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11/15/2013 McKinsey & Co - Why crowdfunding appeals to the Middle East
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15 Reasons Why Every Entrepreneur Should Join CrossFit

Today, I turn 45.  To be honest, I’m not in the least bit thrilled about that number.  Sure I don’t feel like I’m 45.  Clearly my sense of humor wouldn’t match that of a 45 year old.  But I’m 45 and that’s a reality, so I just have to deal with it.

I do this crazy thing every 5 years where I get my body in the best shape it has ever been in.  This anniversary is no different with the exception that I decided to do what many advised against. I did the unthinkable for a person my age and joined CrossFit®crossfit CrossFit for those who don’t know is an intense cardio weight workout.  Those in it espouse its benefits as if they were members of a cult. Those outside of it fear it is a masochistic workout that can do more harm than good. 

After 4 months, I have to admit I’ve become part of the cult.  I’ve remained unscathed despite the naysayers. And I’m getting more than a fit body. CrossFit has made me a sharper entrepreneur and the lessons that I’ve learned are many of the same lessons any entrepreneur can learn about building and growing a successful venture.

  1. It all starts with a healthy body.  Without a healthy body you cannot accomplish anything. Exercise while it may be painful during, makes you feel good afterwards. A healthy body leads to a healthy mind.  A healthy mind gives you the ability to think clearly, logically, and strategically.  These are all skills entrepreneurs need to use everyday.
  2. CrossFit is both an individual and team sport. So is entrepreneurship. Both require that you set individual and team (aka company) goals.  In both cases, you should have a long-term objective. In both cases if you set smaller, daily, challenging yet achievable goals, you will have a greater chance of reaching your desired outcomes.
  3. Crossfit like running a business is never the same routine.  Working out and managing the operations of a business is never ending. If you give it your all every day you will never let yourself or your company down.  CrossFit also teaches you how to manage multiple things at the same time and how to prioritize.  Important business skills.
  4. In CrossFit it is all about showing up and execution.  This includes stretching, warming up, exercising, and cooling down. In business this equals researching, preparing, executing, and following through.  Taking time to prepare for what you are going to do will allow you to execute better and that doesn’t only relate to what happens in a gym.
  5. In CrossFit if you aren’t a puddle of sweat afterwards you lack commitment. In business if you don’t feel like you’ve given it your all, you lack determination.  A business cannot succeed without determination and your body will not get into shape without commitment.
  6. Getting in shape isn’t a sprint but a marathon.  You train daily for incremental improvement. The end game comes from your ability to stay on track and endure the hard work. Growing a business doesn’t happen overnight and neither does getting rich.  So go into it with a long-term outlook and you can get both the business and body you desire.
  7. It isn’t about the weight but the form. I’ve never had a CrossFit coach tell me to put on more weight. As a matter of fact I usually do less than the prescribed women’s weight.  However what I do hear is coaching (aka mentorship in business) about how to perform the exercise (or deal with a business challenge).  In business execution isn’t always about how fast you do something but how well you do it.  People judge you for what you can accomplish and how well you accomplish it. 
  8. In CrossFit even though you might have done an exercise 100 times, they teach it to you as if it were your first time. In business repetition is key.  Employees and investors need to understand what you are trying to accomplish.  By repeating it you reinforce in them what you want them to know, what you want them to do, how you want them to do it, and what outcome you expect.
  9. There is risk everywhere. You might have heard stories about people hurting themselves doing CrossFit. In CrossFit you are taught over and over how to perform an exercise. (See repetition above).  They teach you the right way to do an exercise and also show you the wrong way. Nonetheless, people sometimes don’t listen or forget what they are taught.  That can lead to harm. Business is the same.  You need to listen to learn.  You need to practice to make perfect but there’s always the risk that something could go wrong.  There are no guarantees.
  10. You can’t think negative thoughts and complete a rigorous workout the same as you can’t think negative thoughts and succeed as an entrepreneur. You need to think positive, have a “can do” attitude, and push forward.  You need to have a dose of humility and a strong sense of confidence.  Not everyone can lift heavy weights (nor should they). And not everyone can take on the challenges of starting and growing a business. You need to be honest about what you can do however you should be confident in your capabilities.
  11. Be encouraging and help others.  Ever try to exercise when people tell you not to?  Ever try to work when people tell you not to?  It is easy to skip out.  If you are encouraging and helping others chances are they’ll be better off for it and you’ll feel good about it.  A simple “you can do it” shows you care.  It will also engage people to do more than they think they can.  It sure helps when lifting heavy weights.
  12. Competition is a natural part of CrossFit. It is also a natural part of business and life. How you deal with it determines how you will succeed.  Look at competition with a positive attitude and not something from which to run away.
  13. Engage diversity.  In CrossFit, you don’t have to be a 20 something white male to compete.  Thanks to crowdfunding now you don’t have to live in Silicon Valley and be a tech only company to start and grow a business.  You can be a minoirty in an innercity but leverage your online social network to help you succeed. Embrace who you are, what you want to do, and a community of people around you to fulfill your dreams.
  14. Watch others but be your own person.  In Crossfit I like to see how others are performing an exercise and when they hit exhaustion. I use that to pace myself so that I can complete what I need in the time allocated.  In business survey the landscape to see what others are doing.  Use that to strategically plan your path forward.  And finally …
  15. A fist bump means “job well done,” “I’m proud of you,” “we did it,” “let’s keep on going.”  Start bumping fists or whatever else you can do to commend people in your business and around you on a job well done.  It is a small gesture that will carry you and your company a long way.


