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Crowdfunding

“Fisheye photography’s fantastic, but the lenses are often really expensive” opens Greg dash’s crowdfunding video pitch.

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Crowdfunding

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  1. “Fisheye photography’s fantastic, but the lenses are often really expensive” opens Greg dash’s crowdfunding video pitch. Having designed and built a small camera with a built–in fisheye lens for personal use, Greg received lots of requests to make more so decided to see if he could make some for the wider public to buy. Using Crowdfunding he managed to raise £67,000 (well in excess of the £35,000 he initially sought) from over 700 people seeking to pre–order the camera. Greg already has a manufacturer lined up and is planning on having the first 1,000 cameras ready by June. www.funding-eye.co.uk

  2. Crowdfunding Jon Matthews www.funding-eye.co.uk

  3. Purpose of session • Introduce Crowdfunding concept, what it is and how it works • Help you identify if it is suitable for your organisation / project • Guide you through the process • Give some tips on getting it right www.funding-eye.co.uk

  4. Definition • ‘Crowdfunding’ is the use of small amounts of capital from a large number of people to finance an new venture • It makes use of vast networks of friends, family, followers through social media platforms www.funding-eye.co.uk

  5. Traditional Crowdfunding www.funding-eye.co.uk

  6. Exercise • Assume you have £1000 to invest in a project • This is disposable income, not you entire savings, but extra cash you have available • Who would give me their £1000 if… www.funding-eye.co.uk

  7. I told you I wanted to start a business that flavoured children's medicine • I’d passed a fraud test to prove my credibility • I had information to show: kids don’t like liquid prescription medicines, my solution makes them take good without interfering with the medicine, how it will make money • I told you my other company won the RBS company of the year award • I was your brother, best friend, neighbour, you saw me develop the product, and seen it work • If I asked for £500 or £250 or £50 www.funding-eye.co.uk

  8. A bit of history • The Term was first used by Michael Sullivan  in 2006 • 17th Century to Finance Book printing • 1884 The American Committee for Statue of Liberty raise $100,000 from 125,000 people towards the pedestal • 1997 Marillion Tour underwritten by fans www.funding-eye.co.uk

  9. Web 2.0 • Rise in the interactive nature of the internet • 2000 Launch of JustGiving • 2005 Micro Lending sites • 2006 – 10 Growth of Crowdfunding begins • 2010 Social projects start getting funding www.funding-eye.co.uk

  10. Other benefit • Raise profile • Marketing • Engagement with audience • Feedback • It is free www.funding-eye.co.uk

  11. Long Tail Popularity = Value or money Product = Quantity or People www.funding-eye.co.uk

  12. Crowdfunding Models • Donation: Fund  projects by getting small donations from a large number of people • Reward: Source small amounts from individuals in exchange for rewards • Lending: Borrow from the crowd with individuals contributing small parts of the overall loan amount • Equity: Seek investment from the crowd in exchange for a share in your business or project www.funding-eye.co.uk

  13. All or nothing • Keep it all www.funding-eye.co.uk

  14. Key Characteristics • Microfinance - low barriers to investment, small amounts, large population • Offers rewards - not just equity - intangible and tangible, first to buy, discount • Target - defined goal or money being sought • Time limited - not always • Viral promotion - incentive to spread the word • Project based - rarely for operating / core cost www.funding-eye.co.uk

  15. Some Examples www.funding-eye.co.uk

  16. Obama Campaign 2008 www.funding-eye.co.uk

  17. www.funding-eye.co.uk

  18. www.funding-eye.co.uk

  19. Why use platforms? www.funding-eye.co.uk

  20. Which one? • Sector specific - art, community, • Geographic location • Amount of traffic visiting • Size of contribution = min and max levels • Fee structure - amount and all nothing vs keep it all • Time limit www.funding-eye.co.uk

  21. Crowdfunder www.funding-eye.co.uk

  22. Kickstarter www.funding-eye.co.uk

  23. Process - Seller • Identify project • Set the rewards and duration • Choose platform • Target group • Promote • Get the funds • Give rewards www.funding-eye.co.uk

  24. Process - Buyer • Register with site • Selects product • Purchase the rewards they want • Promote the product to others • Collect reward (if target met) www.funding-eye.co.uk

  25. Risks and Barriers • Reputation • Intellectual property protection • Donor exhaustion • Fear of public abuse www.funding-eye.co.uk

  26. Keys to success • Be social media ready • Have a strategy • Select the project carefully • Identify initial target audience • Select platform • Develop rewards • Create pitch • Select channels www.funding-eye.co.uk

  27. Develop publishing plan • Define resources needed • Set time frame • Engage • Give funders privileged access • Promote, promote, promote • Honour promise www.funding-eye.co.uk

  28. What makes a good pitch • People can connect to it • Clear introduction • Say what you need and why • What will be the benefits • Provide proof of credibility • What are the rewards • Make it easy for people to share • Videos – if you do it, do it well • Be passionate www.funding-eye.co.uk

  29. Elevator pitch www.funding-eye.co.uk

  30. CONTEXT HERO VILLAIN BATTLE RESOLUTION What you ACHIEVE not what you DO www.funding-eye.co.uk

  31. “I’m in the corporate story-telling business. (CONTEXT) ABC ltd specialise in helping clients figure out exactly how to tell their story in a way that will compel customers to buy.  Human beings — you, me, your customers — connect better when the message is in story form. (HERO) If you want your customers to listen, and want what you’re offering, you’ve got to capture them with a story (VILLIAN). And we’ve helped clients like Charles Schwab and Warner Bros. increase their lead conversion rate by up to 25 percent with a story we’ve helped them craft (BATTLE). What’s your company’s story? (RESOLUTION)” www.funding-eye.co.uk

  32. Context 1 in 4 people experience mental distress www.funding-eye.co.uk

  33. The Hero www.funding-eye.co.uk Our mental health organisation provides support to people experiencing mental distress

  34. The Villain But people are unable to access our service in the more remote areas of the county due to poor transport links www.funding-eye.co.uk

  35. The fight We are providing an outreach bus to provide information and advice in small rural communities www.funding-eye.co.uk

  36. Resolution You can help us do this by….. www.funding-eye.co.uk

  37. Promotion • Pre launch preparation • Early backers • Shout about it! • Keep people informed • Set targets – gives you something to shout about! www.funding-eye.co.uk

  38. In Summary • Getting small amounts of funding from many people • Project based • What do you offer investors • Preparation and promotion • Follow through your promise! www.funding-eye.co.uk

  39. Resources • Crowdfunder – How to Guide • Victoria Westcott – How to crowdfund • Youtube! • http://www.crowdingin.com/ • Crowdfinding platforms - most have guides • Nesta – Crowding In and An Introduction to Crowdfunding www.funding-eye.co.uk

  40. Any questions • info@jonmatthews.co.uk • www.funding-eye.co.uk www.funding-eye.co.uk

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