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Crowd Supply’s early payment policy for project creators

Crowd Supply launched last month to step in where the founders saw crowdfunding falling flat, now announcing an early payment policy so project creators can begin actually working on their products rather than wait around for cash to clear after a successful round of crowdfunding.

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Crowd Supply makes official policy to pay project creators early

Crowd Supply launched last month as the first marketplace to combine crowdfunding with product development, allowing project creators to fully capitalize on the high level of interest that they initially generate with backers and early adopters, taking the product all the way to delivery, even handling warehousing and fulfillment. In their first week, over $40,000 was raised on the fledgling site.

Shortly after the launch, the company has made official an early payment policy for project creators, releasing backer funding as much as two months ahead of Kickstarter and others the require project creators to wait up to 30 days after a successful crowdfunding campaign ends to receive any of the funds, which many have complained set their project timeline back, giving pledges a bad impression as they are increasingly delivering products later than their projected date.

You can’t time the creative process

Kickstarter defends their process, stating that “We at Kickstarter know quite a bit about lateness ourselves, funnily enough. Our original plans had Kickstarter launching in April 2008, but a variety of obstacles delayed the launch an entire year. Does this delay make Kickstarter a failed project? We hope not. Ultimately the creative process takes as long as it has to take.”

Crowd Supply said, “This may be an appropriate position for artistic projects, but for most high tech consumers, the statement is preposterous. For project creators that are designing compatible accessories for popular electronic items like smartphones, time is always money. The short product life of these consumer electronics products requires a time-is-of-the-essence approach to all aspects of product design. ”

According to a CNNMoney study, fully 84 percent of all Kickstarter projects ship late, which Crowd Supply says puts creators at a disadvantage before their funding campaign is even finished.

Funding and timing is critical

“Historically, one of the main shortcomings of crowdfunding platforms is the inability of creators to complete high-demand projects on time,” said Lou Doctor, co-founder and CEO of Crowd Supply. “Projects that reach their funding goals early in their campaigns are often generously overfunded. Then, due to the unexpectedly high volume of interest, creators end up struggling with fulfillment and deliver late. On Crowd Supply, when a project reaches its funding goals early in its campaign, creators will receive funds to immediately jump start their development. Overfunded projects on Crowd Supply will have a much better chance of staying on schedule.”

Backers’ pledges are processed immediately after a Crowd Supply campaign reaches its funding goal. Five business days later, funds are available to project creators. In the case of a 60-day crowdfunding campaign, creators could possibly see their funds much as a full two months ahead of other crowdfunding sites. “For those developing products where time-to-market is important, that difference is critical,” Crowd Supply notes.

Marti Trewe reports on business and technology news, chasing his passion for helping entrepreneurs and small businesses to stay well informed in the fast paced 140-character world. Marti rarely sleeps and thrives on reader news tips, especially about startups and big moves in leadership.

Business Finance

Will cash still be king after COVID-19?

(EDITORIAL) Physical cash has been a preferred mode of payment for many, but will COVID-19 push us to a cashless future at an even faster rate?

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No more Cash

Say goodbye to the almighty dollar, at least the paper version. Cashless is where it’s at, and COVID-19 is at least partially to thank–or blame, depending on your perspective.

Let’s face it, we were already headed that direction. Apps like Venmo, PayPal, and Apple Pay making cashless transactions painless enough that even stubborn luddites were beginning to migrate to these convenient payment methods. Then COVID-19 hit the world and suddenly, handling cash is a potential danger.

In 2020, the era of COVID-19, the thought of all the possible contaminants, traveling around on an old dollar bill makes most of us cringe. Keep your nasty sock money, boob money, and even your pocket money to yourself, sir or madam, because I’ll have none of it! Nobody knows or wants to know where your money has been. We like the idea of taking your money, sure, but not the idea of actually touching it…ewww, David. Just ewww.

There is no hard evidence that cash can transmit COVID-19 from one person to the other, but perception is a powerful agent for changing our behavior. It seems plausible, considering the alarming rate this awful disease is moving through the world. Nobody has proven it can’t move with money.

There was a time when cash was King. Everyone took cash; everyone preferred it. Of course, credit cards have been around forever, but they’ve always been just as problematic as they are convenient. Like GrubHub and similar third party food delivery apps, banks end up charging both the business and the consumer with credit cards. It’s a trap. Cash cut out the (greedy) middle man.

Plus, paying with a credit card could be a pain. Try paying a taxi driver with a credit card prior to, oh, about 2014 when Uber hit the scene big time. Most drivers refused to take cash, because credit cards take a percentage off the top. Enter rideshare companies like Uber. Then in walks Square. Next PayPal, Venmo, and Apple Pay enter the scene. Suddenly, cabbies would like you to know they now take alternate forms of payment, and with a smile.

It’s good in a way, but it may end up hurting small businesses even more in the long run. The harsh reality of this current moment is that you shouldn’t be handling cash. No less an authority than the CDC recommends contactless forms of payment whenever possible. However, those cabbies weren’t wrong.

The banking industry has been pushing for a reduced reliance on cash since the 1950s, when they came up with the idea of credit cards. It was a stroke of evil genius to come up with more ways to expedite our lifelong journey into crushing debt.

The financial titans are very, very good at what they do, at the expense of all the rest of us. The New York Times reported on the trend, noting:

“In Britain alone, retailers paid 1.3 billion pounds (about $1.7 billion) in third-party fees in 2018, up £70 million from the year before, according to the British Retail Consortium.

