CROWDIT: Crowdfunding combined with an accelerator

By now, we’re all pretty familiar with the concept behind Crowdfunding websites. The sector is dominated by KickStarter, a company which has helped tens of thousands of start-ups to get their critical first rounds of funding. The concept works best for companies who have an exciting prototype product, and investors are willing to put in cash in order to have the first opportunity to own the product once its manufactured. Psychologically there’s more at play in terms of people’s motivations to invest, but essentially that’s the bare bones of it.

Then there are incubators or accelerators. Over recent years, these have been growing at a rapid rate. Increasingly large companies like Samsung are building their own accelerators, which is allowing them to tap into the rich human personnel potential which sits within many new start-ups.

Now CrowdIt have come along, and they believe they can change the space by introducing a combined offering, with aspects of Crowdfunding married against aspects of an accelerator.

The name of the game, is of course, making these embryonic companies into a success. Accelerators have already played their hand in the wild growth of a number of start-ups, with perhaps Airbnb being the most famous to date.

Jason Graf, the founder and CEO of CrowdIt has seen an opportunity to bring some of the benefits of Crowdfunding to this table though. Normally when it comes to Crowdfunding, you have two seats in the house. You’re either a project creator, in which case you’re speaking funding or you are a project contributor, or somebody who is willing to put money into an organisation – essentially an investor. Graf’s idea is to add a third seat, in what he is calling the ‘suite’.

People contributing within the suite will essentially be mentors, at least at first. The vision is a portal full of high quality ‘been there, done that’ style mentors, who will guide, inspire, and lend expertise and opinion to the companies within the CrowdIt scheme.

Over time Crowdit see a scenario emerging where these ‘suite’ folks will be able to get more actively involved – potentially in a more formalised way, such as investing or sitting on an advisory board for the organisations that they work closest with. Seemingly, the suite will also provide opportunities for more rudimentary specialists to give a little in order to potentially get a bigger contract later.

Therefore, in the online space, a SEO specialist may help an organisation out quite informally during the incubator phase, prior to formalising the relationship later. Similar scenarios could be played out with a whole host of professions, although the economy would seem to work and rely heavily on trust.

Ultimately though, thriving businesses should be good for all involved. CrowdIt believe that the majority of companies fail, not because they are under-funded but because their founding teams lack the experience needed t really make the company work. Right or wrong, this is clearly a factor in the start-up space, and solutions that can fix that are well worthy of deeper investigation.

CrowdIt foresee the platform emerging to offer its own virtual currency. The currency, pipelined to be called ‘funz’ can then be used as a method of payment towards the 100 suites that are currently in operation within CrowdIt.

Of interest to entrepreneurs may be the fact that they don’t need to hit their stated fund raising goal in order to get the money. This is different to Kickstarter, and as such raising at least some of your required funds via CrowdIt should, in theory at least, be easier then on rival services. However, with the average entrepreneur ask currently being over $50,000 and the average investor pledge being a measly $45, its clear that fundraising on the platform is currently a chore.

That said, CrowdIt are growing, and it seems that accelerators in their different and unique guises will play a significant role in the future of fundraising. With their Baron VC backing and entrepreneurial CEO, its likely that CrowdIt will leave their mark.