Tag Archives: Wall Street Journal

Housing Bust Is Over! Not So Fast.

The housing experts, Ben Bernanke, the Obama administration, and the Wall Street Journal all want us to believe that the housing market has turned—at last.


The next thing out of his mouth will be Quantitative Easing, Round 3.

Headlines like this are in the news this week: “The U.S. finally has moved beyond attention-grabbing predictions from housing “experts” that housing is bottoming. The numbers are now convincing.”

And this: “Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. “We finally saw some rising home prices,” S&P’s David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.”

Housing starts rose 6.9 percent to a 760,000 annual pace after a revised 711,000 rate in May that was faster than initially estimated, the Commerce Department reported today in Washington. The median forecast of 79 economists surveyed by Bloomberg News called for a 745,000 rate. Which means they were off by 2%. I don’t think this grounds for celebration.

Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months’ worth despite all the foreclosed homes that lenders own. The fraction of homes for sale that are vacant is at its lowest level since 2006. Which means nothing since the 2006 number was normal, and banks have been holding on to property that they have foreclosed in order to not flood the market and drive up inventory.

In other words, these numbers are completely manipulated by the banking industry in an attempt to normalize the markets.

“Even with the overall economy slowing,” Wells Fargo Securities economists said, cautiously, in a note to clients, “the budding recovery in the housing market appears to be gradually gaining momentum.”

Housing is still far from healthy despite the Federal Reserve’s efforts to resuscitate it by helping to push mortgage rates to extraordinary lows: 3.62% for a 30-year loan, according to Freddie Mac‘s latest survey. Single-family housing starts, though up, remain 60% below the 2002 pre-bubble pace. And, by the way, try qualifying for a mortgage these days. Ha!

Americans‘ equity in homes is $2 trillion, or 25%, less than it was in 2002 and half what it was at the peak, in 2006. More than one in every four mortgage borrowers still has a loan bigger than the value of the house, though rising home prices are reducing that fraction very slightly.

Still, the upturn in housing is a milestone, a particularly welcome one amid a distressing dearth of jobs. For some time, housing has been one of the biggest causes of economic weakness. It has now—barely—moved to the plus side. “A little tail wind is a lot better than a headwind,” says economist Chip Case, the “Case” in Case-Shiller.


From here on, housing is unlikely to be the leading drag on the U.S. economy. It will instead reflect the strength or weakness of the overall economy: The more jobs, the more confident Americans are about keeping their jobs, the more they are willing to buy houses. “Manufacturing had led growth and construction had lagged,” JPMorgan Chase economists said last week. “Now the roles are reversed: Manufacturing growth has slowed as private construction comes to life.”

Unfortunately, as we see fewer jobs, all of the new construction will result in a huge inventory of new homes and further bloat an already bloated market.

The biggest threat is that large shadow inventory of unsold homes, homes which owners won’t put on the market because they are underwater, homes that will be foreclosed eventually and homes owned by lenders. Another threat is the holdback that the banks have been managing around homes already in foreclosure, so as to not flood the market. They have been trickling onto the market, slowed in part by government efforts to delay foreclosures; a flood could reverse the recent rise in prices. Or the still-dysfunctional mortgage market could get even worse. 

Don’t believe what you read, folks. The housing bust is far from over.



Happy Graduation!

No college asked me to give a commencement speech this year, but if they did, I am sure I would defer to some really great, inspiring and incredible people who have already said all there is to say to college graduates on this great day.

Dear Class of 2012,

That’s All Folks!

Voluntary as a Confession During the Spanish Inquisition.

No Winners in Ugly Greek Debt Deal, Only Lessons

Just a few hours ago, as I was starting this post, I came across this blog by Michael Casey at the Wall Street Journal, called “No Winners In Ugly Greek Debt Deal, Only Lessons.” It is very to the point, so let’s look as his opening comments:

“Technocrats in Athens, Berlin and Washington Friday are no doubt congratulating each other for designing a bond swap that slashed more than EUR100 billion off Greece‘s debt mountain.

“But let’s not kid ourselves: the two-year story behind this debt restructuring is an ugly one of politicking and wasted time. There are no winners here, and there are already more losers arising from its far-reaching ramifications.

