerate Your business. More on all of these can be found here.
Google says the focus is on partnerships with strong organizations that serve entrepreneurs in local communities, Google-led programs to bring its teams and tools directly to entrepreneurs, and placing relevant Google tools in the hands of startups as they’re getting off the ground and ready to scale.
Le Camping actually takes place in what used to be the French Stock Exchange building. Every six months, 12 promising new startups are chosen, then they are educated by over 60 business savvy experts who are focused on making the startups a success.
We’ve already seen great success from the program. Out of the 24 teams from first two seasons, 40 percent of the startups have raised funds, 60 percent have paying clients and all of the startups belong to a strong and reliable community. The program does not take equity in the startups or charge them to take part; all that’s required is vision, passion and the desire to address a global audience.
This is just one of our efforts to support entrepreneurs in France. Last year we also launched Startup Cafe, an online platform which provides access to educational video content from several business schools designed for entrepreneurs, tools to help start a business and, with the help of the Agency for the Creation of Entrepreneurs, a map of public organizations that can help entrepreneurs.
We believe that the Internet and entrepreneurship are key drivers of economic development. A study from the European Commission highlighted that small enterprises are the driver for growth and employment: they generate nearly 70 percent of jobs in Europe and 60 percent of economic value added. McKinsey’s “Impact of Internet on the French economy” reported that when French SMEs use more web technologies, their growth is faster, their operating revenues are higher and their profitability is stronger.
This is only the third season of Le Camping, but the program has been enormously successful. Essentially, there’s still six more months of the current season and the startups have a long way to go. The following video shows us a little more about what goes on during Le Camping and how it influences the participants.
Critical aspects he covers include developing an elevator speech (a concise overview of the problem and your solution), a thirty minute product/service overview, and a one hour pitch, typically reserved for investors.
He directly addresses the components of these pitches, and what ingredients to include in them. Dodge also talks about body language and checking for consensus/understanding during a pitch. He helps us comprehend the purpose for refining these speeches and how to assess whether you’re addressing the right people.
If you’re a member of a startup of just someone seeking funding for a new project, Dodge gives valuable advice that may just land you the investors you’ve been searching for. It’s a short video, only about five minutes long. It’s worth reviewing, even if you believe you’re already prepared.
During 2011 there were 6.5 million new businesses created. That works out to about 543,000 per month. That’s an awful lot of new businesses. So why are there so many? One reason actually has to do the downturn in the economy. With many people getting let go from their positions in the corporate world, starting their own business can seem like an appealing idea. Still other are looking for more freedom or to recognize a vision they have for the future.
Whatever the reason, entrepreneurship seems to really be taking off in America. This next inforgraphic from Docstoc.com provides us with some really interesting facts about what areas these businesses are catering to and where they are happening. It looks like there’s a good majority in renewable energy and internet-based technology, but there’s also opportunities in law enforcement and environmental.
The hot spots seems to be in Alaska, Arizona, Colorado, Texas, and of course, California. The worst places are Hawaii, Indiana, Illinois, Pennsylvania, and West Virginia. Now that doesn’t mean that if you live in these areas that you have a worse or better chance of making a business work, it just reflects the trends as they fall right now. Take a look at what Docstoc came up with:
Google’s Official Blog reports that Google for Entrepreneurs headed down to Nashville, TN on April 19th to present a whole day of workshops concerning Google+ tips, how to promote content with YouTube, and how to utilize AdWords and Google analytics tools for business.
Eight enterprising Googlers led discussions concerning tactics for getting a business on the global map, and roughly 430 attendees were on hand at the sold-out event, including Populr.me, a tech start-up developing a micropublishing app in HTML5, and ArtistGrowth, which is creating a mobile platform for musicians to organize and monetize their music and merchandise. The Creator’s Freedom Project conducted a forum of local artists pointing out how musicians can scratch out a living with the help of technology. The summit closed with Google reps explaining how “music and tech can work together to make the Internet awesome.”
