- The Process
- The Basics
- The Deal With Creators
- Platform Fees
- Intellectual Property Protection
HOW IT WORKS
You have a great idea for a project and seek for funding? You are at the right place! Take a look at our Requirements & Guidelines and get started!
You're probably here either because your friend started a new project and asked for your support, or you want to discover and be part of the next big thing at the time when it’s bein born. Welcome!
Perks, equity or both!
StartersFund is the only platform in the world that allows you to promise to your funders perks, equity over the company that will materialise the Idea, or both! If you plan to give out equity read here first Equity-Based projects.
Build your profile
Your identity matters. Fill in your public profile with information so Creators know who you are and can get in touch with you for advice or collaboration opportunities.
Make a winning pitch
Browse, ask, find, support
Discover and select ideas that you like, communicate with the Creators, "google" them, ask them, "like" them, share with friends and ask what they think. You are the one to decide who wins!
Promote your idea
Don't just wait for your idea to reach it's funding target. Promote it with your friends, tell people, push it using our social media tools. Your idea is worth it!
Fund the right Idea!
When you feel that you know enough, get to financially support the Idea that you like the most. Let the most innovative Creators know that they have your support!
KYC & Due Diligence
According to the law, we need to know who you are and how to find you before we sign the contract and release the funds. Learn more on what documentation you will be asked to provide here Risk Management Policy..
Congratulations! Everything is found in place, so you get the funds. One more step, and you're done!
Give rewards to funders
One more thing and you're done: deliver what you promised and keep on making your dreams come true!
Tell us how they did!
Crowdfunding is based on trust and trust means keeping the promises. You will be asked how consistent the Creator was and we will tell everybody!
StartersFund Platform Basics
Crowdfunding is the very old practice of collecting funds from the public for an openly disclosed purpose.
The three most common web-based Crowdfunding models are Equity-Based Crowdfunding (exclusively business oriented), when the return that the Crowdfunding campaign initiator gives to the financial backers for the funds they provide is equity over the company that will materialize a business oriented project, and Reward-Based / Donation-Based Crowdfunding, when the return may be anything else - or even nothing at all, in the latter case.
StartersFund is the only platform in the world that allows you to combine all three models in the same campaign!
However, Equity-Based Crowdfunding is a highly regulated activity in most countries, so there are certain restrictions, terms and conditions you need to understand, agree upon and consider of before offering shares through StartersFund. Read more here Equity-Based campaigns
Regarding Reward-Based / Donation-Based Crowdfunding, what you read in How It Works section is pretty much everything
User, Creator, Funder
All registered users are treated the same way (there is actually only one type of registered user in the system, the "user"). However, in order to easily understand one’s role at any given time, the users are characterized either as "Creators" or "Funders".
“Creators” create and publish Ideas. In cases of team projects, the project initiator is the first “Creator” who engages every other team member.
“Funders” financially back the Ideas.
Every user may become a Creator or a Funder at any given time. Currently, only natural persons may be registered as users (but that is expected to change soon so as to include legal entities as well).
Idea, preparation & listing
“Ideas” are either innovative business ideas or other creative projects with some degree of innovation.
Almost any idea for a legitimate business is suitable to be listed in StartersFund, as well as Research and Development projects, works of Art, event productions etc.
Everybody (not only registered users, absolutely everyone) can view a listed Idea, but only (registered) users can fund the Ideas, while only users of certain countries may view the Equity-Based part of Ideas (learn more here Equity-Based campaigns)
The platform guides Creators to prepare Idea presentations in a way that is professional, inclusive and, at the same time, concise.
“Listing” means that, after you’re done with preparing the Idea, you click the “Publish” button and it becomes openly visible to the public.
The rule is that, the best you describe the Idea (by filling-in all fields while preparing it), the most chances you have to get funded.
However, it’s up to every Creator to decide the wideness and depth of information to be provided to the prospective Funders. The few compulsory fields are clearly indicated in the “Idea Editor”.
Last update: 09-11-2012, 11:41:58 GMT
Please make sure that you understand and agree on all the following:
- StartersFund does not list Ideas and does not accept payments from residents of Iran, North Korea, Cuba, Bolivia, Ethiopia, Myanmar, Nigeria, Sao Tome & Principe, Sri Lanka, Algeria, Libya, Sudan or Syria.
- StartersFund applies a strict Fair Usage Policy Fair Use Policy that all users are required to respect.
- Until further notice, StartersFund does not list Ideas regarding projects of companies listed in any Stock Exchange.
