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Crowdfunding Feed-Forward Loop for Successful Investors

IP.com Disclosure Number: IPCOM000243683D
Publication Date: 2015-Oct-09
Document File: 3 page(s) / 46K

Publishing Venue

The IP.com Prior Art Database

Abstract

Disclosed is a method for increasing the amount of funds available to investors who have shown good judgments in previous cycles of enterprise crowdfunding. The method rewards desirable employee behaviors or employee status to incentivize participation in enterprise crowdfunding.

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Page 01 of 3

Crowdfunding Feed -

Crowdfunding occurs on websites where people propose and invest in projects , and other people invest in those projects. If a project receives enough investment to reach the funding goal, then the funds are committed, and the project goes ahead. People can also follow a project to receive notifications about investments and other changes to the project.

The dynamics of enterprise crowdfunding are similar to the Internet model , with the following differences:

• Proposers and investors are employees of the enterprise • Investors spend money from an allowance provided by the enterprise • Employees can volunteer to contribute personal own time and skills to a project
• Employees can share (i.e., recommend) a project to other employees

Enterprise crowdfunding is important to business. First, enterprise crowdfunding is a support for grassroots innovation, harnessing the wisdom of the employees to source and evaluate ideas. Second, enterprise crowdfunding can increase employee engagement through employees' ability to influence new directions in the company. Third, enterprise crowdfunding establishes a fundamentally new set of organizational and incentive structures.

In current enterprise crowdfunding practices, the sponsoring organization allocates a budget to a group of employees for investing in one another's projects , and the investment allowance of each employee is simply the quotient of budget /(number of participating employees). There is value in spending the funds, and therefore it is desirable to encourage and incent employees to make investments in others ' projects.

The novel contribution is a method for increasing the amount of funds available to investors who have shown good judgments in previous cycles of enterprise crowdfunding. The method rewards desirable employee behaviors or employee status .

The primary goal is to increase the investment allowance of employees with good previous investments, according to some metric of investment success. Suppose that the organization conducts annual iterations of crowdfunding . During iteration #2, the method is to examine the record of each employee from iteration #1. If an employee invested in a project that was successful, then the conclusion might be that the employee had good judgment. The method can then proceed to enhance that employee's ability to further use good judgment by increasing that employee 's investment allowance during iteration #2. If there were a fixed total budget available for iteration #2, then the method requires a proportional decrement in the investment allowances of the other employees. This principle can be extended so that, for iteration #k, each employee's investment allowance is computed based on the success of projects in which said employee invested during iteration #(k-1), iteration #(k-2), and so on.

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-Forward Loop for Successful Investors

Forward Loop for Successful Investors


Page 02 of 3

While is it useful to descr...