Are US Crowdfunding Regs in Line with other Global Players?

 Are US crowdfunding regulations in line with other Global players? And which markets are leading crowdfunding and what can be learned from them?  Two very important questions to consider when understanding how crowdfunding is evolving globally.  Here are our thoughts:

US regs are NOT in line with other global players.  The new UK rules were seen as favorable by Crowdcube and we continue to believe that the UK is a great example of the success of a moderate regulatory regime that leverages the value of the transparency that is created by crowdfinance (both debt and equity).  Regulators get transparency and better data monitoring than was ever possible before in the private markets and lenders/investors also benefit from both the transparency and real time engagement with their investments.  Australia has also issued some new draft rules that make CF easier there as well:

The EU's statement a few months ago was split between wanting to regulate, but also understanding that overregulation could kill the industry.  As of May 1, 2014  Italy's highly, highly restricted form of CF has only been successfully completed by 1 company in the 9 months it has been available.  

The short version is that where CF has been given a fair shot by regulators, it has generally worked with extremely low levels of fraud and/or default.  The US rules (if issued as the draft rules are written) will significantly reduce the utilization of this powerful new tool in business finance.  This will enable other countries to continue to move ahead in strengthening their entrepreneurial ecosystems.  

Lessons Learned?  Strong communication and collaboration between the industry and the securities/banking regulator creates an industry that best serves the needs of both investor protection and capital formation.  A regulator that enables CF to function with prudent monitoring enables the regulator to modify regulation when needed, based on actual experience, not based on fears that are not based in fact.  

We have created the CCA Balanced Regulatory Framework(TM) that enables the 5 constituencies that must be satisfied/included in a workable solution, to work through those issues together and form a regulated industry that creates prudent investor protection and enables streamlined capital formation.  To do this you must balance the needs of:

  • Protection for Investors
  • Capital for Companies
  • Transparency for Regulators
  • "Oxygen" for the Industry (enough regulatory room to compete, grow a profitable industry)
  • Engagement opportunities for the entrepreneurial ecosystem (NGO's multi-laterals, development organizations) - this is more vital in developing economies but also plays a role in developed economies. 