- Sex oriented Ideas, material, services and rewards are banned, regardless of whether they may be considered legal or not.
- StartersFund retains the right to deny for listing, ban or cease any crowdfunding campaign that is found, at StartersFund's unquestionable discretion, or reported to be, unethical, misleading, fraudulent or wrongdoing, and take any other action it thinks appropriate.
- StartersFund retains the right to ban or cease the account of any user who is found, at StartersFund's unquestionable discretion, or reported to be, acting in a fraudulent, unethical or insulting to other users manner, and take any other action it thinks appropriate against such behaviours.
- Creators to be reported, either by other StartersFund users or even users of other crowdfunding sites, to have performed even one successful crowdfunding campaign and have not delivered the returns expected by the funders, will be blacklisted and will not be able to use StartersFund. Listing and Idea in StartersFund means that the Creator strongly agrees his/her after-funding performance, whether good or not, to be publicly announced on StartersFund.
- Equity-Based campaign initiators are typically required to hold a licensed Prospectus and/or have registered the offering securities with the Capital and Exchanges Commission, or other competent regulatory body, of the Funders' country of residence, and to meet several other criteria before being listed (exemptions apply depending on the jurisdiction of each Funder). StartersFund will either not list or not present to residents of certain countries any such campaign until all applicable criteria are met.
- The Creator is bound by StartersFund Terms of Service Terms Of Service
If you don't understand some or any of the references to Equity-Based Crowdfunding, you need to consult our Knowledge Base first by clicking here
In case you already hold a public securities offering license from the competent regulatory body of an European Union (EU) member country, you are strongly recommended to contact us before uploading your Idea on StartersFund.
Before listing an Idea, Creators will be asked to also confirm that:
- They have applied for all required patents OR they state that the Idea is not patentable OR they state that they do not wish to patent the Idea before listing it to StartersFund.
- The Idea is not a "fund my life" project. Note: Examples of not acceptable projects include projects to pay tuition or bills, go on vacation, buy new equipment not related with a certain business or art project etc.
- The Idea does not include charity or cause funding. Note: Examples of not acceptable projects include raising funds for the WWF, fundraising for a political campaign, funding an awareness campaign, funding a scholarship, promising to give away a part of funds raised through StartersFund to a charity or cause. Separate services for Charities and political campaigns will be introduced in the near future.
- They will offer rewards to Funders, even of moral value only (i.e. of zero or negligent monetary value). Note: There can be no campaigns with absolutely no returns to Funders.
Before any transaction, users will be asked to confirm that:
- I am 18 years of age or older.
- I have a major credit or debit card or a bank account.
- They speak, read and write in the platform's native language - English. Note: Successful communication between users is the key to success; therefore all users must ensure that they are able to communicate in the platform native language, unless they wish their Ideas to appear only on localized versions of StartersFund, depending on the Creator's language.
In certain cases, users should expect to be asked and agree to provide proof of ID and other documentation required by the law, as described in StartersFund Fair Use Policy Fair Use Policy
Last update: 09-11-2012, 12:05:10 GMT
Choose rewards-based funding type when you pan on creating a short-term project or one-off event, or when you are producing something that is limited in quantity
Here are some good examples of when you could give away perks to your supporters:
- Movie project
Give away copies of the movie, dvd's, merchandise, inclusion in movie credits.
- Board game project
Give away finished copies of the board game, credits in rulebook, website and newsletter mentions.
- Book project
Give away signed copies of the book.
- Software application
Give away copies of your software, coupon codes, include supporters in app's credits.
