How Much Money Should You Raise?

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I’ve been on calls and video shoots with three new projects we’ll be posting in January. One of the questions that comes up is how much money to ask for. We usually recommend a couple of things to think about:

  • Our sweet spot is a range between $3000 and $15000
  • Generally we recommend asking for the lesser amount- it is entirely possible to raise more than you ask for
  • Decide how you are going to use the money and be specific: A prototype, more research, an early production run, a next generation version, etc.
  • You can explain how you’d spend additional money if you get it: With $3000 we can take our current version and upgrade it to use cheaper parts. If we raise $6000 we’ll do that and build a test production run of twenty gizmos made for testing.
  • It’s easier to raise money if you show the potential supporter that their contribution is going to result in measurable progress towards a usable product, service or device, etc.

These days the ability to make things at lower cost is a reality. Innovations like rapid prototyping, 3D printers, agile software development, minimal viable product, cloud access to tools and other often free resources mean you can change the world for a few dollars.

To see how far this can go, read about an entrepreneur that is funding six startups with $37.00 dollars each (that is not a typo). The 37 bucks gets you six months of server rental and a hot beverage. He has had hundreds of applications for the program!

How to strengthen the story of your innovation

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We have a bunch of exciting new Projects coming to Innovocracy after the holidays. And one of the big value-adds we work on with our Innovators is helping them tell their story in a compelling way. Story is the key word- we respond to stories emotionally and if we have an emotional response we are more likely to reach into our pockets and support that innovation.

So let’s look at some factors you can use to strengthen any story:

  • Humanize it. Who will be directly for affected, for the better, by your invention? Innovocracy is a social innovation platform. Tell us, and the world, who benefits and how.
  • Get specific. Tell a story about one person who you want to help or have helped. With the autism training device we funded last year we heard about the family of a twelve year old girl who was trained with the device. It changed their lives (think about it).
  • Be excited. Enthusiasm is contagious. Don’t speak in a monotone or talk about tech specs. Talk about what excites you about the work you’re doing!
  • Get testimonials. Real people talking about your invention and its potential. Quotes are great but video is better. Powerful.
  • Update frequently. Keeping people posted on progress is a part of the reward they get for supporting you. Make them feel their donation is still making a difference.
  • Tell specifically how you will use the funding: Goal, timeline, desired result, testing, availability, website, prototype, product, etc.
  • Talk about your qualifications as they relate to your project. A long list of achievements is nice to have but only those that make you exceptionally qualified to build your Project and promote it are important.

As you start thinking about funding a Project via Innovocracy start gathering a tickler file of this info. Anecdotes, interesting or unexpected outcomes, people stories and more. Photos and video clips, even drawing or specs. We’ll help you post them here and spread the word on social media. It’s easy with a powerful story.

The Wrap-Up From MonoMano

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We just received a great summation of how MonoMano benefited from working with Innovocracy. They are a fully operational small business bringing the joys of cycling to those with disabilities. I’m not going to paraphrase, here’s the whole thing- and it was a total pleasure on our end too!

“Dear Mikael,

I am pleased to submit a Final Report on the Innovocracy funding of MonoMano.  The team has completed the expenditures of the funds provided through Innovocracy and have been able to make substantial progress, in spite of very busy schedules.  David sent me the following note to summarize their activity and report back to you and possibly the donors.  Their expenses included two tricycles for testing and marketing, materials and supplies, contract manufacturing, business software, insurance.    This funding mechanism was really invaluable for the team and it’s very rewarding for all of us to see the potential for our students to extend their successful projects.  We look forward to working with you again!
Funds received:    $5931
On behalf of MonoMano, Inc., I would like to thank everyone at Innovocracy, Prof. Amy Lerner, Prof. Laurel Carney, and everyone who donated to our cause. These invaluable mentors coupled with generous financial contributions were paramount to our success thus far, and we are incredibly grateful for all of the support. Thanks to these resources, MonoMano has translated a first generation design in April to an up-and-running small business.
Upon first receiving funding in early July, our team was able to file a provisional patent for the design and establish the MonoMano, Inc. as a Delaware S-corp. Meanwhile, the team was making a few design improvements, and we purchased the materials and tools required to manufacture the first 25 units in August. Between August and now, Dominic, Sara and Martin have been working hard to finalize the devices into customer-ready products. In September, MonoMano acquired a recumbent tricycle in order to properly calibrate and test each handlebar for quality and safety.

