Crowdfunding website CrowdIt launched on June 4, marking what its Springfield-based creators hope is the start of a new era for a saturated market.
CrowdIt allows “Dreamers” to post project ideas to the site and “Believers” to pledge funds to projects they support, just as industry mainstays like KickStarter and Indiegogo do. But the new platform will enable its users to network with and receive advice from business professionals and service providers, who CrowdIt calls “Suits.”
When CrowdIt co-founders Jason Graf, Paul Freeman and Markus Pope began researching existing Web-based crowdfunding models in late 2011, they noticed that although sites provided entrepreneurs the tools for raising capital they didn’t offer any other services once money had been raised.
Graf knew the importance of guidance beyond the fundraising phase from his experience as a mentor for small businesses and aspiring entrepreneurs, so when the CrowdIt team wrote its business plan last summer, the plan called for a site with networking features and access to vital knowledge through Suits. Graf believes CrowdIt‘s additions make it a more complete offering than the competition.
“The number reason most businesses fail in the United States is not lack of capital; it’s lack of experience and expertise,” Graf said. “The incorporation of the third person in the site allows ‘Dreamers’ to network with professionals and gain the knowledge resources they’ll need to succeed after the money is raised.”
When Graf, Freeman and Pope pitched their plan to Springfield-based Baron VC in January, it was those wrinkles on the traditional crowdfunding model that convinced the venture capital firm to invest. Both CrowdIt and Baron declined to disclose the size of the investment.
“[The] crowdfunding space was already interesting to us,” Baron managing partner Guy C. Mace said, “and when you add to it that CrowdIt brings social and incubator components, that was pretty unique to us.”
To become a Suit on CrowdIt, someone either has to be verified by three existing Suits, provide proof of a secondary degree from an accredited institution or have a professional certification like a CPA. After verification, Suits can get in contact with Dreamers and invest, become mentors or offer professional services.
CrowdIt‘s collaboration and conversation functions won’t be fully rolled out until month’s end, but as of June 14 the site had 183 projects posted. Graf and company believe that’s just the beginning of a shift in the way crowdfunding is done.
“We view CrowdIt as a virtual incubator and a second-generation crowdfunding portal,” Graf said, “offering networking capabilites and the ability to engage in commerce right on the site.”