Choose equity-based funding ONLY when you plan on creating a new limited by shares liability company that will operate for more than 2 years specifically for the purpose of running your idea project. If you have an existing such company and seek for funds in order to materialise a new idea through that company, please contact us
Some good examples of when you could offer Equity to your supporters:
Examples: new hardware product development
- Retail business
Examples: advertising agency, Software-As-A-Service company
- Development projects
Examples: solar power plant, ecolocical housing project
|Minimum Funding Target||5,000€||50,000€|
|Maximum Funding Target||45,000€||150,000€|
|Funding Cap||NO||25% not included (150,000€ + 25% = 187,500€)|
|"All or nothing" funding||YES||YES|
|"As much as you get" funding *||YES||YES|
|Fall-back option *||YES||YES|
|Minimum contribution per supporter||1 Vote||100 Votes|
|Maximum contribution per supporter||100% of Target||100% of Target|
|Company formation and supervision by StartersFund accredited partners||Optional||YES|
|Shares issuance and distribution by StartersFund accredited partners||NO||YES|
|Equity give-out promise to supporters||NO||YES|
|Non-financial returns’ promise to supporters||YES||Optional|
|Posting of supporters’ feedback (after funding)||YES||YES|
|Open idea publishing||YES||YES|
|Creative businesses (existing SMEs)||YES||Contact us|
|Minimum equity give-out||-||1%|
|Maximum equity give-out||-||49%|
|Type of receiver of funds||"As is" (individual, team of individuals, company etc.)||Limited by shares liability company or equivalent (S.A., A.G., L.L.C. etc.), depending on the jurisdiction|
|Fundraising period||1-6 months||1-6 months|
|Company Support & Monitoring||-||24 months|
|Business Planning Support by StartersFund accredited partners||Optional||YES|
|Intellectual Property Protection Support (after funding) by StartersFund accredited partners||Optional||YES|
|Trade Mark Registration Support (after funding) by StartersFund accredited partners||Optional||YES|
|Legal Support (after funding) by StartersFund accredited partners||Optional||YES|
|Accounting and Bookkeeping (after funding) by StartersFund accredited partners||Optional||YES|
|Virtual Office (after funding) by StartersFund accredited partners||Optional||YES|
|Subscription to consulting web services||Optional||Optional|
|Subscription to other partnering services||Optional||Optional|
|Discount on all partnering services||YES||YES|
|Interim Reports||-||3rd, 6th, 12th, 18th, 24th month from company formation|
|Company Valuation by StartersFund accredited partners||NO||Optional, after 24months|
|StartersFund commission over funds released||0%||0%|
(*) Fall-back option: supporters are asked if they wish to support the idea even if it does not make it to the target
Privileges of successful creators:
In the Equity-Based service, a successful creator, meaning a creator who got all the votes needed in order to get funded, and provided that he/she passes successfully the customer screening process, enters immediately the Virtual Business Incubator of startersfund.com: gets a Business Plan review by accredited management consultants and a legal team prepares the company statutes for the preferred Company jurisdiction and all standard legal forms the Company will need throughout its early stages (e.g. terms of sales or MOUs, employment contracts etc), a firm of Chartered Accountants will undertake company bookkeeping and prepare all Tax forms and another firm will undertake external auditing. The Company is registered, the capital is deposited to a Special Reserve account of the Company and the shares are issued and delivered to the claiming supporters, all through the supporting infrastructure of startersfund.com. Each new company is being supported by the VBI for a period of two years after registration. But even if the creator wishes to employ professionals of his/her own choice, it’s fine with us: he/she may appoint the preferred lawyers, accountants, management consultants or other experts, a case upon which only the external auditors and the management consultant who will do the first review of the business plan have to be approved / accredited by StartersFund. In any case, the creator has access to all the above-mentioned VBI resources for a period of two years, as well as discounts in many other supporting services.
Privileges of successful supporters:
Once successful, a supporter enters a world of opportunities and investing challenges. At first, he/she gets a private share offering from the creator he/she supported for an amountr of shares equal to the votes the supporter gave. The supporter may reject the offer in the course of two weeks, otherwise the shares are issued on the supporter's name. The terms of shares offering (number and price of shares offered etc.) are pre-known since the day of voting and never change. All successful supporters who reject the offering for the shares they are primarily entitled to, have the option to acquire equal number of other similarily uncalled shares, with the same terms and conditions. On top of that, successful supporters receive honours (badges), exposure, discounts and other privileges. Successful supporters also receive all other (non-financial) returns the creators promise, like end-products and services, discounts, honourable mentions etc.
Funding Fees & charges
At the moment, StartersFund only operates with “SF Credits”, i.e. a user must acquire virtual units called “SF Credits” in order to make any transaction within the platform (e.g. to fund a project, pay for a service etc). This system is much more flexible and cost effective for the user than any other to the day (if you wish to find our more why we prefer the credit system, please read here)
It is in our plans, though, to also enable very soon direct transfers to escrow accounts, like the rest of the crowdfunding sites do, so as to give our users all available options and leave you to decide what suits you best.
We DON’T take anything from the amount a Creator will get at the end of the fundraising process, or impose any other fees whatsoever.