3 Key Takeaways from the LendIt 2014 Conference

What a difference a year makes.  The 2014 LendIt conference had nearly 1,000 attendees and 100 online lending companies represented in the space – nearly 4 times the 2013 event.   What was also interesting is that over 50% of the attendees classified themselves as professional investors.  While there were many interesting speakers and sessions (LendIt will make these available online soon), here are three of the topics that garnered a lot of interest at the conference:Screen Shot 2014-05-08 at 8.51.41 AM

  1. P2P is no longer an accurate label/descriptor for onlineNew players and verticals have emerged in the space. Financial institutions are rapidly entering and helping lending platforms achieve scale. As such, P2P is no longer an accurate title.  During a presentation on the $1 Trillion dollar market size of this industry, Charles Moldow, of Foundation Capital, suggested using “Marketplace Lending” instead of P2P lending to better describe the phenomenon because it is a new online market with many types of participants to source and use credit products.   This is the term I will use going forward to describe this market. 
  2. This is not a winner take all market (Amazon), nor is it a free-for-all (Groupon).  While there will be consolidation in the market, unlike Amazon in e-commerce, there will an ecosystem of funding sites that will continue to exist andThis is due to the high barriers to entry in the market including regulatory burdens and scale required to break even. Several speakers indicated that platforms needed to reach at least $1B in origination to reach break even.
  3. The UK and German marketplaces continue to experience massive growth and are interesting to watch for lessons learned to apply in other markets.  While the traditional lenders largely ignore them companies like Funding Circle, Ratesetter, Assetz and Zopa, continue to experienceThey are seeing more than twice the annual growth in loan originations, while maintaining default rates of between 0.7%-1.7%.  While these platforms began as peer-to-peer or peer-to-business lenders, they now (to varying degrees) are seeking institutional capital while they scale up inventory and operations.  Also, unlike some of the marketplace lenders in the US, they cap their gross yields at 12-15%.  In the case of Funding Circle, the SME lending platform, the UK government continues its program of co-investing in certain loans to UK businesses as a way to support lending to SMEs that traditional banks continue to refuse to do. 

A year from now, it will be interesting to see the developments that will have taken place in this market, the development of secondary markets, the securitization of these loans, the globalization of platforms and the development of an ecosystem of companies that will support advances in underwriting, due diligence and transparency.    If the marketplace lending space were a 1000 page novel, I’d say we were only at page 70 today.  

Crowdfunding Platform in Romania


During Jason Best’s recent visit to Romania as part of a US State Department mission, he met Crestemidei, one of three Romanian Crowdfunding Platforms.  This women-led team has been doing pioneering work and we asked them to write a guest post, which follows.   This is an example of hard work and early traction.  If you are creating new crowdfunding platforms or services and have stories to share, please send them to us. Screen Shot 2014-04-28 at 5.22.41 PM ( is a Romanian crowdfunding platform based in Cluj-Napoca (the so called Sillicon Valley of Transylvania) set up by 3 young women and launched on December 2012. The idea behind it all was to turn innovative and creative ideas that generate benefits to community into reality – the motto is ‘We change Romania for the better, idea by idea!’

To test the concept and to collect the funds needed to come up with the platform, the founders ran their own campaign on their own platform (beta version of at that time):

  • The financial goal of the campaign: 1000 EUR in 28 days.
  • The outcome: 41 Romanians (Honorary Founding Members) contributed with 1076 EUR - enough to launch the platform and create the basis for an innovative start-up in Romania.

It was probably the only crowdfunding platform in the world to be launched through a crowdfunding campaign which provided credibility and first hand experience with implementing the concept in a new market and laid the foundation for the growth of the industry in Romania. is a fixed funding and reward-based crowdfunding platform, and the team applies selection criteria before publishing the campaigns (innovation and positive impact in community, financial goal, project team expertise). Anyone can finance innovative projects borne in Romania from 17 domains ranging from writing&publishing, theater to technology, environment, health.