As a side note, in my personal opinion, the latest tech that has the most possible relevancy for unsigned, touring musicians are devices like Square’s Card Reader system, and PayPal’s Here. One can promote their band online all they’d like, but people stopped paying for music about a decade ago. And typically, customers are only intoxicated enough to actually buy a band’s t-shirt or headband in a club setting, making an online storefront secondary to having a credit card reading device on-hand during a live gig. And, the concept of this is not real money that sometimes goes with credit cards might only enhance spur-of-the-moment sales to listeners in a concert setting. Everything about the system is ideal – even band bar tabs could be better handled, as all of the money taken at the door and via merchandise could be applied to one bill, and paid for with one card, instead of wads of crumbled ones and fives. Every band should look into the card reader systems – the concept of ‘swipe card/hand over t-shirt’ is likely more relevant than a sort of global monetization campaign, in the live music arena.
Bridgette Sexton, Global Entrepreneurship Manager at Google, went on to thank – “all our partners Flo {thinkery}, Entrepreneur Center, Nashville Area Chamber of Commerce, Nashville Technology Council and Tennessee Film, Entertainment & Music Commission, as well as Karl Dean, the Mayor of Nashville and Beth Harwell, Speaker of the House (Tenn.) for making this event truly memorable.”
Not too surprisingly, consumers want the way they spend their money to matter to others as much as it matters to them. Over 80% of American consumers want to buy from cause-related brands. In other words, they want the profits to go for more than just lining the stockholder’s pockets.
Addressing this new demand is an increasing number of small startups and entrepreneurs who take social issues seriously. They’re using social media to engage us and reach more consumers like never before. This next infographic from Roozt.Com gives us some incredible facts about social entrepreneurship and how they’re impacting the American economy.
Many of these social entrepreneurs are challenging what conventional business has established in the past and achieving great results. Social media is changing the way we interact with brands and also changing what we expect from those brands. Take a look at this graphic and see for yourself the changing landscape of American business.
Next week starts the fourth annual New Orleans Entrepreneurship Week (NOEW), which provides grants to educational entrepreneurs and hosts workshops for various self-starters. The group is led by Google New Orleans Outreach, which made huge strides in New Orleans in 2005 after the devastation of Hurricane Katrina. Using many of Google’s technologies, including Google Earth, volunteers were able to better aid the survivors during rescue efforts. In 2010, Google provided a surge of economic growth for Louisiana businesses, website publishers and nonprofit agencies to the tune of $102 million.
According to the Google blog, this Saturday, March 10, the group will be working with Make It Right–Brad Pitt’s foundation–to rally supporters around the globe during the charity event. Pitt has been a huge supporter of New Orleans since Katrina and has built hundreds of green, sustainable homes with his foundation. At 8 p.m. that evening, the Make It Right Google+ Page will host a live hangout with Brad Pitt and will include visits from special guests Ellen DeGeneres, Randy Jackson and Aziz Ansari. Afterwards, live updates from the event will be posted on the Google+ page along with photos and videos, and fans can ask celebrity guests questions.
Says Google New Orleans Outreach lead Tara Canobbio, “Our sponsorship of NOEW 2012 is one piece of our ongoing work supporting entrepreneurship in New Orleans. Other support includes bringing a major partner, Startup Weekend, to NOLA as well as increasing Accelerate with Google in the region. We look forward to contributing to the entrepreneurship ecosystem to provide real economic opportunities for the New Orleans community, its people and its businesses.”
Google can now add a launching pad for female entrepreneurs to their long list of accomplishments. As reported today on their blog, they recently began a program called Women Entrepreneurs On The Web, or WEOW. The program was created specifically to help women in India find a voice and teaches their students how to use web-based technologies and apply them to their businesses.
The program is divided into five groups of study, or “circles”, which were created with different levels of web knowledge in mind:
Building an online presence: creating a website, a YouTube channel, and a business page on a social network like Google+
Collaborating effectively: tools like Gmail, Calendar and Docs
Connecting with customers: hosting Google+ Hangouts, creating and distributing targeted offers and discounts
Promoting organization: online product demos, creating viral videos on YouTube, advertising through AdWords and AdSense
Tracking and optimizing your online presence: Google Analytics, Google Alerts, ripples on Google+, the +1 button, webmaster tools
More than 300 women have signed up for WEOW to date, and Google hopes to up that number exponentially in the near future as word of mouth spreads.