Of course, there are also third party costs associated with every transaction that altogether amount another 5.5-6.5%, depending on the total transaction amount.
|1,000 SF Credits worth||StartersFund Fees||Third party Fees & charges||Percentage %|
|1,000 €||50 €||4.76% of Sum 1|
|8.50 € VAT||17.00% upon SF Fees|
|7.13 € Payment processing fee||4.50% of Sum 2|
|0.20 € Transaction fee|
|0.20 € Authorisation fee|
|1,000 € Worth SF Credits in your e-wallet||50 € (4.69%) StartersFund fees||16.03 € (6.19%) Third party fees & charges|
Listing fees & charges
As a method for project filtering, StartersFund requires a Creator to acquire 100 non refundable SF Credits before their project is listed. Those SF Credits may be used to fund the Creator’s own Idea, other Ideas or, even better, to be used for acquiring specialised consulting from partnering crowdfunding specialists on how to prepare a perfect pitch!
Except the ones mentioned above, ALL SF CREDITS ARE FULLY AND FREELY REFUNDABLE at any time, provided that they are not “locked” with a certain Idea. “Locking” means that the SF Credits were used in order to support an Idea and the fundraising period for that Idea still runs. In case of campaign success, locked SF Credits are liquidated and that money is used to fund the Idea, otherwise they automatically return back to the Funder’s e-wallet at NO extra cost.
StartersFund charges nothing for a refund. However there is a cost of 2.20 € per transaction imposed by the payment processor (e.g. the user who refunds 1,000 SF Credits will actually get back 997.80 €).
The unused SF Credits are automatically refunded back to the payment method used when acquired (e.g. VISA, MasterCard etc) 12 full months after the last time they we used, with the same cost of 2.20 €.
Last update: 09-11-2012, 12:11:05 GMT
Intellectual Property Protection
All creators must have in mind that startersfund.com offers NO GUARANTEE whatsoever for the protection of their Intellectual Property (IP), but only advice and tools for making the right decisions. Before uploading an idea, every creator must have in mind that ideas (in general) are not protected by the law; only certain implementations of the ideas are protected, and that under certain criteria and for a given period of time.
In that sense, for every creator non-experienced with IP issues, following the methodology described below is strongly advisable:
1. Search, search, search. Don’t waste time on something that has already been patented or implemented by someone else. Try searching through World Intellectual Property Organisation, USPTO for the US or the European Patent Office. If it’s not there, then you are probably right to give it a try. Chances are that you have something truly unique in your mind (…or something that is not patentable), so proceed to next question.
2. Ask yourself: is my idea patentable? If the answer is yes or don’t know, appoint an IP lawyer before exposing it to the world (startersfund.com will soon have a list of experienced international IP lawyers for you to employ, offering advice on reasonable fees). If the answer is I don’t have the money for that, you have two options: to try and crowdfund the IP protection process only (at first), or proceed to next question. In any case, write the idea down and submit it to a notary – it always helps at least to have the copyright confirmed.
3. Ask yourself: Can I expose my idea in a way to make it attractive, yet not exposing the most important secrets of implementing it (the "trade secrets")? If the answer is yes, you don’t really need an IP lawyer. Just keep the trade secrets well behind the curtains, discuss them only with your closest partners and trusted people and upload to startersfund.com everything else. Provided that your idea is good, experienced investors will still love you (and if you indeed are holding a Trade Secret, they will love you even more). Think of iPhone: it was not the first smartphone ever presented to the world. However, only Apple knew how to make it that attractive. Anyway, if the answer is again no, proceed to next question.
4. So, it appears that you have a really revolutionary business idea but cannot find a way to protect it. In that case, the only question left is whether you are more willing to risk losing it because of exposure to startersfund.com, or to let it die silently, waiting for the day you get the funds, somehow… Also, there is always the chance that somebody else thinks of the same idea (they say that every truly unique business idea has been conceived by at least 50 different people around the world at about the same time) and finds a way to implement it before you do. Yes, you have a decision to make and it’s a hard one. But here’s a tip: if you have the time and the manpower, try to implement as much as possible of the idea before exposing it to the world. In that case, you will be several months ahead of everyone else who may think of stealing the idea, and at the same time, showing a certain degree of implementation discourages potential stealers.
Last update: 09-11-2012, 12:16:29 GMT
The Deal With Creators
In simple terms, the deal between us and every creator is this: As a creator, you have two options (two plans to choose from); to promise giving out equity for the funds you ask, or not.
You may ask for 5,000 – 45,000 € in the first case (no equity given), and 50,000 – 150,000 € plus a cap of 25% in the second (please see below about "the cap". Equity to be given to the crowdfunding investors may be 1%-49%, by your choice. It is also inevitable in the first case and advisable in the second, to give out value items of no financial nature (e.g. end products and services, discounts etc.) as return for the funds asked.