“There are, however, lessons to be learned from this unseemly string of events. The most important is that our financial system is still trapped by the dilemma posed by Too-Big-to-Fail banks – four years since the U.S. mortgage crisis. Financial sector lobbyists who argue that now is not the time to fix that dysfunctional system should have a thorough reading of the Greece story.

“Officials will crow that a higher-than-expected 83% of Greece’s old bonds was voluntarily tendered into this debt swap and so claim justification for triggering the collective action clauses that will force the remaining holders of Greek law securities into the exchange. But without those CACs hanging like Damocles’ Sword over them, and without the pressure that governments and national central banks brought to bear on banks and pension funds from Greece, Germany and France, would so many have willingly accepted a 73%-plus write-off?

“As Commerzbank CEO Martin Blessing recently put it, this deal was as ‘voluntary as a confession during the Spanish Inquisition.’

“Truth be told, Greece can rightly argue it had no choice but to use coercion. Any less than 95% participation and the European Union would not have approved the latest EUR130 billion bailout, leaving the country unable to pay its bills and thrust into a more damaging, disorderly default.”

And, there’s more to come folks, much, much more.

Crowdfunding Set to Explode with Passage of Entrepreneur Access to Capital Act.

Nearly $100 million in seed money was pledged to start-ups and creative projects through the crowdfunding platform Kickstarter.com last year–just one of many websites now dedicated to matching projects with people who have some means and desire to support them. What Kickstarter donors got in return were things like “thank you” credits in films, DVDs, tee-shirts, flowers, cookies, and concert tickets. Federal and state securities laws prohibit these start-up operations from offering equity to their investors. The good feeling that comes from supporting innovation seems to be the main reward for many people who hand over cash to support the schemes of others online.

But what if there was potential for a financial return on these crowdsourced investments? If startups could offer stock to their small-stake supporters, some (including Amy Cortese in this New York Times Op-Ed) predict that the practice of crowdfunding would explode, opening up far more resources to entrepreneurs, spurring innovation, and creating jobs.

That’s exactly what the Entrepreneur Access to Capital Act (HR 2930) aims to achieve. The bill, has the support of President Obama and was passed by an overwhelming majority in the House in November but has been hung up in the Senate ever since.

Portfolio.com and Reuters reported on Tuesday that Senate majority leader Harry Reid announced plans to push the legislation forward. According to Reuters, the bill would:

“Create a regulatory framework to let private businesses use crowdfunding … to raise up to $2 million annually from investors pledging no more than $10,000, or 10 percent of their annual income.

Though a report in the Wall Street Journal earlier this month suggested that the U.S. Securities and Exchange Commission might stand in the way of the bill, Reuters reported yesterday that:

“The SEC is considering updating its own rules to foster capital formation. Earlier this month, an SEC advisory panel urged the agency to relax outdated rules that trigger public financial reporting for companies, but it stopped short of backing crowdfunding, citing concerns about investor protection.”

In a TechCrunch interview at the Techonomy conference last November, AOL founder Steve Case pointed out the irony in current rules that limit investing to the accredited, noting that you don’t have to be accredited to go to Las Vegas and lose $10,000 at a table in an hour.

But “there are real concerns,” as Cortese noted in her Times Op-Ed:

“The S.E.C. must balance its dual mission of facilitating investment and protecting investors, and as we all know, snake-oil salesmen are alive and well on the Internet. Furthermore, Wall Street banks are likely to fight any efforts to encourage crowdfunding because it cuts them out of the equation. But the potential rewards outweigh the risks. With such sums, the hazard to any single investor is limited. And information is more freely available today than in the 1930s, when the regulations were written.”

Just how great is the potential of the policy to spur economic growth? A Capital Creation and Crowdfunding Conference in Los Angeles next month promises to explore “how the rising private markets will lead the nation toward an era of economic prosperity.”

And the industry publication The Daily Crowdsource is hoping to figure it out for us. They’re using the crowdfunding platform RocketHub to raise capital to conduct a crowdsourcing market research report.

Crowdfunding: The Next Big Disruptor!

Social networking comes to finance

Crowdfunding may be a big disruptor. The arcane world of Wall Street and the City of London have kept a tight grip on world of finance for so long and has become so incestuous and expensive (in the US, the legal fees alone for a ‘direct public offering’ could run to $100,000), it is no surprise that people who want to start an enterprise are finding many ways to side-step them. Crowdfunding, sometimes called crowdfinance or crowdsourced capital, is in the process of reinventing finance $100 at a time.

