The New Generation of Crowdfunded Security Startups

Avatar
Brian Rhodes
•Published Sep 02, 2014 04:00 AM

New entrants to the security market are few and far between.

However, there is one area that is clearly driving new security startups - crowdfunding.

Crowdfunding has grown from a curiosity to a powerful global force raising billions for companies worldwide.

Indeed, IPVM analysis shows that over $10 million USD has been earned by security startups crowdfunding since 2013, leading to millions more in equity investments following on crowdfunding success.

Indeed, the majority of security startup crowdfunding campaigns have meet their revenue goals during this period, a remarkable accomplishment.

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Comments (7)
Avatar
Jonathan Lawry
•Sep 03, 2014
Trecerdo, LLC

In your first section:

Indeed, IPVM analysis shows that over $10 million USD has been earned by security startups crowdfunding since 2013, leading to millions more in equity investments following on crowdfunding success.

Indeed, the majority of security startup crowdfunding campaigns have meet their revenue goals during this period, a remarkable accomplishment.

...for those words in bold, you probably meant raised and fundraising. Your choice of words implies that they are actually making money, not merely raising it.

JH
John Honovich
•Sep 03, 2014
IPVM
In reply to Jonathan Lawry

They are not making money?

Brian and I talked about this word choice internally. I explicitly did not want to use the word 'raised' as it it typically used with regards to equity investments but with crowdfunding, participants get products (hopefully) but no equity.

Avatar
Jonathan Lawry
•Sep 03, 2014
Trecerdo, LLC
In reply to John Honovich

I'm not saying that some of them might be making money.

My point, specifically, is that EARNING and REVENUE usually means "money you bring in from selling product or services".

Is money raised from crowdsourcing really REVENUE? It's a blurry line, because investors tend to get a sample product, but many people have gone to jail for counting equity sales as revenue. So regarding the $10M....which is it? Revenue? or Capital raised?

JH
John Honovich
•Sep 03, 2014
IPVM
In reply to Jonathan Lawry

It ain't capital, that's for sure, simply because there is no connection to equity at all. On Kickstarter or Indiegogo, you get either a service or a product (whether it's $5 gets you a thank you note or $100 gets you a widget, etc.). You never get equity.

Here's excerpts from Kickstart's taxes FAQ:

"Project creators keep 100% ownership of their work. And Kickstarter cannot be used to offer financial returns or equity, or to solicit loans."

"In general, in the US, funds raised on Kickstarter are considered income."

RW
Rukmini Wilson
•Sep 03, 2014

From Forbes:

Money raised from crowdfunding isn’t a tax-free windfall. It’s not like winning the (UK*) lottery. It’s income, just like any other sales income...

Not capital, just income, though to use the term earned would require financials or at least a ballpark number for (often significant) expenses. Suggested compromise:

Indeed, IPVM analysis shows that over $10 million USD has been banked by security startups...

JB
Jeremiah Boughton
•Sep 03, 2014

Here is my Excel list I started last winter. I gave up because they started to come really

fast & the product was not really up to par for the things I bought

and tested. But as a Techie, you know that things never really

work out as great as they proclaim.

Words of Wisdom - Never trust the Video's on these types

of Tech sites or any tech website that utilizes Parallax Scrolling.

Product Desription URL Status
Cloogy A Few Things http://www.cloogy.com/ Selling
revolv Control www.revolv.com Selling
Canary Security http://canary.is/ Preorder
DropCam Security https://www.dropcam.com/ Selling
Vera Control http://getvera.com/ Selling
Wren V5 Sound Systems http://wrensound.com/ Selling
Belkin WeMo Electrical Outlet, Ligh Switch, Motion Detection http://www.belkin.com/us/Products/home-automation/c/wemo-home-automation/ Selling
Philips Hue Lighting https://www.meethue.com/en-US Selling
Nest Protect Smoke & CO Detector http://nest.com/smoke-co-alarm/life-with-nest-protect/ Selling
Plex Media Solution http://www.plexapp.com/ Free
XBMC Media Solution http://xbmc.org/ Free
Staples Connect Control http://www.staples.com/sbd/cre/marketing/staples-connect/ Free
Lockitron Door Lock https://lockitron.com/preorder Preorder
August Door Lock http://www.august.com/ Preorder
Goji Door Lock http://www.gojiaccess.com/ Selling
Kwikset kevo Door Lock http://www.kwikset.com/Kevo/default.aspx#.UpzhAcRDt8E Selling
uniKEY (Kevo) Door Lock http://www.unikey.com/ Selling
Goldee Lighting https://getgoldee.com/ Preorder
Lock8 Smart Bike Lock http://lock8.me/ Preorder
Iris (Lowes) A Few Things http://www.lowes.com/cd_What+Is+Iris_695688710_ Selling
LIFX Lighting http://lifx.co/ Selling
Smartbotics Lighting http://www.smartbotics.com/ Selling
Insteon A Few Things http://www.insteon.com/ Selling
EverSense Thermostat http://www.allure-energy.com/ Selling
Ube Lighting http://myube.co/ Selling
Evolve A Few Things http://www.evolvecontrols.com/solutions/automation-control/ Selling
Chromecast Media Solution http://www.google.com/intl/en/chrome/devices/chromecast/?gclid=CIyQyLurkrsCFcVFMgodnHwAuA Selling
SkyBell Video Doorbell http://www.skybell.com/product/skybell-device/ Selling
DoorBot Video Doorbell http://www.getdoorbot.com/ Selling
Nexia A Few Things http://www.nexiahome.com/nexiahome.aspx Selling
Valta Energy Management http://valta.com/ Selling
WigWag A Few Things http://www.wigwag.com/ Preorder
SmartThings A Few Things http://www.smartthings.com/ Selling
Enblink A Few Things http://www.enblink.com/ Selling
Korus Sound Systems http://www.korussound.com/ Selling
BlueBolt Energy Management https://www.mybluebolt.com/ Selling
EnerG A Few Things http://www.energhome.com/ Selling
Nymi Door Lock http://www.getnymi.com/ Preorder
Twine Monitor Appliances http://supermechanical.com/range/ Preorder
Anvil Motion Biometric and automated kitchen cabinets http://www.anvilmotion.com/ Selling
Plugaway Lighting http://www.plugaway.co/ Funding
JB
Jeremiah Boughton
•Sep 03, 2014

I almost forgot. I had a second tab called "??? Cool Tech" with one item.

Panono Ball 360 Photo Spheres Instantly http://www.panono.com/ballcamera/ Preorder