In the first case we're almost done with you when the funding campaign expires (after that, we only post your supporters' feedback on keeping your promises, in case you were funded).
In the second case (Equity-Based) our accredited partners undertake, on your behalf, all bureaucracy down to the point that your supporters get their shares, while at the same time you must prepare a full Business Plan (with the help of acrredited consultants). Once the Business Plan is ready and validated by the accredited consultants, we deposit the funds to a Company account (the "Special Reserve" account) and, from that point on, you have to stick with it for 2 years. At the same time, we actively support your business through the VBI and your crowdfunding investors appoint a Board Member (from the list of our accredited auditors) to gradually release the funds acquired through startersfund.com, according to the Business Plan. A renowned firm may valuate the Company at the end of this period should your investors ask for it (and your Company can actually pay for that), so as everybody to know what the end value of the shares they acquired is.
Last but important, to publish an idea you pay with an amount of credits, depending on the funds you ask (please see platform fees).
You may switch between the plans (Donation-Based / Equity-Based) as many times as you like BEFORE you publish the idea. After that, you are bound with the plan you chose.
The cap of 25%: In the case of Equity-Based crowdfunding, the funds you require (the "asked capital") is not the funding target of your campaign: we want you to calculate only the capital you actually need for the core of your business, leaving out all fees for professional services (legal, accounting, auditing, evaluation etc.) – unless the project is ‘professional-services-intensive', if we may use that wording. A cap of 25% is automatically added to the asked capital, in order to provide adequate fees availability for those services. So, if you need 100,000 € in order to bring the idea to life and run for 2 years the Company that will exploit it, an amount of 25,000 € is added automatically from the system, and that's the funding target (funding target = asked capital X 1.25). A simple algorithm expresses everything in credits and votes. So, when building the project presentation, just focus on how much money you need to do the real job – nothing else.
IMPORTANT NOTICE 1: In case you are funded, all the capital (asked + cap) belongs to the Company that will materialise the idea (your Company), so it's practically yours. However, the cap money is reserved for third party professional services and the remains (if any) are released for other purposes only after the expiration of the 2 years period.
IMPORTANT NOTICE 2: You always get 100% of the funds you asked (asked + cap), e.g. for a successful campaign with asked capital of 100,000 €, you get a deposit of 125,000 € in the Company account. We don't keep fees or commissions out of your Company's funding (don't forget, we make our money by issuing SF credits and charging listing fees).
IMPORTANT NOTICE 3: You are strongly advised to read carefully "the deal with supporters".
Last update: 09-11-2012, 12:08:49 GMT
The deal with supporters
We really value your money. And we also want the crowdfunding process, at least at the supporter's side, to be as easy as 1-2-3. That's why, instead of building a simple Do-It-Yourself system, like everybody else in the crowdfunding market does to the day, we created a sophisticated framework with all the overhead on our side. So, the deal is this:
In case you want to support an Equity-Based idea project, you know from the very beginning (before you vote) how those votes will reward you, in case the idea gets funded. Everything is in the idea presentation page. That is, if you give 10 votes to an idea, you know that, once the idea gets funded, you will get a privileged private offer from the creator (through email), offering 10 shares with nominal price of 1 Euro (1.00€). This privileged offer expires 2 weeks after email dispatch. Unless you specifically reject the offer by replying to the email, (i.e. in case you do nothing), those 10 shares will come to your doorstep – or electronically, depending on the legal framework of the jurisdiction where the company is registered. That's it.
But, even in case you reject the shares offered, you still don't lose; there is a special space for all supporters just like you, where the un-claimed shares of all companies that got funded are listed and remain available at first call for an additional period of 2 weeks at no extra cost. After that, of course, the company captables have to close and the shares to be issued, so your right to acquire the shares will be considered as having been donated to the creator(s). Please note that we cannot refund that right for many obvious reasons, the two most important being that such a policy would undermine the whole crowdfunding system's integrity and efficiency, and that the right embodied in the respective SF Credits was fully exploited.
Our Risk Management Policy (download) requires the creator to successfully pass client screening process before releasing the funds. If a creator fails this process, the votes return to you at no cost. Also, as an investor (that you are indeed after accepting the shares offer), YOU and you only appoint – together with all other shareholders just like you – the Board's member that is responsible for releasing the funds collected through startersfund.com. You also get interim reports (as a shareholder), become part of the company's internal support community and many other things that value your position as a shareholder, no matter how many shares you own.