crowdfunding Archives - LFX Tools

It isn’t always hard to spot open source initiatives with great potential. When several end users have deployed a new solution or feature set and organizations have used it to fill a gaping business need or functionality gap, mass marketplace validation may not be far behind. But what determines whether an emerging innovation becomes the next Kubernetes or quietly remains in the shadows never to draw large-scale awareness? Oftentimes, the main factor is funding.

We created LFX Crowdfunding to increase the odds of making the projects that could have a profound impact on the open source and larger business communities financially viable. It differs from other public fundraising tools in that it was built by an open source organization, for the open source community, and in a manner consistent with open source values. Our twist on public underwriting provides several unique advantages that won’t be found in competing crowdfunding tools or alternative funding models.

It’s Tailor-made for Critical Projects

Crowdfunding was designed to help developers, project maintainers, end users, individual investors, companies, and other stakeholders raise and manage the money needed to expand the reach of fast-growing, potentially game-changing innovations. With a focus on project quality rather than quantity, Crowdfunding is intended for those select initiatives that are gaining steam in the community, adding thousands of new users each year, and on the cusp of widespread adoption. The tool helps purveyors of these increasingly popular experimental features and functionality attract all of the resources, tangible and intangible, needed to achieve massive scale.

It’s Neutral

LFX Crowdfunding is an alternative to the gig economy model, on which the tech industry is increasingly relying. It ensures neutrality in a way that isn’t possible when a developer signs a statement of work with an individual company for a single project. The gig economy’s pay-to-play dynamic potentially locks freelancing open source specialists into the payor’s vision for a feature, functionality, or business process, which could limit their flexibility to incorporate the community’s input should its desires conflict with the funder’s. Crowdfunding enables innovators to remain neutral in their development efforts—money comes into a central “portal,” and project contributors can apply it to what’s best for the new technology project, meetup or event, security audit, or travel initiative as a whole.

It’s Transparent

It’s important that individuals and companies know that project participants are spending their money efficiently and responsibly at all times. That’s why LFX Crowdfunding grants funders access to all spending records associated with the open source programs they back. Technical and financial contributors can log into the Crowdfunding portal anytime to view every stipend, travel expense, laptop purchase, or any other expenditure associated with a project. And unlike competing public fundraising offerings that come with no oversight on project maintainers, every expense request is fully vetted by LFX to ensure adherence to strict spending policies which require that all outlays are reasonable and vital to the project.

Governance measures and compliance enforcement don’t end there. Project maintainers, participating finance contributors, and administrators can utilize timesheets in the Crowdfunding app for work-time accounting purposes, thereby giving benefactors the peace of mind that labor is productive and allocated appropriately. Dashboards provide those same stakeholders leading or executing a given initiative visibility into the progress made in reaching stated objectives and overall project performance at any given time.

It’s Dependable

With many backers betting large sums of money on Crowdfunding projects, the Linux Foundation also sets and actively enforces high technical standards generally expected of any corporate entity. To that end, the Linux Foundation actively verifies and displays proof that vulnerabilities have been detected and bugs are continually being fixed. The neutral nonprofit also confirms and displays a list of all enterprises using an asset at the heart of a given project in the Crowdfunding app so that contributors have a sense of which and how many organizations will benefit from the initiative.

It Frees You Up to Code

Critical open source projects like the Linux Kernel and Kubernetes have inherent legal and tax implications that add a layer of accounting and compliance work. These responsibilities take open source professionals away from the core tasks at hand. Thus, in addition to providing spending oversight and governance, we process all of the required tax documentation at the end of each fiscal year, including those for personnel and donations. With LFX Crowdfunding, software programmers can focus on what they do best—coding, testing, and fixing bugs—rather than burning precious time on administrative duties.

It’s Free

Since many open source projects are grassroots by nature, project leaders cannot afford to have social funding platform costs eat too much into their budgets. While others charge anywhere from 5 to 13 percent for general use of their crowdfunding applications, credit card processing, and tax form preparation, project founders don’t pay a penny for the first $10 million raised via LFX Crowdfunding—those proceeds go directly toward creating value, which is particularly critical to our members who typically aren’t working with massive budgets and must make efficient use of resources.

The Linux Foundation is exploring ways to work with corporate sponsors to make the entire service free in the future, thereby increasing the odds that new developments that could be of value to them and others in the business world survive and thrive.

It’s Flexible

Individuals or companies anywhere in the world can make one-time or recurring contributions via credit card or invoiced payment.

LFX Crowdfunding helps those looking to initiate new open source projects find everything they need in one place—they can now get financing, in addition to technology, legal, training, and project management support. Software coders looking to fill a technology gap, find a market for a crucial back-end process, or piece together solutions using existing open-source tools can use Crowdfunding to get their projects off the ground and draw those initial large-scale investors that lay the foundation for a “stickier” membership model.

The Linux Foundation has put more than $800,000 of its own money toward many of the promising initiatives being financed by Crowdfunding and will continue to do so in the future. After all, sometimes it takes a crowd to bankroll the next Linux Kernel.