Rather than imagining that you can develop a fat business plan to convince a single investor, crowdfunding allows you to pitch to a large number of people simultaneously and get small dollops of investment that can add up to the amount you seek. But there are some limitations.

SEC Restrictions: The SEC 502(c) Rule prohibits issuers from general solicitation and general advertising for private placements, but one method of demonstrating that the sale of a security through a private placement is not the result of general advertising or general solicitation is for there to be a “documented substantial and pre-existing relationship” between the issuer and the prospective investor, such as ‘friends and family.’ This is a way that crowdfunders can avoid sanction. The interesting thing is that there is no definition of what constitutes a “pre-existing” relationship. “Substantive” means that if the company (or a person acting on its behalf) has reliable knowledge or information regarding the prospective investor it should be sufficient that it can evaluate the investor’s financial circumstances and level of sophistication.

The SEC has given little guidance on using the Internet as a tool for raising capital, but may soon change as crowdfunding sites become more creative using their own online social network of “substantial and pre-existing” friends among the crowd. For now, it seems that many crowdfunders are not offering ‘securities’ as such. This is the case with Profounder (see below) that remunerates lenders by paying a royalty on sales.

In 2010, the Sustainable Economies Law Center petitioned the SEC to allow crowdfunding, within certain limits. Their submission makes interesting reading. As do the responses. It’s a matter of ‘watching this space’. Chances are high that the SEC will make a pronouncement before too long. If you want to keep up with the discussion, one way you can follow it is on Change Crowdfunding Law.

Nonetheless, it may be that the noose is tightening around crowdfunding platforms. Prosper, a closely held corporation based in San Francisco, was formed in March 2005 to operate Prosper.com, an online platform to connect borrowers and lenders. By late 2008, over $170 million in loans had been processed through the platform.

On November 24, 2008, the Securities and Exchange Commission (SEC) imposed a cease-and-desist order against Prosper because the SEC determined that the loans offered on the Prosper web site were securities and Prosper had never registered the offering of loans on its web site.

In a decision published on May 4, 2011, Hellum v. Breyer, the California appeals court in San Francisco held that members of Prosper’s board of directors who were not employees of the company could be held personally liable for the securities law violations committed by the company under California law.

The prosper.com website was still operating the following day and with over 1 million members and now with $230 million worth of loans handled, it will be interesting to follow developments.

Commenting in May 2011, the Wall Street Journal said, “With regulators considering easing fund-raising rules for start-ups, social-networking sites that link entrepreneurs to large pools of donors are gearing up for a boom.”

By November 2011, the US House of Representatives had passed HR 2930: Entrepreneur Access to Capital Act. It now needs to pass in the Senate, but it’s unlikely it will fail.

HR 2930 amends the Securities Act of 1933 to exempt from the prohibitions against use of interstate commerce and the mails for sale or delivery after sale of unregistered securities, including unregistered security-based swaps, any transactions involving the issuance of (crowdfunded) securities for which:

  1. the aggregate annual amount raised through such issue is $5 million or less; and
  2. individual investments in the securities are limited to an aggregate annual amount equal to the lesser of $10,000, and 10% of the investor’s annual income.

HR 2930 authorizes an issuer to rely upon certifications provided by investors. It amends the Securities Exchange Act of 1934 to exclude persons holding crowdfunded securities under this Act from application of “held of record” requirements with respect to mandatory registration of securities. It also amends the Securities Act of 1933 to exempt such crowdfunded securities from state regulation of securities offerings.

A shot across the pondEarlyShares, a UK crowdfunding platform has readied itself for a US launch, just as soon as the ink is dry on the Entrepreneur Access to Capital Act.” Crowdfunding is working well in the UK. It is time for the U.S. enjoy the same success,” says Maurice Lopes, the company’s CEO, having already raised over $2.5M for six companies from hundreds of small investors in only a few months.

Raising money–a blastWindowfarms, the open source hydroponic farming system and social network, has raised over $223,822 dollars on Kickstarter. This is $173,822 more than their goal, making Windowfarms Kickstarter’s most successful food project to date and one of their more successful projects period.

