Crowdfunding is the process of raising money from a large number of people in order to fund a project, a company, or a cause. ArtistShare is one of the many crowdfunding platforms that exist.

U.S. based, ArtistShare was founded in 2001, and launched in 2003 . It’s widely recognized as the Internet’s first “fan-funding” platform which later became the blueprint for many of today’s crowdfunding websites such as KickStarter, IndieGoGo and PledgeMusic. ArtistShare connects artists with fans in order to share the beauty of the creative process and ensure the creation of new artistic works. ArtistShare is about “experience” as opposed to just “product.” The company’s goal is to put the “art” back into the word artist. Their patented process allows fans to experience an artist’s creative process from its conception to its fruition. The company provides a solid platform and award-winning professional services for the entrepreneurial artist. More information on this unique platform can be found below:

Reference:

About us. (n.d.). Retrieved April 07, 2021, from https://www.artistshare.com/about

As I near the end of the ENT program, I can’t help but reflect on the journey and the wealth of knowledge I have obtained along the way. I figured the best place to start would be reflecting on my first blog post which kicked off the process. On June 28, 2019 I wrote,

“Art has proven to be therapeutic and in ways lifesaving, for this reason I would like to create an opportunity where others can experience the powerful force of art… I intend to use this graduate experience and my life experiences to spark change and positively impact others. Much like color hues, the opportunities are endless…This truly is just the beginning!”.

This sentiment rings even more true now! So much so that the initial venture used as my focal point for the program changed. As I mentioned in at the previous portion of the same blog post, I was at a point where I had virtually lost my spark and joy for the arts. The ENT program helped reignite that passion! Although my venture is still underway, I feel like I can see it and touch it. The research and effort put into creating my business makes it feel alive. I feel as though I have been painting a masterpiece on a new form of canvas.  Not only was I able to learn form the experience, I’ve been able to share some of the information learned and research method with friends that are working on their own venture. Similarly, witnessing the growth of my peers and seeing their ventures grow has been just as exciting. I have been able to network and learn from my peers within the learning community. This knowledge has been just as enlightening and helpful as the things I learned from the course assignments. Although I will miss the experience, I am excited to launch out with my business plan and utilize what I’ve gained from the course!

There is over $300 billion in total assets connected to over 800 certified CDFIs in the United States (Cortese, 2011). CDFI, or Community Development Financial Institutions, are often times identified as community banks, credit unions, loan funds, or venture capital funds, but they must be certified by the Treasury Department as such (Cortese, 2011). Community development loan funds get the bulk of their funding from low-interest loans or grants from banks. Additionally, they allow individuals to invest for a fixed rate of return.

If one is considering this method, they should review the pros and cons associated with it. Community loan funds pay investors a fixed return. Although returns are modest, the risks are low. Similar to a CD, you can secure better interest rates with a longer-term loan. Funding is not limited to individual loan funds, investors can also put money in Community Investment Notes, which in turn is invested in CDFISs. Contrastingly, nonbank community loan funds are not FDIC insured. Furthermore, many CDFIs loan funds can be difficult to find as they are not heavily promoted.

Reference:

Cortese, A. (2011). Locavesting: The revolution in local investing and how to profit from it. Hoboken, NJ: J. Wiley & Sons.

Credit unions and community banks are essentially all that remains in the archaic relationship-based banking system that once ruled. These entities are small, locally owned, and rooted in their communities. They offer services to local businesses, so the money deposited with these banks are more likely to support the local economy. Unfortunately, community banks are being threatened by increasing consolidation in the banking sector and disproportionately higher capital and regulatory costs (Cortese, 2011).

There are pros and cons associated with this format. Using community banks is a low risk way to support one’s community. These banks offer a range of financial products and services, including savings and credit cards. Credit Union and other locally owned institutions tend to offer lower fees and higher interest rates on checking and savings accounts compared to larger banks. Most importantly, by doing business with locally owned banks you are investing in your community all while saving money. Cons associated with this form of banking include limited ATM networks, less (or no) access to cheap capital that big banks have and having to double check the financial health of the bank before switching to them (Cortese, 2011).

Reference:

Cortese, A. (2011). Locavesting: The revolution in local investing and how to profit from it. Hoboken, NJ: J. Wiley & Sons.

ENT655- Proper Planning

Throughout this course, and others in the ENT program, there has been much emphasis placed on funding. It is after all essential for a venture to succeed and grow. Without funding it can be difficult to have steady inventory, to properly go through the product development process, or even hire employees upon expansion. As such, it is imperative to ensure that entrepreneurs do their due diligence in searching for various channels of funding. This requires having a well written business proposal.   This ensures that potential investors can have a clear understanding of the business to help determine if they want to invest.

Another beneficial tool to help with the process is having an elevator pitch or even an executive summary prepared. Elevator pitches can be used to give a quick overview of the product or service offerings to investors. This tool can also be used on crowdfunding sites and other places in efforts to garner funding. Similar to an elevator pitch, the executive summary should spark interest in ones venture by explaining the potential opportunity for investor in financial terms ; the value proposition ; a description of the market ones product or service will be sold into; how one will grow their business and how one intends to harvest their company (Lahm, D., & Lockwood, D). Each of these components should be reviewed and updated periodically or as often as needed.