Recently, MonoMano purchased liability insurance and transitioned into sales and marketing efforts. Our website is now fully-functional and linked to PayPal for easy sales (www.monomanocycling.com). This month, the team published a Facebook advertisement and began making sales calls. Another tricycle was sent to Dominic in Florida to be used as a local marketing tool. User installation instructions have been created and are included with the purchase of the device. Additionally, we have purchased tax software to help with filing in the coming months. We are excited to have two new customers, and are looking forward to the exciting future of this venture.

I would like to reiterate how valuable Innovocracy and our advisors at the University of Rochester have been to our team. The continual feedback, guidance and support has been integral to our success.
- David Narrow, CEO”
Is that cool or what?

The state of connected technology (but where is social funding, Mary?)

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Mary Meeker of Kleiner Perkins has released her latest state of the connected world PPT deck and it is loaded with insights. But, curiously, social (crowd) funding and its repercussions are not covered. But we highly recommend reading the deck to get a picture of the future we live in, particularly the light vs. heavy resource section. Amazing.

How to write a video script for your Innovocracy Project (and some tips!)

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The better your video, the more likely you are to get funded- it’s as simple as that. But putting a video together can be intimidating so we’re sharing some tips on how to create a strong message without a budget or crazy skills.

Note: Find out if your university has a video team that can help you- most do. And check with us- we can help connect you with the right people on your campus.

Write A Script

  • When you write your script, put each sentence on its own line and triple space it.
  • One page is going to be about a minute.
  • Keep the video under two minutes if you can.
  • Use this format:
    1. Start with a quick description of the problem you’re solving, i.e. “Writing is vital but the way we teach it doesn’t always work. We’re developing a new way to teach writing.”
    2. Introduce yourself and include the most compelling professional/educational qualification you have for this project: “I’m Sue Frost and I’ve been teaching writing for twenty years. And I’ve discovered a new way to teach people to write.”
    3. Tell what you’re going to use the Innovocracy funding for: “We’re developing an app that changes the way we teach writing. Your contribution will help us finish the software and get it into the hands of writing teachers and students.”
    4. Describe your project with three details: “The software works on any iPhone, iPad or Android device. It’s simple to use and provides coaching, creativity exercises and more. And it’s fun!”
    5. Make an appeal: “Your support can help us teach a vital skill, in a new way, and change people’s lives. All for just a few dollars!”
    6. Thank them in advance.

That’s enough.

Production (don’t be scared!)

Everyone gets nervous on camera. We actually recommend doing a practice read-through and recording it with a laptop camera, at your desk. Relax and be yourself- people donate to the person as much as the Project. If you have a team, consider taking turns reading lines. If one person stands out, consider using them as your spokesperson.

When you read, stop and pause after every line. Why? Most people talk too fast. But more important, when you edit the video the pause gives you a place to cut. You’ll be glad you did.

Gather photos or data on slides and put them into a file. Resize large images to a reasonable size. When you edit, add these in where they are relevant. We all like pictures! If you don’t have any, take some pictures of your team in your campus or in your lab.

Use a simple video editor like iMovie and stick the video together. Just make it flow, don’t worry about looking homemade- it’s fine like that.

Once your video is together send it to us and we’ll take care of getting it on YouTube and other places. Then take those links and use them to tell the world about your project. And be sure to point them to your Innovocracy Project Page!

MonoMano Progress Update

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We checked in with the MonoMano team to check on the progress of their one arm control bar for cyclists, one of the first funded Innovocracy Projects. Things are moving along for the business they’ve formed around their invention (with a little help from the Innovocracy team!).

From David Narrow of MonoMano:

“MonoMano has now transitioned from manufacturing to sales and marketing efforts. We have established a $50 installation quote with Park Ave bike shop, have a Facebook ad targeted to stroke survivors, and have begun making sales calls to adaptive sports organizations and physical therapy outpatient centers. I have attached a photo of our most recent handlebar, and should have a photo with the handlebar mounted on the trike coming soon.”

Actually the image above showed up right after Dave sent that message! Fantastic work guys and thanks to everyone whose funding helped make this a reality. More images and info on the MonoMano website.

Innovocracy is a Peer Network

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We realized fairly early on that the Innovocracy business model was not going to be ‘help academic innovators raise funding and take a cut‘. It wasn’t viable and we feel strongly that as much of the funds raised as possible should go directly to the innovator. This is a key unique factor for the Innovocracy model in academia where very often a portion of all funding goes to the university for overhead. In our platform all funds raised, excepting credit card processing fees (which do not go to us), end up being used for actual innovation.