Obama led the way: As lawyer Tom Kappel from Nashville wrote in a law review article, “Barack Obama’s campaign raised nearly three-quarters of a billion dollars largely in small amounts over the Internet. The campaign’s ability to mobilize and monetize supporters using the Internet is often cited by pundits of all political stripes as a principal factor in Obama’s victory. If nothing else, Obama’s fundraising figures are evidence of people’s willingness to give financial support to someone they believe in—sometimes referred to as ‘crowdfunding’.”

Loan Guarantee Fund: IndieGoGo (see below) is supporting a loan guarantee fund (like the loan guarantee fund of the SBA) for small crowdfunded businesses. The money will be used as a guarantee for a loan to an entrepreneur selected by his/her peers. The Entrepreneur Commons Mutual Guarantee Fund is a project of Community Ventures, a 501(c)3 nonprofit organization.

Kiva microfinance: I am a huge fan of Kiva, the P2P micro-lender and will soon have made my 100th loan to microfinance individuals and small teams, largely in the developing world. It has used the Internet to connect small businesses in the Third World with philanthropically minded lenders in the First World. Only five years old, $74,235,600 in loans were posted on Kiva in 2010–in 54 countries.

Kiva’s marketing has been excellent and combined the use of both old and new media, to huge effect.

Crowdsourcing is itself and really rampant phenomenon now. It makes good sense when you are wanting to share your story. Or have others share theirs with you. Or both of you wanting to pool resources to some extent. So it’s not surprising that crowdsourcing is being used to get ideas, offer services, find skills–and in this case, find money. The best way into understanding crowdsourcing is to read Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business.

In the innovations field, probably the best known example of crowdsourcing is InnoCentive. It’s a place where organizations—corporations, large and small, not-for-profits and governments—turn when they have important problems that need solving. Their expertise is in Open Innovation (OI). They help expand companies’ innovation capabilities by building a more collaborative approach to problem solving, and providing the means to tap into the best minds within the company as well as creative problem solvers throughout the world.

A really interesting experiment has been mounted in Washington State: a group of East Jefferson County, Washington, citizens who are interested in facilitating financial investments to help local businesses and individuals has formed a Local Investing Opportunities Network, or LION. LION creates opportunities for local individuals and businesses to connect with local investors to build prosperous local businesses, keep investing money in our community, and help build a more resilient and sustainable economy in East Jefferson County.

LION is not a bank, lending institution, or financial consultant. In effect it’s a form of crowdfunding and its membership consists of local citizens who want to invest their money locally, thereby putting their investing money to work within our community. Keeping funds local facilitates greater economic self-sufficiency, job growth, economic development, and a dollar-multiplier effect whereby a dollar kept within the community can be spent many times over for a far greater benefit than a dollar invested away from our community.

Raising funds meets brand marketing

One of the advantages of raising money for your business through crowdfunding is that it provides the opportunity to engage customers, prospective customers as well as just plain friends, family and fans directly. If you tell people on your mailing list (from the SEC perspective, they have to be people you know–though the word ‘know’ is open for discussion) about your pitch, you may be surprised at how they will want to engage with you.

Thus you can raise money and promote your brand at the same time. Supporters will find it easier to commit small amounts of money, especially if you make it easy, for example by paying them back through revenue sharing in place of dividends or interest. In that way, once the business is up and running and making sales, they get paid out on a regular basis–monthly for example.

If you want to understand more about crowdfunding, then I highly recommend The Crowdfunding Revolution: Social Networking Meets Venture Financing.

The point about the marrying of finance and marketing is that it is entirely in your interest, whether you are raising funding or not, to develop a wide circle of relationships in connection with your venture.

Crowdfunding is coming center stage. I recommend it to anyone who needs seed money to start their business. I am sure there will be more books appearing, but right now the only one is The Crowdfunding Revolution: Social Networking Meets Venture Financing by Kevin Lawton and Dan Marom, who self-published it.

Crowdfunding has arisen in part, as a natural consequence of social networking, and in part to fill a void in seed money raising not filled by the traditional banking and finance world.

If you want to follow a campaign in favor of crowdfunding in Congress, go to Startup Exemption. And lend your vote to get this passed.

Crowdfunding first; loan and equity later

If you use your own money, coupled with crowdfinance to get off the ground, your business will be much more convincing to bankers and investors later.

