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Crowd Supply innovates, legitimizes crowdfunding

Crowd Supply is a crowdfunding platform on steroids, adding fulfillment, warehouses, SEO power, and project timeline tracking to the sector, giving much needed legitimacy to a formerly flawed process.

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Crowd Supply: the next generation of crowdfunding

Kickstarter launched as the leader in the crowdfunding sector which is now growing to include various spins on the concept. Since its inception, Kickstarter has garnered the most attention and press, and is a winner for media projects like art installations, music projects, and other fundraising efforts, but in 2012 when the Pebble smartwatch put up a page on Kickstarter requesting funding and became the most funded project in the site’s history, raising over $10 million, problems arose. The smartwatch was a winner because it was so popular, but the company was so overwhelmed and surprised that they were not prepared for such a windfall.

Kickstarter is a truly helpful tool for fundraising, but beyond that, innovators are on their own to meet demand. Kickstarter wrote in 2012 an explanatory piece entitled, “Kickstarter is not a store,” meaning they do not play a role in getting any products to market, nor insuring that they make it to market, they are strictly a fundraising tool.

But what of the companies that need more than fundraising? What happens when product development is adversely affected? Enter Crowd Supply, the next generation of crowdfunding that goes so far beyond just fundraising, but puts a twist on the entire process by adding fulfillment, warehousing, progress tracking, and more.

Crowd Supply IS a store

Kickstarter wants you to know that they aren’t a store, but Crowd Supply wants you to know that they are. In fact, they are so much more sophisticated than the average crowdfunding platform that all projects are given a red light or green light by a PhD from the Massachusetts Institute of Technology (MIT) Media Lab.

Crowd Supply answers to some of the shortcomings of any crowdfunding site for products that don’t offer store functions, from how the project pages function to managing product fulfillment, tracking, returns, and more.

Crowd Supply funding works differently

One of the problems with crowdfunding sites is that the funding period lasts for a specific period, usually around 60 days, and fundraisers cannot access the funds before that period is up, even if they hit their fundraising minimum amount. Kickstarter, for example, does not release funds to be used for the product until 20 days after the fundraising date passes.

Crowd Supply’s President, Lou Doctor tells AGBeat that they answered to this conundrum by funding the project as soon as their fundraising goal is met so that they can begin production. If more funds are raised, they can scale to increase production, appealing to product developers who want nothing more than to get started.

Brands get the SEO juice and actual preorder pages

Another way Crowd Supply has put the crowdfunding process on steroids is by giving complete control to the fundraiser. Kickstarter is a massive SEO powerhouse and can give a brand a major boost, but because of their size and power, they inadvertently snag all of the SEO juice for the young brand’s name, as fundraisers cannot access their project page after the fundraising date passes to direct potential buyers to an order page.

Crowd Supply offers more than just a fundraising page, as each page that meets their goals is automatically turned into a preorder page, allowing brands to offer target delivery dates for batches of pledges so that no one is disappointed by endless delays (a bad start for any brand, we would add) as has happened with popular projects on other crowdfunding sites.

This setup is unique because most payment processors don’t want consumers to be at risk, so Crowd Supply mitigates consumer risk by allowing preorders to be cancelled for store credit, so funds are still collected.

Adding fulfillment and warehouses to the mix

The founders come from the e-commerce world and their existing companies will deliver $50 million in sales in 2013 alone, so what they’ve done is take the backbone of product development and added it as a layer to strengthen the crowdfunding platform. Genius.

They already have fulfillment for creators, warehouses, negotiated UPS rates, and can handle getting tracking information instantly to customers, handle return logs, etc. Most crowdfunding projects have to hire siblings and temps to slap stickers on packages in the inventor’s basement, with no real accountability to the consumer.

The company looks at their offering as ideal for serial project creators and assert that they are poised to have long term relationships rather than a simple one time event as the current crowdfunding world revolves around. We like to think of Crowd Supply as crowdfunding on steroids, built from the ground up for grownups.

Business Finance

Under-representation of women in fintech: Let’s talk about it

(BUSINESS FINANCE) Representation of women in fintech remains scarce despite a prevalent population of interest. Why is this the case, and what can we do about it?

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Woman reading a document in front of her computer, one of the women in fintech.

Women are 50% of the population – so why are there only 9 of us on the 2020 Forbes Fintech 50?

I’m personally shocked by how underrepresented women are in such a lucrative industry. By 2022, it’s predicted that fintech, or financial tech, will be worth $26.5 trillion, and we cannot afford to miss out.

And I’m serious when I say fintech is truly taking over. This includes payment processing, online and mobile banking, person-to-person payments (think Venmo or Cash App), financial software, to name a few. For some perspective, half of consumers use digital banking services as the primary way to manage their money. That’s a big deal.

So why does it matter that women are drastically underrepresented in leading roles at these companies?