Payment and processing companies such as PayPal (whose stock is up about 55 percent this year) and Adyen, based in the Netherlands (up 72 percent), also stand to gain.”

All kinds of related banking-related industries stand to benefit as well. Maybe we’ll go back to spending physical cash one day, but I don’t think there’s any hurry. Fewer old grandpas are hiding their cash in their proverbial mattresses, and the younger, most tech-savvy generation seems perfectly content to use their smart phones for everything.

We get it. Convenience plus cleanliness is a sweet combo. I only wish it weren’t such a racket.

If this trend towards a cashless future continues, there may be a possibility that travelers in the future may not experience what it’s like to fumble with foreign currency, to smile and shrug and hand over a handful of bills because they have no idea how many baht, pesos, or rand those snacks are. They may not experience the realization that other countries’ bills come in different shapes and sizes, and they may not come home with the most affordable souvenirs (coins and bills).

We shall see what the future holds. Odds are, it may not be cash money, at least in the U.S. I hope the cashless movement makes room for everyone to participate without being penalized. We’re in the middle of a pandemic, people. We need to find more ways to ease the path for people, not callously profit off of them.

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Business Finance

How NASA helps small businesses reach for the stars

(BUSINESS FINANCE) NASA has been providing $51 million in grants to small businesses and innovators.

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NASA grants

With the political and social climate that we are all trying to survive this summer, there only seems to be a few things that bring us a light of hope. For some it’s the little gestures that keeps the smiles on our faces; little helping hands that keep us going from day to day. But thanks to some forethought in our government system, there are some rather large helping hands coming down from the top as well. The organization that sends people to the moon is also making some dreams come true here on Earth.

NASA has just announced their latest batch of small business grants. Grants that amount to a total of approximately $51 million. This money is being sent out at the most crucial early-stage of small business funding. Over 300 businesses are receiving up to $125,000 to develop and bring new technologies to the world.

This grant system has been in place nearly as long as NASA itself. The Small Business Innovation Research/Technology transfer program is designed to bring in entrepreneurs and inventors’ ideas, and combine them with NASA’s assets to bring their dreams to fruition, bringing something from the lab to the marketplace.

It is set up into a three-phase system. According to The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR), the first phase, Idea Generation, provides grantees with up to $125,000 for a 6 – 12 month period to “establish the technical merit, feasibility, and commercial potential of the proposed R/R&D efforts and to determine the quality of performance of the small business awardee organization prior to providing further Federal support in Phase II”. If they succeed, they may be eligible to move onto Phase II, where they will be awarded a new grant of $750,000 for 2 years to continue the R&D efforts and start on a Prototype Development. Phase III is called the Infusion/Commercialization stage and it is the culmination of years of work and grant access for these businesses. This also includes a few extra requirements like matching funding for things like marketing.

Over the years, the selection has covered numerous disciplines with an extraordinary range of industries. Some of the highlights this year are high-power solar arrays, a smart air traffic control system for urban use, a water purification system for use on the moon, and improved lithium-ion batteries. These are just a few of the many innovative projects. The list covers a huge assortment, but a few people have noted the number of neuromorphic computing efforts as well.

This list is updated periodically throughout the year as each deadline is met from previous grant holders. It’s a constantly updating assortment of tomorrow’s toys, and a great way to look toward the future.

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Business Finance

Senate unanimously votes to extend PPP coverage

(BUSINESS FINANCE) The U.S Senate extends PPP spending until August 8th in an effort to support small businesses who have been hit hard by the pandemic.

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PPP application

Small businesses trying to survive the pandemic have been given a 5-week extension, until August 8th, for money remaining in the Paycheck Protection Program (PPP) to be spent. The Senate voted Tuesday evening, less than 4 hours before it was set to end, to extend the federal loan program that was slated to end with more than $130 billion in unspent loan money.

The approval of the extension required unanimous agreement from all 100 senators, which many lacked confidence would happen. Senator Jeanne Shaheen (D-NH) said, “I came here thinking that we would not be able to get agreement.” But with outbreaks on the rise and states slowing effort to reopen their economies, the consensus is that another measure will be required as the $2.2 trillion stimulus law expires at the end of July. PPP has become a bipartisan action as lawmakers from both parties are inundated with requests for assistance. The program has apportioned $520 billion in loans to over 4.8 million American small businesses across the nation, managed by the Small Business Administration.

The SBA faced criticism for distributing billions of PPP funds to publicly traded chains, in addition to the small businesses it was intended. $38 billion were ultimately returned to the government after attention was brought to the high profile recipients.

The short-term agreement came together with advocacy from across the aisle from senators including Sen. Marco Rubio (R-Fla.), Susan Collins (R-Maine), Christopher A. Coons (D-Del.) and Minority Leader Charles E. Schumer (D-N.Y.). Senator Marco Rubio (R-FL), chairman of the Small Business Committee said before Tuesday’s vote for the extension, “Obviously, we’ll have to be more targeted at truly small businesses and, in addition to that, I’m also developing a program to provide financing for businesses in underserved communities or opportunity zones and other ZIP codes that would fall in that category.”

The Treasury Department and SBA credit PPP with saving millions of jobs. Though rules have been loosened by Congress, the SBA, and Treasury to allow more companies to receive funds and make loan forgiveness easier, borrowing from the program has slowed to a trickle.

The legislation is now headed to the House, which had already left for an expected 2-week recess before the bill was passed by the Senate. The bill would also require President Trump’s signature.

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