As part of the launch event, Yolanda Mangolini–head of diversity and inclusion at Google Hyderabad–spent a day with 30 female entrepreneurs talking about the program and what it means for them. Below is a video from that meet-and-greet.
Imagine you have an idea you want to get off the ground. Maybe it’s a children’s book you want to write and need to pay for illustration, layout or cover design. Maybe it’s an animated short film that’s burning a hole in your head. You could max out your credit cards and put all your chips on you. Or, you could ask for help from people who want to be a part of what you are doing.
“Crowdfunding” – sometimes written as “crowd funding” – is the term that describes the pooling of money and other resources by a group of people to accomplish a goal or support an effort. In a very general sense, lots of things could fit into this category, including buying stock in a company. But, there are some important legal distinctions that have to be made that differentiate crowdfunding from offering shares in a company. We’ll get to those in a bit. First let’s take a look at a couple of examples of crowdfunding and see how the Internet has changed the entire concept.
Recently, we told you about New Perspectives Café, a startup company that will launch 30 stores on the same day, all via crowdfunded contributions by “members”.
New Perspectives Cafe is offering people a chance to take part in a never before seen event. We are opening thirty stores on the same day in a simultaneous opening event. Here is the thing, these are not regular restuarants. These restaurant’s menus, events, and just about every decision you could care about, are controlled by you. When you become a member, not only do you get a ton of cool prizes, discounts, and lasting recognition and memories through our nostalgia wall, but, you also get to vote on how our store is ran. Beyond a very basic menu, you get to decide what exotic foods make and stay on the menu. You get to decide what theme nights and events occur. And, you get to decide what fundraisers we run and support. Come see what we are about. Purchase a membership and enjoy the fun and rewards we have to offer. The entry period for membership purchases begins on February 24th, 2012 and ends March 16th 2012. Store openings will be a date and time synchronized event occurring on April the 16th at 8pm Eastern time, 7pm Central time, 6pm Mountain time, and 5pm Pacific time.
Note what kinds of rewards there are for participating in the launch of these 30 cafés. Input on the extended menu, discounts, events, recognition on the nostalgia wall, etc. No monetary return on investment. That’s important, in a very legally-binding sense. Again, more on that in a bit. Let’s look at an example that goes back before a website like New Perspectives has was even possible. Set the Wayback Machine for 1997…
Marillion is a British rock band that has recorded sixteen albums since 1979, with two different lead singers. Their best-known song is “Kayleigh”, which peaked at number two in the UK and cracked the Top 100 in the U.S. in 1985. The song was so popular at the time that there was a huge spike in the number of girls who were given the name in the UK.
Although Marillion is still a well-known band in the UK, and the song “Kayleigh” was even used in the soundtrack for the video game Grand Theft Auto IV, Marillion’s presence in the U.S. has been diminished for a while. But, there is still a very loyal fan base, known as “Freaks“, in the U.S. In 1997, in a pre-Web example of crowdfunding, those fans financed a U.S. tour for the band.
U.S. fan Ryan Spaight explains how it happened:
Back in 1997, the band were mounting a tour for their first “independent” album after their contract with EMI ran out. It is very expensive for a band from the UK to tour America, between shipping people and equipment around and the normal financial hardships of touring. To do so without the support of a major label is even more difficult. To complicate matters, the band had never been as popular here as in Europe, where they were a top act for many years and still were fairly well-known at this point.
So the band announced that they would not be touring the US. US fans weren’t at all happy with this, obviously, and after some time a few fans on the “Freaks” e-mail list (which of course, along with Usenet, was the primary method for internet fan interaction back at that time) hit upon the idea of using the list to raise money to make a US tour financially feasible.
Tthe band was uncomfortable with it at the start. But once it became clear it wasn’t going to fizzle out, they accepted it and promised that if the effort was successful a CD recorded at one of the US shows would be sent to everyone who contributed $20 or more to the fund. Even then, the fund was administered by fans, not by the band.
The “Tour Fund” met and exceeded its goal and the US tour went forward. There was a special afternoon before the show in Pittsburgh for fund donors where the band played a mini-set, answered questions, signed stuff, etc.