  • Women CEOs receive only 2.7% of all VC funding – that is astonishingly low, considering that the remaining 97.3% is secured by their male counterparts.
  • While a study conducted by the Harvard Business Review on leadership skills found that women scored higher than men in 17 out of 19 categories (I could’ve told you that), women founders make up only 17% of fintech companies. Some of the categories tested on were:
    • Bold leadership
    • Taking initiative
    • Resilience
    • High integrity & honesty
    • Collaboration and teamwork (this is a big one!)
    • Inspiring & motivating others

If you’re a woman interested in business, tech, or entrepreneurship looking to break into the big leagues, here’s some exclusive advice from lady CEOs, founders, and COOs:

  • Stay Passionate
    Suneera Madhani, Founder + CEO of Fattmerchant, says: “…remember why you started and hold that close to your heart when times get tough.”
  • Be Open to Learning
    “Never behave as the smartest person in the room because you may miss some of the best ideas.” Says Snejina, Co-founder + CEO of Insurify.
  • Trust Your Intuition
    As the Founder + CEO of Tala, Shivani Siroya urges us to: “Stay excited, focused on results and be incredibly optimist. It’s okay to really believe in your gut – just make sure that you see the results with it.”

2021 is a new year full of opportunity – even though the odds are (and always have been) stacked against us, let’s have this be the year where women techies and business owners capitalize on their leadership skills. We have lost time – and profit – to account for.

Author’s Note: Thank you to CreditRepair for the linked infographic!

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Business Finance

Is the convenience of payment apps worth the risk of fraud?

(FINANCE) Peer-to-peer payment apps like CashApp and Venmo are quick and convenient – for users and scammers alike. What are Square and PayPal doing to help?

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CashApp open on phone one of payment apps susceptible to fraud.

More and more people are using peer-to-peer payment services, like Square’s Cash App and PayPal’s Venmo, to make purchases, handle their banking, or just to pitch in on the pizza you and your friends had delivered last night. These payment apps have been particularly useful for folks who may not be able to afford bank fees or have other barriers preventing them from accessing a bank account.

That’s because they are very easy to set up, requiring nothing more than an email address or phone number. Even folks with bank accounts are using these payment apps more as folks are trying to stay home and reduce their in-person contacts during the COVID-19 pandemic. The number of daily users on Venmo has grown 26% since last year.

While these apps bring a lot of convenience to our lives, they have also made running scams more convenient for cybercriminals. According to experts, the rate of fraud on Venmo and Cash App is three to four times higher than with credit or debit cards. While PayPal and Square don’t provide statistics about scams, there are some telling signs. The New York Times and Apptopia, a mobile services tracking firm, found that the number of users mentioning frauds or scams in Venmo customer reviews had increased by four times in the past year.

It seems that Cash App has the most fraudulent activity, with the Better Business Bureau reporting twice as many complaints about Cash App as Venmo, even though Venmo has more users. Zelle has a better track record when it comes to fraud, most likely because it requires a more thorough authentication process when setting up an account. It also has better legal protections for folks who have been scammed.

Some of the things that make these payment apps so quick and easy are exactly the reasons it’s so easy to scam users. The instantaneous payments mean that there’s not much of a vetting process, and not much time to catch a fraudulent transaction before it’s too late. Because you only need an email address or phone number to set up an account, it’s easy for criminals to set up dummy accounts for running scams.

Other scams have been facilitated by the marketing choices of the companies. For example, Cash App regularly runs a Cash App Friday promotion, in which users are rewarded for sharing their username, or $Cashtag, on social media. Unfortunately, this has essentially created a Rolodex of potential victims for criminals.

Square and PayPal are doing what they can to address the problem. Lena Anderson of Square says that they are “aware that there has been a recent rise in scammers trying to take advantage of customers using financial products, including Cash App. We’ve taken a number of proactive steps and made it our top priority.”

One “proactive step” Square has taken is to roll out a customer service phoneline, not only to make it faster and easier for customers to vet potentially fraudulent transactions or report scams, but also because scammers have been creating fake customer service phonelines to target users and collect their personal information. The phoneline is currently available to only some customers, but Square plans to scale it up to be available for all users over time.

Until these companies come up with more robust security systems, there are several things you can do to avoid scams. While you might get a cash bonus from Cash App, it’s probably not worth it to share your $Cashtag on social media. Only share your username with people you know. Never share your personal or banking information with strangers. Examine all transactions carefully. Some scammers are stealing money by making a payment request from an account that looks legitimate, but may have a slightly different spelling or one-letter change in the name.

No legitimate agents of these services should ever ask you for your sign-in code, or to download software, and you shouldn’t click on any links in messages promising cash prizes. Never send small payments in exchange for a promised reward – if it sounds too good to be true, it’s probably a scam. Don’t use digital payment apps to pay for or receive payment from sales on Craigslist, Offer Up, or Facebook Marketplace.

If you think you’ve been scammed, changed your PIN number immediately and contact the company and/or the FTC.

