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What is it?

What is it?. The rise of the platforms. How does it work?. How does it work?. How does it work?. How does it work?. How does it work?. Different models.

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What is it?

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  1. What is it?

  2. The rise of the platforms

  3. How does it work?

  4. How does it work?

  5. How does it work?

  6. How does it work?

  7. How does it work?

  8. Different models Donation based: Allows charities, or those who raise money for social or charitable projects, to gather a community online and to enable them to donate to a specific project. Reward based: Enables people to contribute to projects and receive non–financial rewards in return, usually operating a tiered system where the more you donate the better the reward you receive. £% Lending based:Projects or businesses seeking debt apply through the platform uploading their pitch, with members of the crowd taking small chunks of the overall loan. Equity based: Enables the crowd to invest for equity, or profit/revenue sharing in businesses or projects. This form of the model has been the slowest to grow due to regulatory restrictions that relate to this type of activity.

  9. Different sectors Education and research Public services’ Business Community and voluntary sector Arts

  10. Different scale £ 1 Million The Nifty Minidrive £239555 £72135 Sir you are being hunted Hackney Pirates £7793 New Leaf Coop £3340 Juice collaborations with Shlomo and MaJiKer £1550 Bedford Busking festival £535 £1

  11. How does crowdfunding add value?

  12. Harnessing people’s motivations to get worthwhile projects funded The direct connection between entrepreneur and the crowd gives the entrepreneurs the chance to appeal to investors’ motivations and interests as well as their wallets.

  13. Democratising funding and measuring demand in advance Crowdfunding is a powerful way of identifying what projects people want to see go ahead.

  14. Lower transaction costs - By giving investors more of a role in carrying out assessment, and automating more of the funding process, crowdfunding can reduce the transaction costs of getting capital to entrepreneurs, making financing cheaper.

  15. From mass production to personal production - Crowdfunding helps businesses serve a more diverse and personalised market, by backing what otherwise would fail to get funded.

  16. Nesta’s work on Crowdfunding

  17. Working together across lab and P&R P&R - IEG Lab P&R -PSI

  18. Main outputs Blog series Funding Circle

  19. Platforms we’re backing

  20. Example platforms

  21. Staged rewards – how do they work?

  22. Solar Schools • Crowdfunding renewables • Combining online-offline • More than financial returns What next? Iconic spaces…. Solar cities….?

  23. Some possible risks • What if good, effective projects can’t tell their story well? • If supporters come from existing networks, how will those in poorer areas manage? • Wilful misuse (no case known>yet) • Is it replacing or expanding giving?

  24. Some possible benefits • More than money : time, assets? • Crowds of support – network effect • Innovative/high relevance ideas • New types of audience reached Mainstream funders experiment could help us find out more…

  25. Get in touch! • Alice.casey@nesta.org.uk @cased

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