Reference:

Lahm, D., & Lockwood, D. (n.d.). Executive Summary Assignment (E). ENT 655 Executive Summary Instruction V1.0.

The Small Business Administration (SBA) defines a small business as a concern that is “organized for profit; has a place of business in the United States; makes a significant contribution to the U.S. economy through payment of taxes or use of American products; materials or labor; is independently owned and operated; is not dominant in its field, on a national basis; and is no larger than SBA’s small business size standard for its industry” (Cortese, 2011). As such, the definition of a small business can be somewhat loosely interpreted. The size cutoff for a small business is typically 500 employees. However, Headcount used when counting personnel can be misleading. A threshold by industry was used as an additional measure by the SBA to determine business qualifications. For example, agriculture can be less than $750,000 and construction can be less than $33.5 million. For nonmanufacturing industries, the standard is typically less than $7 million in average annual receipts (Cortese, 2011).

Due to the possible variances that could arise surrounding the specifics of a small business, small business owners often times find themselves as the pawn in policy debates (Cortese, 2011). An example of this includes the Bush tax cuts of 2010. In essence, it all boils down to the business structure. This can determine elements such as corporate taxes.

Reference:

Cortese, A. (2011). Locavesting: The revolution in local investing and how to profit from it. Hoboken, NJ: J. Wiley & Sons.

Throughout the book, Cortese discusses alternative forms of investing. He titles this ideal locavesting. Locavesting is a recognition of the vital role that community- rotted businesses of all kinds play in our local economies (Cortese, 2011). These smaller stores, such as mom-and-pop shops, create large economic and social value for their communities. Benefits of smaller stores include creating more jobs, a healthy tax base, increase in charitable giving, civic engagement, improving the quality of life, and an appreciation for the sense of belonging they foster (Cortese, 2011).

Lovecasting attempts to restore a sense of connection to financial transactions, and to broaden the concept of  (mutually beneficial) “return” (Cortese, 2011). The author emphasizes that local investing is not meant to replace the current global financial system, but rather to complement it. As noted in the reading, “Ultimately, unless we have really strong local economies, we’re not going to have a functioning global economy” (Cortese, 2011).

There are many benefits to locavesting. Local companies have a connection with the communities they serve.  Local companies are profitable as they tend to serve smaller, geographic, areas. Additionally, local companies present less of a risk and can even be an asset to investors as they can help diversify their portfolio.

Reference:

Cortese, A. (2011). Locavesting: The revolution in local investing and how to profit from it. Hoboken, NJ: J. Wiley & Sons.

Security regulations have evolved in a manner that stifles local investment. Similarly, the financial industry dominates the economy in a non-positive way (Cortese, 2011). Various laws passed by Congress such as The Securities Act of 1933, the ’34 Act, and 1982’s Regulation D. helped categories things in the investing world. Namely, if a person had a net worth of $1 million or more (or at least $200,000 of annual income) they would be in the top two percent of Americans and could invest in virtually anything they’d like (Cortese, 2011).  The remaining, which is virtually the majority of Americans, who don’t meet the previously set standard were allowed to buy publicly traded stocks, bonds, and mutual funds but in essence were restricted from a wide range of investment opportunities as they were deemed to risky (Cortese, 2011).

Although this categorization still stands today, the SEC has made exemptions in attempts to make it easier for small companies to raise money from the public. However, the numerous regulations in place still create some difficulties. As such,  companies should read up on the regulations and exemptions and ensure they are operating within compliance at all times. Having someone well versed in the ins and outs of occurrences in the investment word or a legal representative would be beneficial for small businesses.  

Reference:

Cortese, A. (2011). Locavesting: The revolution in local investing and how to profit from it. Hoboken, NJ: J. Wiley & Sons.

As highlighted in the reading, a quote from the 1980 White House Small Business summit told the New York Times: “Our problem is small business has always been a ‘motherhood’ issue- everybody is for it, but everybody ignores it” (Cortese, 2011). This has been an ongoing problem in the business world. Many investors are willing to fund larger more established companies , rather than upcoming businesses. Even with the ever-increasing movement to “buy local” there is still a gap in funding and resources for smaller businesses.

For smaller ventures, a lack of the appropriate amount of capital has somewhat of a domino effect. Little, or no, capital leads to: undeveloped products, business being stifled because expansion can’t take place as needed, inability to hire as needed, and most importantly a decline in innovation. Lack of capital is a major contributor to the reason why half of new businesses don’t last longer than five years. Many ventures have tried to rely on traditional methods such as credit cards, personal savings, and wealthy relatives to garner early funding.  However, financial crisis’s or unforeseen circumstances such as the recent COVID-19 pandemic have made things more difficult.

It’s ironic to think that some of the most successful companies were established in tough times themselves. Recessionary environments have birthed companies from thr likes of MTV to FedEx (Cortese,2011). Although things were different at the time, this truth makes one wonder about the many potential great companies that never get a chance to reach their full potential as a result of lack of funds (Cortese, 2011).

Reference:

Cortese, A. (2011). Locavesting: The revolution in local investing and how to profit from it. Hoboken, NJ: J. Wiley & Sons.