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Business Finance

Will your stimulus check be taxed? (and other burning questions)

(BUSINESS FINANCE) One of the biggest questions of 2020 (and potentially further) is whether or not your stimulus check will be taxed. Let’s take a look at this, and other questions.

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Couple looking at computer together to see how to use their stimulus check.

We’re finally able to put 2020 – and its unending laundry list of concerns, tragedies, and turmoil – behind us. At least, it’s a new year finally, but we’ll still be feeling some of the effects from a historically volatile time for a bit, and part of that includes one of the great certainties in life – filing taxes.

Arguably the biggest question that has been repeatedly asked is whether or not a stimulus check is taxed. This is against the greater backdrop of questions as well – does it affect (lower?) one’s tax refund, whether or not someone qualifies for the checks to begin with, when additional rounds might be deposited, whether or not anything changes when filling out tax forms, and so on.

So let’s break these down as simply as possible.

Are stimulus checks taxed?
In short, no (woohoo!). The tax code states that taxes are levied on “all income from whatever source derived” unless there is a specific exemption. While that makes it sound like a stimulus check would be taxed as a form of income given that it is not directly excluded, stimulus checks are considered an advance payment of a tax credit, and thus are not considered taxable income.

Does the stimulus check lower my tax refund?
Also no (hooray!). If anything, it will increase your tax refund. Essentially, this lowers the amount of taxes you are paying. There’s more to it than that, but this is the quickest summary.

Does anything change when filling out my taxes?
I’ll start by saying this is a bit of a trickier area, and I would absolutely suggest speaking with a CPA if you have any specific or in-depth questions.

When filling out the Form 1040, there will be a line on the second page for “Recovery Rebate Credit,” and this is where a number is entered under certain conditions. This is directly related to taxes filed in 2018 and/or 2019, as these years were used to determine who gets a stimulus check and the amount. The general rule is that if there was a big change between those years – losing a job, having a child, starting a new career, graduated college, etc. – then this line may need to be filled in. Essentially, if you are/were entitled to more stimulus payout, then you would enter in the difference here.

For example, if your taxes from 2018 were used to determine your stimulus amount, and this resulted in a low payout due to a high income for that year, but then you lost your job in 2019, you’d write in the difference here. So if you received $100 in stimulus but were laid off in 2019, you could still be owed $1100 (going by the first stimulus check that was valued at $1200 for an individual). You’d enter that amount on this line, which would then lower your tax bill and potentially (should) lead to a higher refund.

Essentially, this line is where you’re stating that you are still owed additional funds that the stimulus was designed to pay out. The IRS website goes over this in some detail, where it explains that individuals who did not receive the full amount via stimulus checks (called “Economic Impact Payments”) from the CARES Act should fill this line out.

In short, if you did get the full amount? Ignore this line. If you did not, you may be eligible, and should determine what to fill in so that you maximize a potential refund.

Will I get the second stimulus check?
President Trump did sign a COVID relief bill recently that was designed to give $600 checks to individuals, as well as other stimulus benefits for unemployment and various funding programs. However, not everyone is eligible for this second check. This includes high earners (anyone with an adjusted gross incoming of $87,000 or more), dependents, and persons who lack certain legal documents/designations.

If I qualify, when do I get the second stimulus check?
Some people have already received this payment via direct deposit, and these will continue onward for the next few weeks. The IRS cannot send any checks for this second round past January 15th, 2021. If an eligible person does not receive the payment by then, they can utilize the “Recovery Rebate Credit” mentioned above when filing taxes.

It should also be noted that some individuals could receive their stimulus via debit cards, so be sure to always check your mail carefully! There’s no indication this could happen with the second round yet, but it’s always best to keep in mind.

Is the tax deadline still April 15th, 2021?
At this time, this is still the official date that taxes must be filed. It should be noted that the same deadline was originally in place for 2020, but was pushed back once pandemic-related obstacles arrived. As such, there is a chance that the date could change for 2021, but until an official ruling is given, plan on having taxes filed by the standard April 15th date (or filing for an extension if that is a possibility).

Will additional stimulus checks arrive in 2021?
While there has been talk within the government regarding additional rounds, and while many are hopeful for a $2000 check, there is no official word or regulations in place to ensure that this will happen. It is still uncertain what the incoming administration will do, can do, or be able to pass in the future; to speculate would be ill-advised at this time.

Keep in mind that debates on the second stimulus check had been ongoing since July 2020 and were only recently passed; this would suggest that additional rounds could face similar discussion.

Summary
So, the good news here is that stimulus checks are not taxed and will not affect your tax refund, and this should help a large number of the populace as we continue to work through these difficult times. There is a chance that additional payments will arrive in the future, but keep in mind that they may not arrive soon. Lastly, as I previously mentioned, know that there is a chance to file for the rebate directly on your tax forms, and that I strongly encourage you to speak with a CPA if you have any questions.

Otherwise, as sincerely as I can say this, good luck in the new year!

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