Let’s assume that you put in $5,000 of your own funds and raise another $5,000 from 20 members of your ‘crowd’ who each put in $250. Then you get going and make sales of $5,000 a month. Now lets assume you were prepared to offer a royalty on sales that would have amounted to 10% on lenders’ loans had the money been put up on that basis.

Your ‘crowdbackers’ would each get paid out about $2 a month (10% on $250 over a year is $25 ÷ 12 months = $2.08). In this way you would be paying out just over $40 a month on your sales of $5,000 and so the royalty you’d be paying would be just about 1%. This could be easily managed.

Now that sales would be going well, an approach to a bank for a loan or an investor for equity would be doubly convincing because your business is

  1. generating enough revenue to pay back the loan and grow the business value;
  2. trusted by 20 people who are already getting a return on their money.

If you are going to do it on a simple basis with just a handful of friends, then make sure you use a formal promissory note vehicle to protect both parties and the relationship between them.

Cutting Edge Capital–a new approach

Cutting Edge Capital is a new approach to funding that helps ventures and organizations to raise moeny in creative ways through Fan-Based Funding; Cooperatives; Direct Private Offerings; Grants and Public Private Partnerships; Direct Public Offering. Their basic philosophy is based on the idea that there is no reason why a venture should go for the 4% of funding that is available through private equity, when they could have access to 96% that is available through public equity.

Cutting Edge Capital provides small and mid-sized businesses with the information, tools, and expertise they need to raise capital in a way that fits with their unique business model and long-term goals. As experienced business lawyers, entrepreneurs, and finance experts, the CEC team has identified capital raising strategies that allow businesses to solicit non-traditional sources of funding.  In addition to being a great way to raise capital, these strategies allow businesses to build public support and recognition at the same time they are raising funds.

Before you read much further, you may want to see the advice of Cutting Edge published on their blog: Capital on Tax on Money Raised Through Crowdfunding.

Crowdfunding replaces venture capital

Times are not good for the venture capital industry. According to Deloitte’s, the VC Industry expected to contract in traditional markets (U.S. & Europe) although to gow in emerging markets (China, India & Brazil). In 2010, they also reported that in 2009 there were 12 venture-backed IPOs and 26 through the first half of 2010 compared to 86 venture-backed IPOs in 2007.

Not surprising to learn therefore, that Trampoline Systems an enterprise software vendor based in the UK became the world’s first technology business to raise finance through equity crowdfunding. The company announced a programme to raise a total of £1 million spread over four rounds. The first round of £260,000 was completed in October 2009 and a second round of £350,000 opened in August 2010.

Trampoline has worked closely with legal advisors to ensure its crowdfunding process complies with Financial Services Authority (FSA) regulations. The company is only inviting expressions of interest from people certified as high net worth individuals or as sophisticated investors, plus Trampoline’s existing shareholders.

A development that seems to be particularly significant is AngelList–a community of startups and (over 1,000) investors who make fund-raising efficient, by direct matching. To see what users think about, the reviews are well worth reading and following up. Here’s how AngelList works:

  1. First, you create a startup profile and pick which investors can see your startup. If your profile isn’t ready to share with investors, just pick zero investors. You can update your profile and investors anytime.
  2. Every investor on AngelList sees 10-20 new startups in their feed every day. Plus they have their own non-AngelList dealflow. So you may get a few intros this way and they’re working on ways to increase the rate of these spontaneous intros.

This kind of social networking is dynamic and the founders are changing the way the system works almost every day. By the time you read this, things may well have moved on.

Crowdfunding Meets Banking

The basic idea of crowdsourcing led to crowdfunding, but it now seems also to be moving into banking. Imagine the banking revolution that could result. Take a look at Civilized Money that uses people-to-people networks to create an ethical, transparent alternative to the existing financial services industry. No gambling with your money, no fractional reserve lending, no monster bonuses. It’s banking with people, not banks. Eventually Civilised Money will offer all the services that you currently associate with traditional banks, and some you don’t. You’ll be able to choose what happens with your money, whether you participate in lending, borrowing, investing, donating, fundraising or transacting.

You can set up a crowdfunding site, too

Launcht crowdfunding platform

Launcht is a company that has produced what’s called a ‘white label’ crowdfunding platform. White label means that you can use their technology and brand design your own site for fundraising, or going into the crowdfunding business.

