Noah J Nelson on Thursday, Aug. 22nd
When crowdfunding first burst onto the scene last decade it was if a massive weight was lifted. Finally there was a way for all those would-be entrepreneurs with an idea and some moxie to make their dreams a reality.
That's not how it's turned out, not exactly. The current state of crowdfunding on the big sites (that's a relative term, by the way) like Kickstarter and IndieGoGo favor products that are as close to market readiness as possible. This is a plus for perk-focused crowdfunding, but it leaves a certain amount of entrepreneurial energy untapped.
A new platform launching today aims to go after those entrepreneurs, connecting them with each other and the treasure trove of unused patents that are languishing in government sponsored research and development labs. It's called JumpStartFund.
Before digging into the details on JumpStartFund it's only fair to point out that they're not the first to enter into the burgeoning business crowdfunding space. Platforms like Crowdfunder have been launched ahead of the implementation of Title III of the 2012 JOBS Act, which will clear the way for small-dollar equity crowdfunding. The implementation of that law is expected to super-charge the start-up world. Like JumpStartFund, the already extant Crowdfunder is focused on building businesses, not just the one off release of products.
What makes JumpStartFund so interesting, however, are those patents.
"There's all these patents in federal research labs," said CEO and co-founder Dirk Ahlborn of the site's parent company JumpStarter, in an interview last week.
"Like NASA, the Aerospace Corp, JPL. The Department of Energy, DARPA. But start-ups either don't know or it's really difficult for them to get to them. The U.S. spends 35 billion dollars in research and development every year, so a company like Aerospace gets a billon dollars a year only to do research and development."
A big part of the site's goal is connecting these patents with business-minded folks who can get the technology out of the research labs and into the hands of consumers. A kind of Match.com for scientists and venture capitalists.
Ahlborn points out that getting the technology into consumer hands is something the research labs have a duty to do.
"They have congressional mandates that those technologies have to be given out to the public, but unfortunately the mandate doesn't say how good they have to be in doing it."
How It Works
JumpStartFund looks to hook in entrepreneurs from the idea level. A would-be entrepreneur can come to the site with either an idea (which costs $10 to list) or an existing patent they control (no fee). From there the site focuses on building a team around the idea or patent.
Unlike, say, Kickstarter the point isn't to pump up the effort with cash, but to refine the idea and build a company around it. Members of the site who contribute to a project, either by voting or offering up idea, can earn "Advisory Points" which are leveraged against a company's earnings.
JumpStartFund makes it clear that these "Advisory Points" are not a security, but material rewards for crowdsourcing efforts. The site is preparing for the onset of equity crowdfunding, but this system allows for a way to compensate non-financial contributions as well.
As for the $10 fee for an idea? It's there to separate out the serious folks from your average Internet prankster. There are, after all, more amusing ways to spend $10 than trolling a crowdsourcing site.
Quality of the Crowd
The focus on collaboration means that JumpStartFund isn't looking for slackavist entrepreneurs. It's not enough to vote up an idea one year and then count on residual checks in perpetuity.
"We don't care about the "like" on Facebook," said Ahlborn. "We want an active crowd that really works and helps the company succeed."
Those who want to keep rewards flowing will have to re-qualify every year by taking an active role in the company's development. Luckily there are a wide range of options for crowdsourced participation, everything from hunting down prior art for patents and contributing refinements on ideas to taking on the role of co-founder of a company.
Ahlborn was particularly excited about the last prospect, and envisions multiple uses for patented technologies coming out of JumpStartFund. Instead of patent trolls locking down ideas, the site wants to encourage more open-source and shared ownership scenarios.
This is another differentiator between the new wave of crowdfunding and what has come before: an emphasis on the underlying technologies.
Seed of a Movement
Ahlborn calls himself a "serial entrepreneur". German born, he moved to Italy when he was 19 and proceeded to start companies focused on manufacturing. He emigrated to America to start his family, and found himself at the Girvan Institute of Technology, a non-profit, public benefit corporation founded by NASA in the last decade with the goal of commercializing technologies developed by government labs.
It was there he met, Paul J. Coleman, co-founder of JumpStarter and a veteran of NASA. It was at Girvan that the idea of using crowdfunding as a way of furthering the Institute's charter was born.
Ahlborn speaks of the work as a kind of calling.
"I kind of feel like I wasted a big chunk of my life because I worked on less important things."
There will be a lot of crowdfunding and crowdsourcing platforms popping up as the rules around Title III are set down. JumpStartFund's model, and it's deep ties to R&D labs, give it a strong shot at being one of the ones to make a big impact in the new Age of Entrepreneurs to come.
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