Discover Opportunities to Donate

Crowdfunding is a great way to raise the money you need to sustain and grow your projects, support community events, or cover the costs of mentorship programs. But what is crowdfunding exactly? And how can you take advantage of this tool for your open source initiative?

Read on to learn what Jono Bacon, leading speaker on community and author of People Powered: How communities can supercharge your business, brand, and teams, has to say.

You may have heard the word “crowdfunding” floating around the tech industry for the last few years. “It’s the future of product launches,” and other attention-grabbing statements about it may have turned your head.

What Is Crowdfunding?

It’s true what people are saying, however let’s first discuss what crowdfunding is. Why is it valuable to you? As defined by crowdfunding experts at crowdsourcing platform Fundable,

“Crowdfunding is a method of raising capital through the collective effort of friends, family, customers, and individual investors.”

The reason it’s such a hot topic is that it’s totally inverted the natural way businesses often find funding.

Before crowdfunding, if you wanted to raise money for a new idea, your materials and data would all need to be presented to a limited pool of wealthy investors, and you’d have to hope someone liked it. Only very wealthy sources like angel investors, venture capitalists, and possibly banks would be there. And if you put an amazing idea in front of the wrong set of investor’s eyes? Well, that’s your loss of time and money.

Crowdfunding platforms such as Fundable, Gofundme, Kickstarter, and LFX Crowdfunding have flipped the model on its head, offering you the power to pitch your project to everyone. These campaigns typically raise money through many smaller donations from everyday people in addition to higher scale investors. This helps projects connect to passionate investors and fans, bypassing investors that might not understand the value of speciality areas such as open source.

Discover Opportunities to Donate on LFX Crowdfunding

Crowdfunding backers can choose how much to invest. You may contribute $30 to get a t-shirt and a sticker, or $2,000 to get early access to the first version of the product. It is a model that scales to different projects and budgets, and it can be especially powerful to raise funds for your open source initiatives.

The Benefits

Crowdfunding can be a powerful tool for starting a business, launching a project, or even just funding a worthy cause. There are lots of reasons why giving crowdfunding a shot would be a great idea for your cause. The money raised is often of lesser importance.

Three major benefits to crowdfunding:

It provides a way to validate your idea
It gives your team it’s first early adopters
It’s a way to get feedback and refine your product before it’s fully launched.

Concept validation is important. By getting your idea in front of as many eyes as you can, you’ll quickly be able to see how receptive the public masses are to it. This will reveal any holes in your offer, copy, or other parts of your funnel, thus allowing you to fix it. Looking at LiveCode’s open source project on Kickstarter, we can see how the concept of a more tech-accessible future was inspiring enough to raise £493,795. While they didn’t know if many people would believe in the project, more people than they ever dreamed were inspired by the idea of coding being easy and accessible to anyone who wants to do it.

Crowdfunding can be a powerful tool for starting a business, launching a project, or even just funding a worthy cause.

Crowdfunding also gains you early adopters and loyal advocates. It’s great to know that you have customers waiting for your launch before you’ve even completed the product. This not only funds your product but gets people excited that they get to be a part of launching something! This excitement often fuels your crowdfunding investors to share your product on social media and with their friends. These early adopters are often essential to crowdfunding campaign success. Ghost, an open-source blogging solution, raised over £196,362, which is more than seven times over their initial goal. Those writers really are passionate about their creative freedom, and they signed up for ghost because it reflected those beliefs.

Finally, crowdfunding is a way to refine an idea itself. Don’t get upset if your crowdfunding investors start making suggestions to you about your product or business. Use this as an easy way to brainstorm improvements! Your team may never have thought of the ideas your investors will present to you- it’s a great (and free) way to improve your concept. OpenWorm, another crowdfunded project, combines open source tech and biology to build fully digital organisms. This has the greater scope of understanding the complex parts of humans to cure complex diseases, however they’re starting with the worm as the simplest living organism. They’ve been given feedback from medical and tech professionals to refine the project and give it the greatest chance of making an impact.

What Do You Have to Lose?

Hopefully, you now understand a little better what a powerful tool crowdfunding can be for your ideas. Crowdfunding investors are a group of movers and shakers just waiting to hear your idea to fund, refine, and get behind it. What do you have to lose?

Not much if you choose to crowdfund your project through LFX Crowdfunding. It’s risk-free, with 100% of every dollar you donate going to the project. Unlike most platforms who charge upwards of 13% for application, credit card processing, and tax form preparation fees, the Linux Foundation will match these costs for the first $10M raised, ensuring that all proceeds go toward creating value.

Raise and spend money transparently with a public ledger, get invoicing and tax support, and access to security scanning and mentorship programs. Is your project interested in boosting diversity in your community? You might even be eligible for a matching donation. Open source projects like KiCad, Manjaro and RethinkDB are already raising funds on LFX Crowdfunding. It’s worth learning more about if you’re considering crowdfunding your open source project.

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LFX Crowdfunding: The Fundraising Tool for the Open Source Community