While this would be the last fan-funded tour that Marillion would need to do, they have continued to use that crowdfunding model for future album releases. In the simplest sense, they pre-sold albums, but with a special twist. For fans that pre-order, and thus help fund the recording of, the album, the band issues a deluxe edition of the disc that includes all the names of those fans.
Natalie Cummins, another U.S. fan talks about funding one of the band’s albums:
In the case of Anoraknophobia, I got my name printed in the CD booklet. It’s tiny (there are LOTS of names), but it’s there! I felt good about contributing and then getting updates on the recording process. Then, when I got the disc, it really was a bit thrilling to see my name in there. Plus, you realize from looking at the sheer volume of names that you’re not the only one who really likes this band, and that’s a good feeling, too.
Ryan Spaight thinks that this kind of involvement of the fans with the band is based on trust, and has advantages to even established bands.
Most fans seem happy to do it if there has been a level of trust built up over the years — the fans trust that the band will follow through and produce a good album. Marillion have shown they take the responsibility seriously. They were also able to get the albums into stores via traditional labels (even EMI in some instances) since the cost to the label was minimal. But, the advantages of funding the recording this way are not having to go into debt to a label to fund the recording process, having total creative freedom, and owning the recordings at the end of the day.
This kind of funding could be a huge boon for bands that audiences would enjoy, or even have an established fan base, but who don’t fit into the current notion of what labels are looking for. As Natalie Cummins puts it:
It’s a solid funding model that’s been used by various artists of all persuasions, and I do think it helps get bands out there who might not be likely to get backing from a traditional label. It seems that the music industry has been slowly decentralizing for over a decade now, and these sorts of projects are vital to funding.
Again, notice that no fan who funded the 1997 tour or who has pre-funded the recording of albums is entitled to a “share” of profits. That isn’t because no one thought of it. It’s because it’s illegal.
All publicly-offered investments have to be filed with the appropriate regulatory agencies. In the U.S. that would be the Securities and Exchange Commission. The general guideline for whether an arrangement is considered a security that must be registered comes down to four points known as the Hoey Test. If there is (1) an exchange of money (2) with an expectation of profits arising (3) from a common enterprise (4) which depends solely on the efforts of a promoter or third party, then the resulting contract is a security. Most crowdfunding efforts that bring monetary returns to the investors would be subject to that regulation. Requiring all the regulation-watching, registrations, filing, and such puts offering remuneration out of reach for many people who have a small project they are trying to fund.
But, maybe that can change.
Back in November, 2011, the U.S. House of Representatives passed the Entrepreneur Access to Capital Act [HR 2930 – pdf]. The provisions of this bill would lift much of the stifling regulation currently in place for concerns that do not raise over $1 million, limit individual investments to $10,000, and demonstrate that investors know the risks they are taking.
Trouble is, that bill is stuck in the Senate. Forbes magazine did an excellent breakdown on the particulars of the arguments for and against the current form of the bill. For example, the Senate version, called the Democratizing Access to Capital Act, [S.1791 – pdf] limits contributions to $1,000 per person. But, many people, including the President, do think that this kind of loosening of regulations on small businesses and individuals could stimulate job growth and investment at at time that it is sorely needed. President Obama has promised to sign the bill if it can get to his desk.
One of the better-known ways that small projects bring their funding needs to the “crowd” is through websites like Kickstarter. The site is particularly focused on creative projects like books, films, albums, etc. They do impose certain house rules on those who attempt to fund a project through their site. For example the project must fully meet its funding goal before any money changes hands.
Another such site is Rockethub, which supports “entrepreneurs, actors, artists, composers, dancers, designers, directors, filmmakers, inventors, musicians, painters, philanthropists, poets, politicians, programmers, singers, songwriters, teachers, writers, and more.”
According to Rockethub’s rules, in order to be legal, offering the following as remuneration is not allowed:
* Equity (aka ownership)
* Revenue share
* Investment opportunities
* Entrance into lotteries, raffles, or sweepstakes.
If the Senate sees fit to pass the bill in either form, it could be a game-changer for artists, entrepreneurs, app developers and others who don’t need a whole lot, just enough to get their project off the ground, and are willing to share the spoils with those who help them get there.
