Worcester Business Journal

www.wbjournal.com April 13, 2015 • Worcester Business Journal 9 WWW.MCGRATHINSURANCE.COM P: 8 0 0 . 3 4 2 . 3 8 5 9 F: 5 0 8 . 3 4 7 . 6 8 5 8 Cyber threats are becoming an increasingly signi!cant risk for today's businesses. Without adequate protection, the costs incurred from a cyber breach could be potentially damaging for your business. Cyber security liability insurance can protect your business in regards to liability expenses, remediation e!orts, and "nes or penalties after a breach. Download our free white paper for more information on how to protect your business from a cyber attack. IS YOUR BUSINESS SAFE FROM A C YBER AT TACK? Kickstarter offers funding jolt to Central Mass. ventures R obert Crowley didn't think there was enough support to re-create the recipe for large-format instant film that was lost with the fold of Polaroid, but a Kickstarter campaign he was urged into undertaking by several online supporters proved him wrong when more than $400,000 was pledged for research and development. The product, New 55 Film, recreates the 4-inch-by-5-inch instant, black-and- white film made famous by photogra- phers such as Ansel Adams. But after four years of research using his own money, Crowley was tapped out. That's when supporters persuaded him to undertake a Kickstarter campaign so they could fund the project. "We presented it not as a presale of anything, but as a way of developing the means to manufacture and have a new business that would produce film," Crowley said of the project, which was pursued by his company, Soundwave Research Laboratories of Ashland. "We had to prove there is real strength for this." Kickstarter has been known for fund- ing one-time production runs of prod- ucts such as books, electronics, games and music albums. The service uses Internet-based funding, also known as crowdfunding, to allow a large number of individuals to fund various projects at multiple levels, each earning investors a reward such as a T-shirt or a product from an early production run. The crowdfunding method has been expanding from its initial focus to cover a larger array of projects. Today, there are crowdfunding sites specifically for medical research (Consano.org) and other academic research (such as Experiment.com, Petridish.com, and Rockethub.com). Kickstarter's range has expanded to encompass the launch of entire companies as well as to fund research and development. The owners of Medusa Brewing Co. in Hudson, which opened in March, raised $27,491 on Kickstarter to complete a renovation of their brewery site. While the Kickstarter funds accounted for less than 5 percent of the owners' startup money, it came at an important time. "We weren't planning on Kickstarter. It was not a part of a business model, but it covered our overages," co-founder Keith Sullivan said. Ethical concerns? However, Dave Howland, who also used Kickstarter in launching 3Cross Brewery in Worcester, feels the financial support generated through Kickstarter carries ethical concerns over whether a for-profit company should solicit funds that are like charitable contributions. "They're asking for a donation, essen- tially," Howland said, explaining that it's important to offer real value in the money that comes in through Kickstarter. Howland used his Kickstarter cam- paign to help distribute his brewery's merchandise to reward campaign sup- porters. While he feels the rewards can be valuable enough that the backer's investment becomes worthwhile, there's still the question of whether it's appro- priate to help fund a for-profit business with donations. While Sullivan acknowledged that this could be a concern, he saw Medusa's Kickstarter as providing an outlet for community support that had already been building for the brewery. While the markup on some of the merchandise offered in the Kickstarter, such as $20 for a Belgian glass now sold for $6, could be considered a donation, this was sup- port people chose to give. Kickstarter also boosted publicity for these companies. Just using the Kickstarter name can help build the base for a project, Sullivan said. Filling in funding gaps Where conventional funding stops being viable is where crowdfunding can really shine, Crowley said. Stuart Etsy BY SAM BONACCI Worcester Business Journal Staff Writer With an idea and $400,000 in Kickstarter funds, Robert Crowley 's Ashland company, Soundwave Research Laboratories, is working to bring an instant, black-and-white film product to market. P H O T O / S A M B O N A C C I >> Continued on Page 21

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