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Crowdfunding Helps Denver's Inventors Raise Funds, Build Community

Denver innovator Dawn Miracle waged a crowdfunding campaign to promote and sell her invention, the Hot Straw.

A close-up of the Hot Straw.

The idea for the Hot Straw, invented by Denver's Dawn Miracle, was honed at local support groups the Inventor's Roundtable and Colorado Crowdfunding.

Thanks to crowdfunding, a new funding source that gathers small funds from many people rather than large funds from a few, Denver’s introverted innovators are turning ideas into profit.
Dawn Miracle never fashioned herself as an inventor, until one day a great idea fell in her lap. Literally.

While scrubbing coffee stains from her pants, the Denver entrepreneur thought: “There has to be a better way to avoid spilling hot beverages.” 

With that, Hot Straw -- a straw that can withstand heat without leeching chemicals -- was born. A close-up of the Hot Straw.

A prototype and marketing campaign ensued but, as the former medical student with bills and loans to pay soon found out, funding was difficult. Until she found crowdfunding.

 “Without crowdfunding, I’d be very low on funds,” Miracle admits.

Crowdfunding is essentially an online portal used to raise funds for a project or cause through small donations and personalized campaigns in a communal forum. It eliminates the reliance on venture capitalists and angel investors.

Thanks to innovators such as Miracle and visionaries such as Raymond P. Burrasca, a managing director of Denver’s Windom Peaks Capital, L.L.C., Denver is on the cutting edge of the crowdfunding movement.

Burrasca organizes Colorado Crowdfunding, a Denver-based organization that started in April 2012 and now boasts close to 75 local members. He says if there's a way for small investors to invest and for inventors to gain quick access to funds, crowdfunding is it.

Crowd Surfing
Even though crowfunding's roots can be traced back to the production of Shakespearian plays and the construction of the Statue of Liberty, which relied on a publicly-funded campaign for construction funds, modern day crowdfunding is still in its infancy.

Although President Obama signed crowdfunding legislation into the April 2012 JOBS Act, the measure faces roadblocks and won’t take full effect until the SEC can implement a constitution of regulations and transparencies. That, however, isn't a deterrent for Burrasca and Denver's crowdfunders who are creating a “three-legged stool” system that begins with local investors, incorporates crowdfunding and leads to liquidity and the creation of a Denver-based stock market.  

“It’s to help average investors invest without the hurdles of the SEC and Wall Street and to allow them to invest their money where they want,” says Raymond P. Burrasca, a Colorado Crowdfunding organizer.
“It’s to help average investors invest without the hurdles of the SEC and Wall Street and to allow them to invest their money where they want,” says Burrasca, who believes Denver's system can serve as a model to revive the national economy. 

It’s an intentionally slow-growth process, but one that is more transparent and less prone to fraud. Ideally, the crowdfunding system will eliminate the “middle man” or venture capitalists taking their cut. 

Straw That Broke the Camel’s Back
Miracle’s Hot Straw was the first Colorado Crowdfunding project to reach its intended crowdfunding goal and did so at 101 percent of its $18,000 benchmark. 

The concept was honed at Rita “The Inventor Lady” Crompton’s Inventor’s Roundtable in conjunction with the Denver Metro Chamber of Commerce. The group meets once a month at Denver’s Brooklyn’s Restaurant at Sports Authority Field.

Crompton’s seven-year-old group eventually merged with Burrasca’s Colorado Crowdfunding, where they hold joint monthly meetings at the same Denver restaurant. In essence, Crompton’s group develops ideas and Burrasca’s figures out a way to market and fund them.

With the prototype in place, Miracle began a campaign on the crowdfunding portal Indiegogo. Her intentions were to raise enough money to fund packaging, as well as a point-of-purchase advertising campaign.

After receiving the first 30 percent of funding from family and friends, Indiegogo’s algorithm kicked in and Miracle's Hot Straw went viral. During its 30-day campaign, funds poured in from as far away as Canada, Europe and Japan. Men liked the functionality of the straw, while women bought into the cosmetics of no longer leaving lipstick on cups. Before long, Miracle’s campaign caught the eye of dental groups, which lauded the straw for its orthodontic benefits. Now the straw is used by Parkinson’s patients, which were one of Miracle's initial target demographics.

Today, the straw, which went from a 500 trial run to 200,000 straws produced, is made in northern Denver and Miracle has eschewed medical school for the life of an inventor. 

“This is my passion,” says Miracle, who has pledged five percent of sales to the Davis Phinney Foundation for Parkinson’s. “It’s so much fun.”

Crowded House
Despite Miracle’s success, many other Denver residents are in various stages of crowdfunding. At Burrasca’s Colorado Crowdfunding November 2012 meeting, ideas ranged from a horse-racing board game and a backyard gate fixer called Gate Glide to Ernest Feiler's invention that aims to one day eliminate the current procedure for bypass heart surgery. Feiler, who is an 82-year-old retired thoracic surgeon, is attempting to raise upwards of $75,000 via crowdfunding to fund the final test of an invention that’s drained his savings.  

Crowfunding could do this as it helps tighten ideas and readies them for the next step, which is choosing a crowdfunding portal such as KickstarterRocket Hub or Indiegogo.

Eventually, Burrasca would like to see his group grow to the point where it can sustain its own crowdfunding projects, eliminating the major portals and thus setting a Denver-created template for the rest of the country.

Part of the Crowd
The early success of crowdfunding allows other businesses to spring to life. An example is the recent startup, The Moo Factory, which takes an inventor’s idea and designs a campaign -- including crowdfunding -- from concept to finished, marketed product.
“You come up with the idea, we do the rest,” says Moo Factory Chief Operating Officer and Co-Founder Eli Regalado. “We hope to be spitting out entrepreneurs without breaking the bank.”

“You come up with the idea, we do the rest,” says Moo Factory Chief Operating Officer and Co-Founder Eli Regalado. “We hope to be spitting out entrepreneurs without breaking the bank.”

Crowdfunding is not an automatic money printer, says Regalado. Crowdfunding endeavors must be well-crafted and hard-fought campaigns to convince investors to buy into an idea or cause for very little return -- often times as minimal as a T-shirt or mug.

“We feel that crowdfunding demonstrates the inadequacies of capital fundraising,” Burrasca says. “The point is to democratize that process, because people like Ernie (Feiler) deserve it."

Read more articles by Christopher C. Wuensch.

Christopher is a freelance writer and contributor to Confluence
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