The Acorn Collective is creating a crowdfunding platform for everyone – advocating the idea that if you believe in an idea strongly enough, you should have the opportunity to make it happen.
It’s hard to believe that it’s been less than a decade since reward crowdfunding giants Kickstarter and Indiegogo hit the scene.
Since then the crowdfunding industry has grown exponentially, acting as the catalyst for tens of thousands of businesses worldwide to access funding and build their businesses. It has brought us creations such as the Pebble Smartwatch, the Fidget Cube, and Exploding Kittens to name a few. The current crowdfunding market is estimated at over $35 billion (Massolution 2015) with over 2,000 platforms globally.
In short – the concept of asking a lot of people for a small pledge for pre-determined rewards – has revolutionized the way that start-ups secure funding for many.
But that’s not the full story. Despite these shining light examples of what crowdfunding can achieve, there are still significant barriers to entry for many aspiring founders, so much so that a recent research study by ResearchandMarkets.com shows that there will be a decline in crowdfunding revenue of roughly 17% from 2017 to 2021.
Barriers to Entry
Crowdfunding is a competitive business, and the first hurdle is getting your project onto a platform in the first place. Most major reward crowdfunding platforms are equity backed, meaning that they rely solely on commissions for their sustainability and profitability. This means that they often select projects based on commercial appeal and existing community.
To run a campaign, founders require substantial seed capital for the development of a prototype, content, and marketing. It’s estimated that founders spend between $3,000 and $10,000 on marketing services alone, once again, cutting out a huge proportion of founders. Perhaps surprisingly, a 2016/17 Crowdfunding Center study found that only 1.9% of crowdfunding revenue reaches developing countries, despite SMEs making up over 90% of a business.
Finally, for those fortunate enough to be listed, failure rates are high. In fact, the same study discovered that a staggering 78% of campaigns fail to reach their raise target. Despite not raising their target, they still need to pay between 5-10% of fees to the platform in question, taking a considerable amount away from the final rise. The reason for this is often poor marketing reach, and not communicating their project effectively.
Planting the Seed with the Acorn Collective
The Acorn Collective is building a platform that will tackle these major crowdfunding pain points in three words – access, success, and transparency.
Access – As a blockchain-based platform, it will give a fair chance to everyone. Since there are no vested interests, Acorn will allow anyone to market their ideas to backers for free, as long as the project is legal and ethical. Integrated project milestones will allow founders to release funds from their raise before it has ended, removing the need for hefty seed capital, and instantly increasing accessibility.
Success – Failure rates in crowdfunding can be lowered by supporting founders with a data-backed toolkit and targeted APIs to help them create content, market their campaign effectively, and reach their optimum audience. Once a founder has completed their campaign, they will immediately be able to use the Acorn marketplace to sell their product.
Transparency – Because the platform is based on the blockchain, an unparalleled level of transparency and trust in crowdfunding can be achieved. All transactions on the platform and marketplace use an ERC20 standard, Ethereum-based token called OAK. This means that every single transaction on the marketplace is traceable and open, meaning that backers can see how their founders are spending their funds, and are more likely to support projects with a history of meeting their commitments.
By using blockchain to tackle three of the major current issues in crowdfunding, The Acorn Collective hope to revolutionize access to funding for start-ups and entrepreneurs globally.
The ICO will begin on 26th May, 2018 and will last until 24th June, 2018. OAK will be available in the event for USD 1.40 per OAK with 25,000,000 OAK available for purchase.