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Pre-Seed Money via Crowdfunding: A Conversation with Rock The Post’s Alejandro Cremades

Posted on Friday, Oct 12th 2012

Today we are talking with Alejandro Cremades, the founder & CEO of Rock The Post, a crowdfunding platform for entrepreneurs and small businesses. Prior to Rock The Post, he worked as an attorney at King & Spalding in New York. During this time, he was involved in one of the biggest investment arbitration cases in history, Chevron v. Ecuador. He also provided advice on other complex international arbitration cases before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) and under the UNCITRAL rules, as well as international commercial arbitration under ICC, AAA and SCC rules.

Cremades has a law degree from Universidad San Pablo-CEU (Spain) and a master’s in international business & trade law from Fordham Law School.

Sramana: Alejandro, welcome. To begin, what is your offering in the domain of crowd funding to fund startup ventures?

Alejandro: Rock The Post is the grassroots crowdfunding platform for small businesses and early stage, innovative entrepreneurs. Our community invites entrepreneurs with unique ventures to get funding and exposure through a network of like- minded individuals. We foster a fertile culture of innovators, and together we are working to create an environment to develop projects that foster change through conscious consumption.

Sramana: Are you a for-profit or a nonprofit? What is your business model?

Alejandro: Rock The Post operates for profit. A 5% revenue fee is taken when a project is successfully funded. That being said, we set 1% of every 5% aside to donate to an entrepreneurial charity or foundation.

Sramana: How do your investors fund businesses? Through donation, equity or debt?

Alejandro: At Rock The Post, ventures are crowdfunded through pledges from the entrepreneur’s first, second, and third degree connections, as well as general users of the community. The platform operates on a reward-based model where people receive rewards or gifts from the project creator in exchange of the contributions.

At the moment, equity crowdfunding is illegal and against the guidelines of the Securities and Exchange Commission (SEC). However, once the framework of the JOBS Act is finalized and implemented, it may be possible for the general community to invest money in an early-stage non-public venture in exchange for equity.

Sramana: Can you describe the psychology of your investor community? Why are they participating in this sort of funding exercise? What are they looking for?

Alejandro: There is a certain psychology to crowdfunding, and we have found that communities tend to contribute to ventures for two reasons. First, they are getting something in return for their pledge.  Second, they relate personally to the message and content of the venture.

Rock The Post operates as a rewards-based crowdfunding platform, and this provides incentives for both entrepreneurs and the community. The entrepreneur states the rewards that his or her venture will offer, and users are given these respective rewards in exchange for their investment.

Rock The Post is also passionate about working with entrepreneurs and ventures that aim to make a difference. This has had an effect on the activeness of the community as well, and it can be seen in current projects on the site such as “Humanizing the Middle East” and “IntoxBox,” among many others. These entrepreneurs were launched into business because of a personal event in their lives that inspired an idea.

This passion is seen by the community, and in turn leads to collaboration between the two that concludes with the funding and fostering of innovation.

Sramana: What is the typical psychology and stage of the entrepreneurs participating in your community?

Alejandro: The entrepreneurs who work with Rock The Post are the ones who are passionate about their ventures and know why they do what they do, an attribute that can be rare today. These entrepreneurs are not daunted by failure or challenge, and they put in the effort necessary to make their campaign a success.

The stage of the ventures on our site varies, as we have worked with everything from pre-seed stage start-ups to established, branded businesses that put up attractive revenues and have been featured in high-profile media.

The majority so far has been at the seed-stage where they just need that extra push to make a first production run or fulfill a goal that will launch them to the next level.

Sramana: What are the core benefits that your community offers to the investors?

Alejandro: As I mentioned, Rock The Post is a rewards-based platform, and it grants users the opportunity to earn rewards from ventures in return for respective pledges. It’s also rewarding for users to be able to get involved with ventures they relate to themselves, so when all is said and done they can look back and say, “Hey, I truly helped make that happen.”

Sramana: What are the core benefits to entrepreneurs?

Alejandro: Rock The Post offers a lot more than just funding and exposure. Unlike other crowdfunding platforms, Rock The Post offers excellent customer service, as our staff personally works with and assists each entrepreneur to curate his campaign and increase the chances of success. Rock The Post also offers users a variety of educational information (tips, guidelines, webinars, etc.), and serves as a marketing tool to validate and expose business concepts and practices to thousands of people around the world.

Sramana: What is the typical amount entrepreneurs can expect to raise through your community?

Alejandro: The entrepreneurs who work with Rock The Post raise their funds for specific purposes, which they have carefully calculated. For example, Villy Custom, one of our ventures that has appeared on Shark Tank, raised $10,000 to cover the costs of creating the first production of Reflecta-Glow Bicycles.

Entrepreneurs have the option to raise any amount they choose, but to date no entrepreneur on our site has needed to raise an amount over $60,000.

Sramana: Tell us how to best use your platform. How can entrepreneurs ensure a successful fund-raising round on your platform? What are the best practices?

Alejandro: Entrepreneurs who come to Rock The Post usually find the experience to be very refreshing and hands-on compared to other crowdfunding platforms. We have many guidelines and best practices for completing a successful crowdfunding campaign and video. Some of the more important ones are know who you are, what you do, and why you do it. Also,  have a clear, measurable goal and enticing yet reasonable rewards.  It’s important to have an engaging video that introduces you, your venture, your monetary goal and what you are raising the funds for.

Should an entrepreneur and venture be found suitable to launch with Rock The Post, we educate them further on these practices and assist and guide them throughout the process.

Sramana: Thanks for sharing your story. We look forward to following your progress.

This segment is a part in the series : Pre-Seed Money via Crowdfunding

. A Conversation with Rock The Post's Alejandro Cremades
. A Conversation with PleaseFund.Us' James Bailey

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