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University of New Mexico STC looks into crowdfunding to fill the gap

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The Story

ALBUQUERQUE, NM – JANUARY 18, 2013 As part of its ongoing effort to expand its gap fund program for new technologies developed at the University of New Mexico, STC is promoting three of its technologies for funding donations on the crowdfunding website RocketHub (http://www.rockethub.com/profiles/61336-stc-unm). See Dan Mayfield’s interview with STC President & CEO Lisa Kuuttila in the January 18th online edition of Albuquerque Business First, reprinted below.

Why bring on two or three investors when you can have hundreds?

As crowdfunding is taking off for nonprofits, art projects and video game development, STC.UNM, the University of New Mexico’s high-tech incubator, is using crowdfunding in an effort to both market and fund three of its tech companies. The three companies’ business plans have been added to RocketHub, a crowdfunding site that asks for small donations to promote big ideas.

“We’ve always been technology-oriented, and we want to use all the tools that are available out there,” STC.UNM director Lisa Kuuttila said.

“There’s two types of crowdfunding out there. The one is the donation type, and the other is for startups to get investment capital. We feel we were in the position to tackle the investment side of it.”

Of course, it’s not easy. For high-tech companies, the success rate isn’t great. The e-commerce site Soldsie, however, did raise nearly $425,000 via crowdfunding.

The STC is going the crowdfunding route with inventions from three companies: Lobocaine, quick-dissolving strips that would cure mouth pain; a new herbal tea that could help relieve inflammatory bowel disease; and a pressure-sensing fabric that has a variety of uses.

The goal is to raise at least $10,000 per project, Kuuttila said.

Fittingly, Kuuttila added STC.UNM’s three most consumer-friendly projects to the site.

The idea is to raise gap funding, which would carry the company from the pure startup phase to something on a level that a venture capitalist or an angel investor would be interested in.

It’s also a marketing strategy, and a potential way to reach thousands more investors across the globe that may be searching for these types of ideas.

Since the SEC hasn’t made any rules regarding crowdfunding, such as how much someone needs to invest to become a shareholder, or if a crowdfunder can even be a shareholder, Kuuttila said the companies are giving away thank-you knickknacks or acknowledgment on the website.

“They may get a letter, or mugs, or pens and larger donations could mean a recognition,” Kuuttila said.

But, thanks to IRS rules, there can be no quid pro quo for a donation.

“This is all experimental. We’re trying it out. We may decide it’s not a good venue,” Kuuttila said. “We don’t know.”

SOURCE: Albuquerque Business First

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