Loading...
Answers
MenuWe are looking to create a crowdfunding platform (donations-based). What things should we consider on the compliance side?
We are really staggering in launching our platform, mainly, because we are not finding clear answers on what steps to take to be compliant with regulations. We are using Stripe Connect service for the money flow but apart from that, we are overwhelmed about accounting and legal matters that seem to not be going anywhere.
Answers
I'm not a lawyer and this is not legal advice.
I recommend finding a lawyer and an accountant that specialize in crowdfunding. Legislations on crowdfunding is constantly changing so keeping up with it on your own will be a nightmare.
These types of platforms are still relatively new so It might be hard to find reputable ones with good track records.
If you would like help finding reputable lawyers and accountants that specialize in crowdfunding, I can help you with your research.
Are you looking into making crowdfunding your business model or are you trying to raise money for a certain cause? What's the purpose of the platform? That impacts all other matters.
Hello there,
For crowdfunding platforms you need to look at your idea from different perspective. there are a lot of things which need to be considered, from agreement sections that decrease number of scammers who join your website to UI and UX. Here are some friendly advice:
1 - There are big competitors like kickstarter and indiegogo out there in this market so you need some type of special difference to make your platform unique to be able to compete with them
2 - Make a targeted community on social networks(I can help you with that if you want) to have a marketing pool
3 - Try to find some innovative ideas to start your platform with them or start it with your own ideas
If you need any help or have further questions, please do not hesitate to send me a message here
You need to ensure that you build into te platform a mechanism to establish who the funders and recipients really are so that you do not become a money laundering/ terror financing point. You have to know with a high confidence level who the source of funds is and who the ultimate payee is.
Related Questions
-
How important is it for a marketplace startup to drive enough demand (customers) for your supply (sellers) to make a full time living off of it?
It's very important. (first, read this article by Josh Breinlinger - http://acrowdedspace.com/post/47647912203/a-critical-but-ignored-metric-for-marketplaces) The way you achieve success in a marketplace is by driving liquidity for both your supply & demand. Demand-side Liquidity = When users come to your marketplace, they can achieve their goals. Supply-side Liquidity = When supply comes to your marketplace they can achieve their goals... which are almost always to make money. If you're making a large amount of your supply-side users a full-time income, then you're helping them achieve liquidity. Now it's not so black and white and it doesn't always have to be a "full-time income." It depends what their goals are. E.g., 1) At Airbnb, renters aren't looking to quit their day jobs and become landlords full-time... they're just look to earn a substantial amount of income to offset their rent, mortgage, etc. So in this case, I would probably goal on # of renters that earn >$500 / month... and (in the first 1-5 years) try to grow this number by 10-20% MoM... and maybe by just 5% once you're in the mid-high tens of millions in yearly revenue. 2) At Kickstarter, the goal of the supply-side is to get their project successfully funded. They don't care if the project creator is "full-time"... they just want to make sure they meet their funding goal. This is why they talk about their 44% project success rate all the time - http://www.kickstarter.com/help/stats 3) At Udemy, our instructors want a substantial amount of their income to be driven from their Udemy course earnings... so we look at how many instructors are earning >$2k / month.DT
-
When creating a marketplace, does it make more sense to focus on stimulating demand first or supply?
Focus on the more difficult side of the marketplace. For instance, if you think it'll be easier to get suppliers, then focus first on getting buyers - always be working on your toughest problem (aka your biggest risk). You'll find some great blogging on Marketplace and Platform topics here http://platformed.info (read the ebook too!)CM
-
What is the best pricing (business model) to apply to a marketplace?
I like to separate your question into 2 sub-questions: #1 How do we determine which side to charge? #2 How much is the right amount to charge? On #1, my answer is that you can charge the side(s) for whom you add the most value. In your examples, Uber really solves a big problem for drivers, it's that they sit idle for a good part of the day, so are willing to pay a lot for new leads. (their alternative is no work) Consumers are charged more for the convenience of a private car but they are probably not so much willing to pay more for a taxi, even if they can hail one from their phones. For AirBnB, it's a mix, it's a way for landlords to monetize idle capacity which they are willing to pay for, but it's also a way for a renter to pay less than they would normally pay for a hotel. On #2 (how much), I like to triangulate a number of factors: - What's the maximum amount I can charge one side, while still being a good deal for them. - How much do I need to charge so that I can become profitable? (the economics are quite different if you charge 3% vs. 12%) - What are comparable services charging for substitutes/competitive offerings? I will just add that there is no formulaic way to determine pricing strategies (curated vs. open), and it's a lot more about what's the comparable and what the value delivered is. That's how I approached the question while deciding the business model at ProBueno.com (my startup)MR
-
Holding funds in a 2-sided marketplace?
Check out https://www.balancedpayments.com/ They are made for marketplaces. Airbnb CEO among others invested in them and they have some of the best pricing/payout fees. Also some good info on http://www.collaborativeconsumption.com/2013/10/08/online-marketplaces-are-hard/ One of Balanced Payments co-founders is writing this blog series on marketplaces.MA
-
Any opinions on raising money on Indiegogo for an app?
Apps are difficult to fund on IndieGoGo as few are successful, and we rarely take them on as clients. Websites like http://appsfunder.com/ are made for that very reason, but again, difficult to build enough of a following willing to pay top dollar for an app that could very well be free, already existing in the marketplace. A site that is gaining more traction you may want to look into would be http://appsplit.com/. Again, Appsplit Is Crowdfunding For Apps specifically.RM
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.