To get from this . . . to this . . . takes this . . .
How can we get money to fund our project? • Use your Life Savings? • Tap FF&F? • Borrow it?
• Sell Equity?
How can we get money to fund our project? • Use your Life Savings? • Tap FF&F? • Borrow it?
• Sell Equity? • Get Donations from Believers
How can we get money to fund our project? • Use your Life Savings? • Tap FF&F? • Borrow it?
• Sell Equity? • Get Donations from Believers • This is the basis of CROWDFUNDING
CrowdFunding has a long history • 17th Century – Literary groups pooled resources in a
subscription model to fund publication of interesting books • Today – Crowd Funding is Everywhere Motion Pictures
Civic Projects
Charitable Causes
Books
Band Tours
Environmental Causes
Lawsuits
Pop Group Albums
CrowdFunding has a long history • 17th Century – Literary groups pooled resources in a
subscription model to fund publication of interesting books • Today – Crowd Funding is Everywhere Motion Pictures
Civic Projects
Charitable Causes
Innovation Books
Band Tours
Lawsuits
Start-Up Enterprises
New Product Development
Internet Apps Environmental Causes
Pop Group Albums
Projects
The Big Gap
Bridging the Gap . . . Must Create Awareness and Motivation to Participate
• Belief • Passion • Desire to be a part
• Make a Contribution
Why Do People Participate? • Innovative Orientation -- People who want to support
innovation and be part of making new ideas successful. • Social Identification -- People who identify with the
content, cause, or project that sparks the desire to be a part of the initiative. • Monetary Gain – People who are motivated to participate
in expectation of some type of monetary or other gain.
Recent Innovations that Make CrowdFunding Work for Us
S
Today, Awareness Is Created By Social Media • Twitter -- Creates BUZZ about the project • Facebook -- Links people to the project through friends • Instagram & Pinterest – Makes the project real by
broadcasting visual images • YouTube – Broadcasts videos of the project progress • Google+ -- Ties the project to Google search engine • Campaign Web Site – Destination for Social Media Activity
The goal of the Social Media campaign is to create a high degree of interest and direct that interest to the CrowdFunding Platform website
Two Major CrowdFunding Platforms • Kickstarter.com (Founded 2009) • Fixed Funding Campaigns Only [“All or Nothing” (AON)] • Fee = 5% of Proceeds Only if Goal Met; Otherwise Zero • Campaigns >150,000
• Average Campaign = $5,000 • Success Rate = 44%
• Indiegogo.com (Founded 2007) • Fixed Funding (AON) or Flexible Funding [“Keep It All” (KIA)] • AON Fee = 4% of Proceeds Only if Goal Met; Otherwise Zero • KIA Fee = 9% of Proceeds • Campaigns >200,000 • Average Campaign = $3,700 • Success Rate = 20%
What does it take to have a successful campaign? Four Phases . . . • Phase 1 -- Preparation • Phase 2 -- Creation • Phase 3 -- Execution
• Phase 4 -- Follow Through
Phase 1 -- Preparation • Get Inspired and Learn What to Expect • Select an Effective Platform • Indiegogo.com or Kickstarter.com • Long-Term Thinking • Detailed Project Plan • Brainstorm the Basics • Target Audience; Resources; Your Team; Expectations • Assemble Your Team • Team More Effective Than an Individual • Campaign Media and Materials • Scripts; Videos; Photos; Testimonials; Prototypes
Phase 2 -- Creation • Focus Your Idea • Meaningful Size for CrowdFunding • Think Beyond the Money • Establish Timeline • Start Only When Really Ready • Optimum Campaign 40 Days or Less • Develop Your Pitch • Create Perks • Physical Items v. Personal Contact v. Experiential • Strategically Price Perks ($25 Perks v. $100 Perks) • Set Goals and Funding Types • Fixed (All or Nothing) v. Flexible (Keep It All)
Phase 3 -- Execution • Launch Big • Get Early Momentum from Your Team Networks • Early Momentum Works Magic • Promote! Promote! Promote! • E-Mail; Social Media; Blogs; Journalists • Use Platform Sharing Tools • Engage Contributors Personally
and Individually • Use Platform Dashboard to Manage Campaign • Work Your Perks • Introduce New Perks; Start Fulfillment Early; Promote Best Perks
Phase 4 -- Follow Through • Perk and Promise Fulfillment • If Flexible Funding – Must Fulfill • Fixed Funding + Goal Met – Must Fulfill • Fixed Funding + Goal Not Met – Return Money • Collect Your Money • PayPal v. Amazon Payments v. Credit Card • Multiply Marketing Value of Campaign • Use Contributor Lists to Expand Marketing Contacts • Continue Updating Contributors • Continue Campaigning • New CrowdFunding Campaigns for Product Improvements • New Product Campaigns
Campaign Costs (Indiegogo) • Strategy Choices • Keep It All (KIA) – Flexible Funding • Keep whatever you get even if goal not reached
• All or Nothing (AON) – Fixed Funding • Keep the proceeds only if goal met or exceeded
Flexible Funding (Keep It All)
Fixed Funding (All or Nothing)
Goal Reached
4%
4%
Goal Not Reached
9%
0% (Contributors get refunded)
Third Party Fees
3% to 5 % Processing Fees for PayPal or Credit Cards plus International Funds Processing Fees and Wire Transfer Fees
Case Study -- Coolest Cooler Project (Kickstarter)
Coolest Cooler CrowdFund Rewards LEVEL
AMOUNT
PARTICIPANT S
REWARD
1
$5
1,078
2
$ 25
311
Party Cup & Coolest Blended Drink Guide
3
$ 55
133
Commemorative T-Shirt, Party Cup, & Coolest Blended Drink Guide
4
$ 165 / $185
57,346
One Coolest Cooler & Coolest Blended Drink Guide
5
$ 225
2,455
One Coolest Cooler, T-Shirt, Party Cup, & Coolest Blended Drink Guide
6
$ 500
31
One Coolest Cooler & Two Personal Telephone Calls with Founder
7
$ 1,750
304
Ten Coolest Coolers
8
$ 2,000
8
Name Engraved on Founder’s Cooler
First Cooler off Assy Line & Founder Tends Bar at Participant’s Party
Case Study -- Coolest Cooler Project (Kickstarter)
Some Observations . . . • Influence is Important: Knowing who backs a
campaign helps sway other potential investors. • Momentum is Critical: Initial funding begets new
funding. • Validation: Having once raised money successfully
online is proof that you can do it again. • Customer Engagement: People who fund your