All the tools are there and you do not need to be a systems person to set up on your own. Based in Vermont, they’ll help with the design and configuration. They can get you started with your sales, marketing and operational plans. Launcht is one of the new breed of Benefit Corporations that are equally responsible to their three main stakeholders.

Crowds of crowdfunders

There is a fast growing list of crowdfunding sites in many industrialized countries. Each has its own particular slant and limits to the amounts that can be raised or means of repayment/rewards to lenders. The formula used by each one is different and there are differences by country, too. In the US the SEC regulates the field, but other countries are more permissive, or risky, depending upon how you see it. A crowd of crowdfunders are shown here and more are being added, almost daily.

SeedUpsSeedUps aims to plug the funding gap for early stage start-up companies raising up to $250k and allows you to gain access to a growing pool of investors, while getting a fair equity valuation and secure seed funding in your idea. You pay a low transaction fee only if funded, with follow-on growth funding. SeedUps was set up by Michael Faulkner, initially in the UK and Ireland, Seed Ups has now arrived in the US. He says, “After months of preparation and following the set up of an office in Silicon Valley, we’re really looking forward to working with tech start-ups in the US.”

Kickstarter: A fast-growing social funding site is Kickstarter. It is for creative projects rather than people starting a business as such, but some creative projects are businesses, too. Creatives pitch their idea and backers make bids to support them. An example business startup is Vere Sandal. Take a look at theirpitch on Kickstarter. The bidders generally get something back–either product, kudos or prizes.

Rockethub: Another very similar site to KickStarter is RocketHub. Describing themselves as a grass roots crowdfunding site, Rockethub’s focus is again within the creative arts, with the two audiences for the site split into ‘Fuelers’ – those providing financial assistance to cool projects, and ‘Creatives’ – those coming up with the concepts, artwork and music and in need of funding. RocketHub calls itself a community for Creatives by Creatives and as a purely indie outfit, not backed by any venture or corporate money. RocketHub is accountable to the user, they say, not bankers or the old guard.

Profounder: The Web is allowing an increasing number of innovative crowdfunding to see the light of day. The co-founder of Kiva, the first P2P microlending platform, Jessica Jackley has moved on to establish Profounder.

At Profounder you make your pitch–not a great fat business plan– and set your investment terms.

What is original is that instead of seeking capital or loans, you enter into a revenue-sharing agreement with your backers. You make money, then they do too. The web page that gets created is where you receive your funding and each quarter you post your revenues and then share them with the investors for the duration of the the investment.

Loans of up to $2m can be raised and the entrepreneur sets the terms for the royalty repayment and the term. When ‘investors’ take their money out, they can either take it as cash or divert it to a cause.

Venture Bonsai: Based in Helsinki, Venture Bonsai is a crowdfunding service for European startups looking for funding (direct investments) less than € 1m. Venture Bonsai enables entrepreneurs building what it calls online trust in order to attract investors as well as facilitates the whole investment process. The tools and processes offered include for example building the trust network, using the standardized documents and making a vendor due diligence and have it verified.

PeerBackers: It is an online funding platform that allows business owners to raise capital from their “peers”—in small increments—in exchange for tangible rewards to those who contribute. Peerbackers is led by two founders – Sally Outlaw and Andrew Rachmell, who have partnered in the past to create and produce The Next Wave with Leonard Nimoy, a television series airing on CNBC, devoted to exploring innovative technologies for both start-ups and existing companies. Peerbackers is for raising smaller sums and payback is both in kind and towards the cost of what’s being sold.

GrowvcGrowvc calls itself the Virtual Silicon Valley. Bringing a global, transparent, community-based approach to seed-funding, Grow VC can help startups secure initial funding of up to $1M US for their businesses. Grow VC will not only connect startup entrepreneurs with investors to help them discover common interests, but also provide tools for processes and transparent, new ways of doing things. Grow VC International headquarters is located in Hong Kong, with offices in the UK and Finland.

EnviuEnviu develops innovative solutions to environmental and social issues and introduces these to the market. We collaborate with a large group of young entrepreneurial people, senior executives, corporate partners and universities to co-create these innovative businesses.

