The June 25 meeting of the Jackson Inventors Network (JIN) kicked off in unusual fashion, with a Skype call with Cary Harwin, president and co-founder of FundaGeek, a crowd-sourcing site for inventor fund-raising. Harwin made a short presentation about crowdsourcing, what is and isn’t, as well fielded questions from the audience. Unlike venture capital, crowdsourcing is not like an investment that requires you to give up an interest in your product or service.
“Think of crowdsourcing like a pledge drive,” said Harwin. “In that context, inventors are providing a gift in return for support.”
Crowdfunding sites usually take a percentage of the money raised off the back end. In FundaGeek’s case, there are 2.9-3 percent fees to use PayPal (since the site doesn’t handle the money) and then a 5 percent fee to FundaGeek. Again, this amount is paid from the raised; there are no out-of-pocket costs for the inventor
“You can come to FundaGeek and other sites and build a project in the form of a presentation,” he said. “There’s no cost to create that. If you run your project and fail to raise the funds, there’s still no cost. You only incur a fee in crowdfunding if you are successful in funding in your project.
Terms for different for various crowdfunding sites, so Harwin recommends inventors do their homework when choosing them.
The next speaker was William Wilkie, from InventureX, with innovative ideas to provide support for inventors and creating local jobs. Based on the premise all inventors may not want to be entrepreneurs, InventureX seeks to liberate constructive ideas into local markets, providing jobs for the local economy.
Unlike venture capitalists, who are looking for lucrative return through the sale of a company, he described the InventureX company as one where small- to medium-size communities create viable economies around privately held niche headquarters selling products to national markets with an annual market between $10 and $100 million.
“The reason why I say up to $100 million is because, any bigger than that, and the big boys come in and try and take it away from you,” he said. “I happen to believe the future of Michigan doesn’t lie just around very large Fortune 500 companies, but really the myriad of small, privately held companies that are in the $10 to $100 million range. They have a commitment to their local communities and to their employees and they usually pay higher wages than normal.”
He said, one of the challenges in local communities is the chambers and EDCs are all about attracting companies, usually branch plants or regional headquarters. “The reality is, we have to do the hard work of creating companies or taking an existing company and helping them move up the food chain,” he said.
For those interested in seeing the full InventureX presentation, check out these video links.
This video includes:
1. 5 minute introduction/discussion on definition of venture capital
2. 15 minute discussion using slides to outline the difference between Inventure Equity and Venture Capital
Inventure Equity Q & A
1. Serial Inventors
2. Trust Relationships and Trade Secrets
Inventure Equity Topics
1. Value & Wealth
2. Entrepreneurs Today
3. Risk Management
4. Low & Medium Technology
Here are also some documents to download.
HDQ InventureX Mission
Inventure Equity v. Venture Capital Chart
Inventure Equity 1.0 PowerPoint
Inventure Equity 1.0 PDF