So what was the model? After all, this thing needs money to grow. What we did realize early on is that we are building a network. Each time a university joins us that network is expanded by hundreds of thousands of potential supporters and thousands of potential innovators: Students, faculty, administrators, alumni, employees, parents and friends. Each university member expands the network by that much potential. This is the lever that moves innovation in academia. Innovocracy is a peer network.

Wikipedia is a peer network. Facebook is its own kind of peer network, actually a network of networks. How important is this? Take a look at this video promoting a new book on the subject. It gives a very clear explanation of just how important this phenomenon is already.

Thanks to Fred Wilson for his post on peer networks and entrepreneurial communities.

What is a ‘legitimate’ crowdfunding site?

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Crowdfunding is an exploding sector with new sites appearing almost daily. In part this is driven by the success of seminal funding sites like Kickstarter and IndieGoGo. The recently passed JOBS Act with its loosening of the rules for raising equity funding (subject to yet to be determined SEC guidelines) has also opened the floodgates. However crowdfunding is about money and that attracts its share of less than legitimate players.

So how do you determine if a site is legitimate if you are thinking of posting a project or donating? As observers and active participants in the social funding world, particularly as it applies to universities, we have some internal guidelines for determining whether a site is the real thing:

  • Ownership. Is it clear who owns the site, why they started it and what their reasons are for starting it? A business, a charity, a not-for-profit? These things should be clearly stated on the site.
  • Funding restrictions. Funding restrictions include amounts to be raised, type of projects, time deadlines and curation of projects by the site managers. Funding restrictions are actually a good sign as they indicate the site’s primary purpose.
  • Revenue share and financial information. How much of the money goes to the project owner? What other fees are there and are they clearly stated upfront (not hidden in the fine print)? Legitimate sites clearly state how they are compensated.
  • Credit card processing. Is it secure? Do they clearly state their policies on the use of your information? How much of your donation goes to processing and other fees?
  • Do they claim to raise equity for businesses? This is legally complex territory. If they cite the JOBS Act and claim to raise equity be careful- this provision is not yet approved by the SEC and signs are that it will not be until 2013 at the earliest. Check with your attorney before raising equity or investing via a crowdfunding site.
  • If they claim association with a University or other organization, that association should be clearly spelled out. Universities have rules and regulations associated with raising money for projects developed under their auspices. Make sure your university approves the site being used before you post a project or donate.
  • Communication. Does the site have a mechanism for keeping donors up to date on the status of projects they have contributed to?
  • Use of Funds. How can you be sure your money is actually used for the project you donated to? In our case the funds are administered by the university members.

Crowd or social funding is a unique way to support entrepreneurship, research, new businesses, artists and creators. Its potential is virtually unlimited, however it is important to do a little research before you choose a platform for your project or donation.

MonoMano Update: See what your funding helped build

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The assembled MonoMano control arm

25 New Control Arms Ready For Final Assembly by MonoMano

Innovocracy’s second funded project from the University of Rochester has used their funds to build 25 improved models of their handlebar control arm designed to enable those with the use of one arm to ride a recumbent bike. MonoMano is a business now and though its five founders are headed for grad school they are continuing to refine their designs, take them to market and work on new projects. Here’s Amy Lerner’s update:

“The MonoMano team has made excellent progress during the last few months, showing great momentum towards the launch of their product. The team has focused their expenditures on purchasing the materials and components necessary to assemble the first 25 products to be delivered – modified handlebars compatible with the identified models of the tricycle. They have also identified a potential manufacturer for some of the components and investigated appropriate insurance necessary before delivery of the product to customers. A company web page is in place and procedures for marketing are under development. The team has begun establishing a board of directors and advisors and has done a remarkable job proceeding with a team dispersed around the country.

The breakdown for anticipated expenses (including approximately $1750 already spent) is as follows:

Components, bicycle parts, packaging: ~$2000 (most already spent)
Liability Insurance: ~$1000 (in October)
Tricycle (for testing and verification of manufacturing): ~$1000 (in October or November)
Outsourced Manufacturing (vendor identified) ~$2000 (in November)

… We are all very grateful for your support in launching this exciting company whose product will serve the needs of a unique and deserving group!”