Funding Circle: An online marketplace where people can lend directly to small businesses in the UK,Funding Circle eliminates the high cost and complexity of banks. People get higher, stable returns for the long term, businesses get lower cost finance to expand and develop. They trust this simple idea makes an easy to use website that hope can have a big impact. Lenders can earn annual returns estimated at 6 – 9%. Borrowers pay lenders a fixed amount each month which includes interest and a repayment amount. Loans last for 1 or 3 years.

LendFriend: here is another site where you can organize lending from friends and family. LendFriendwas founded by entrepreneurs who have had loans with friends and family. We’ve purchased our first computer with a loan from grandparents, invested in a friend to fund their first company, and helped a sister consolidate debt. By default, our Loan Management Tool is entirely free. It maintains an online record of the terms of your loan and its projected repayment schedule for your personal reference. Additionally, borrowers will receive email reminders when payments are due to their loan partners. However, if you prefer more financial security, you can also add a legally binding agreement – a Promissory Note – to your loan for a fee. LendFriend will automatically draft your selected loan terms into this document.

Raise Capital: A sort of selective Craigslist for funding, RaiseCapital allows people with business ideas to post text, photos, and videos about their projects to attract some money. That kind of funding is helpful at a time when bank loans are hard to get. Entrepreneurs can log in after paying a one-time $99 fee, and they receive a unique URL on the site as well as a visit counter to track how many people have viewed their posts. The network of investors who are interested in a particular category receive a daily update showing all the new businesses registered the day before. RaiseCapitalTV.com features new businesses in a video presentation. Charities and nonprofits are allowed to post for funding, as well.

Innovatrs: is an international, crowdsourced partnering platform. Innovatrs source the world’s most innovative entrepreneurs so people can partner with or invest in them. Innovation officers, business development or partnership directors and investors use Innovatrs to efficiently discover the most relevant entrepreneurs and ideas.

FundaBrandFundaBrand is the trading name of Crowd Source Capital Limited and is a crowd sourced funding platform where project owners can showcase their projects and raise funds to start and/or grow their businesses. Based in London, with a California office, FundaBrand offers project owners seeking funding the possibility to raise start up and/or expansion capital from a sale and lease back of their brand whilst still holding onto 100% of their equity. This is yet another variant of crowdfunding that obviates the need for compliance with SEC and equivalent rules in other countries.

CoFundIt: Based in Switzerland, CoFundIt is in Beta and already has raised quite substantial sums for projects. Members join and seek funding by making pitches in which they can have links to products or websites. The English language of the site may lead to questions.

33needs: A new crowdfunder, 33needs focuses on social enterprise. 33needs allows people to invest, make a social impact, and earn a return. Social entrepreneurs begin by applying to the 33needs investment committee, providing information and an introductory video on their project. If they are accepted, they can select a 30 or 60 day period in which to raise the chosen amount. If the goal is reached, the pledges are turned into investment, minus 5% for 33needs. Like Profounder, 33needs sidesteps restrictive US securities legislation by offering revenue sharing rather than an exchange of security.

Start Something Good: social enterprise is burgeoning–StartSomethinGood empowers people from around the world to become social innovators. By connecting social entrepreneurs with the financial and intellectual capital they need to transform an idea for improving the world into a reality, together we can turn ideas into action and impact.

Crowdrise: Like 33needs, Crowdrise is in the non-profit field. Crowdrise is about raising money for charity and having the most fun in the world while doing it. Crowdrise is way more fun than anything else aside from being all nervous about trying to kiss a girl for the first time and her not saying something like ‘you’ve got to be kidding me.’  They call it sponsored volunteerism: simply create a project page on Crowdrise to show the amazing volunteer work you’re doing and then message all your friends and family and ask them to sponsor you.

On GreenOnGreen focuses on business ideas and patents that are a part of the green economy–tries to bring inventors, entrepreneurs, and investors together by creating a “social marketplace” to connect startup businesses with the funding they need and the new technology that might help them move forward

FirstGiving: The purpose of FirstGiving is empowering passionate nonprofit supporters to raise more money than they ever thought possible for the causes they care about.partners with nonprofit organizations to allow them to plan, execute, and measure successful online fundraising campaigns. For individual fundraisers, they aim to make the process simple, effective, and even fun!  More than 8,000 non-prfoits have used them, raising over $1bn from 13 million donors. If that fails, try SocialVibe!