Few key figures (valid as of April 2014):

  • 24 campaigns on the platform: 3 active, 11 successful, 1 campaign was purchased entirely by another company and 9 were unsuccessful
  • Projects’ financing rate: 55%
  • Aprox 14.000 EUR worth of donations
  • No. of contributers: > 600 (2013)
  • Unique vistors: > 50.000 (2013)

The founders are:

  1. 1.Catalina Amihaiesi -
  2. 2.Oana Man -
  3. 3.Judit Katona -

The team also includes Oana Rus, Projects Coordinator, and Catalin Vasile, business angel.

In case you would like to get in contact with us, drop us un email at This email address is being protected from spambots. You need JavaScript enabled to view it. . We are also on twitter, G+ and Facebook:

CCA Survey of Findings from an Audit on the US Crowdfunding Ecosystem

Recently, the CCA Group performed an audit on the crowdfunding ecosystem in the United States. Speaking with industry experts, performing original research, and updating
a database of all active and inactive crowdfunding portals in the country, we were able to develop a “30,000 foot” view of the ecosystem, including a closer look at the types of platforms in the space (e.g. lending, reward, equity, etc.), the verticals (e.g. business, non-profits, etc.), and comparative social metrics. In this post, will take a look at three takeaways.

Niche Plays Tend to Survive

Business programs around the world often teach that startup businesses who identify and exploit a niche have a much higher chance of surviving. In their paper New Firm Survival: Industry, Strategy, and Location, authors Sterns et. al. write “niche purveyors were found to have increased survival chances” and from our initial analysis, this rings true among crowdfunding portals in the United States. When looking at the failure ratio of crowdfunding platforms by vertical, those platforms that could only be described as crowdfunding for “everything” had a 48% chance of failure. That is, of the platforms from our previous database and with the new platforms our team was able to identify, 48% of the platforms that were set up to fund “everything” were no longer active as of the time of this study. Conversely, though there are a few funding portals that focus exclusively on environmental causes, all of the portals that we’ve been able to find in this vertical are still active. See figure 1 for a breakdown of the failure rates of US funding portals by vertical.

Funding for Businesses is a Crowded Part of the Ecosystem

Our study breaks the ecosystem down into seven verticals: everything, nonprofits and causes, creative, environmental, businesses, science, and other. Of course, these verticals are somewhat imprecise and the classification of an individual funding platform into one of these categories involves some subjectivity on the part of the researcher. Nevertheless, one striking takeaway from our study is that the space for business funding platforms is crowded. Our study found that the “business” vertical had more than double the number of platforms than the second-highest category: non-profits & causes. On the opposite in of the spectrum, the least crowded parts of the crowdfunding ecosystem in the United States are funding platforms that focus on science and environmental issues. See figure 2 for a visual representation of the crowdfunding ecosystem in United States by vertical.

The Major Players Have all the Social Proof: a Natural Oligopoly? 

When our team looked at some of the comparative social metrics between platforms in United States, we were struck by the presence of outliers. Looking at the descriptive statistics (see figures 4 and 5) of the active platforms that have at least one “like” on Facebook, the kurtosis (a measure of skew) is enormous, signaling that the distribution of these data is nowhere near normal. The same can be said for the audit of these platforms’ presence on Twitter. Instead of a somewhat normal distribution, there are a few players in the top quartile that dominate the crowdfunding presence on Facebook and Twitter. This is an important consideration given the impact that social proof has. It builds trust, attracts funders, and attracts campaign managers. This may not surprise many of the readers of this piece because a couple crowdfunding portals are becoming household names and others remain relatively obscure.


In his paper Supermarkets as a Natural Oligopoly, Paul Ellickson of the University of Rochester describes the “size of the store” as a factor that drives the success of few firms in the supermarket space: “The oligopolistic chains do not carve out separate turf, choosing instead to compete head to head with their rivals, with choice of store size behaving as a strategic complement. No other theory seems capable of explaining these facts.” Interestingly, he believes that this idea is not unique to supermarkets, but applies to many retail verticals saying, “the same features seem to characterize modern retailing in many arenas.” Could it be that a crowdfunding portal shares economic similarities with large brick and mortar retail spaces? If so, that might be a strategic lighthouse for portal owners.

Written by Davis Jones for CCA