Supporter WallSupporter Wall gives you the ability to collect donations for any cause or project. Supporters purchase squares on your Supporter Wall. The square then displays their chosen photo and link. As squares are purchased, the proceeds go directly to you.

Catwalkgenius: On Catwalk Genius, based in UK and Ireland, you can invest in a public-funded fashion collection. You find a brand you love and buy a share for the chance to earn profits and perks. UK and Irish fashion fans can get involved for as little as £11, the price of one share. When the chosen designer makes a new collection with their public investment, supporters share in the revenues from sales.

FashionStake: is another crowd-curated fashion marketplace–FashionStake is based in New York. Along with shopping top emerging designers, you can pre-order exclusive fashion at special prices and vote up your favorite pieces. FashionStake was conceived to bring exclusive fashion from top designers directly to the public, without the large markup, restrictive choice and hassle of traveling to stores.

Indiegogo: Founded in 2008 because there are so many people in this world, with great ideas and big dreams, who are looking for the opportunity to get funding. IndieGoGo offers anyone with an idea – creative, cause-related, or entrepreneurial – the tools to effectively build a campaign and raise money. Read about Emmy’s Organics of Ithica, NY who raised $15K for their business through IndieGoGo.

Pozible: is a new crowdfunding platform and community for creative projects and ideas. Based in Sydney, Australia, Pozible has been developed for artists, musicians, filmmakers, journalists, designers, entrepreneurs, inventors, event organizers, software developers and all other creative’s, to raise funds and give project creators the break they need to realize their goals and aspirations.

SellaBand: Based in Munich and Amsterdam, SellaBand was launched in 2006 and has coordinated recording sessions for 42 artists or acts who had their albums funded by their fans. Over $3,000,000 has been invested in independent bands. Artists retain ownership of the works created and have the flexibility to determine which incentives they will offer their fans who fund them. The funding engine also allows artists the freedom to enter into deals with any label, management company, or publisher and there are no advances to pay back.

fanaticfanatic.fm is a music sponsorship platform where brands and bands can find each other. Musicians publish a new album with sponsorship from brands. No corporate sell-out – musicians take full control over choosing sponsors.

FansNextDoor: This is a Europe-based platform that empowers creatives into funding their projects, thanks to their fans’ contributions. With FansNextDoor, you submit your project online; you promote it in every way you can (online and offline); you get your funds.

CofundosCofundos helps to realize open-source software ideas, by providing a platform for their discussion & enrichment and by establishing a process for organizing the contributions and interests of different stakeholders in the idea. Cofundos is based at the Department of Business Information Systems at the Institute for Computer Science of Universität Leipzig.

CrowdCube: Based at the University of Exeter in the UK, CrowdCube is unlike many other crowdfunders in that UK-based entrepreneurs offer equity. The founders want to emulate Kickstarters, where they report the tictok venture that raised nearly $1m from 13,000 backers in a matter of weeks.

MicroVenture Marketplace: This is the financial industry’s first organization which merges peer-to-peer lending with the venture capital industry. The Austin, Texas-based MicroVentures also provides an exclusive opportunity for investors: to offer funding resources to entrepreneurs and early-stage organizations that need capital to accelerate company development.

WealthForge: Coming soon WealthForge will open new capital markets to entrepreneurs, while creating new investment opportunities for qualified investors and provide exposure and networking prospects to all users. Entrepreneurs can seek capital funding by showcasing business concepts to a network of accredited investors. Investors can easily view the best new business ideas for funding consideration. There’s also room for General Users who want to contribute services or aide in ventures.

Quirky: You might just find a product of interest on Quirky, but you can submit an idea and have it worked on by the crowd. If it wins, quirky will sell it. You might even find helpful people you’d like to link up with. Most people have earned nothing, but some have earned tens of thousands of dollars.

Starters Fund is now in Beta in Europe. It is owned by SeedFunding International Ltd, a private Limited by Shares Liability Company established in Nicosia, Cyprus. The Company belongs to the creators of startersfund.com, as well as enthusiast angel investors who financially supported the project through the early stages. Startersfund.com offers the opportunity for collecting funds through the two most common methods of crowdfunding, combining also a Virtual Business Incubator (VBI), a Business Accelerator and a specialized marketplace, in order to fully support start-up birth, growth and acceleration.