Crowdfunding 101
Crowdfunding 101
Crowdfunding 101
PBR Story
February 2010
$200 million from 5 million beer fans
SEC
No accredited investors
Laws prohibited regular investor in this type of deal
Foundation of Crowdfunding
No beer was harmed during this campaign
November(ish) 2009 - Michael Migliozzi and
Brian Flatow
www.buyabeercompany.com
“Crowdsourcing”
$300 million
Compensation for investor?
“Crowdsourced Certificate of Ownership”
Beer equal to the amount pledged
ACT OF CONGRESS
Startup Exemption Team
Startup Exemption Framework Story
WSJ
JOBS Act
Crowdfunding
Describes multiple different funding relationships between
individuals and organizations connected via the Internet.
Token crowdfunding
Raising NON-EQUITY capital in exchange for “tokens”
Crowdfund investing
Section 4(6) of the JOBS Act
Provides exemption from registration
SEC registered crowdfunding platform *
Regulation D crowdfunding
Equity and debt capital by private companies Rule 506 of
Regulation D (amended by the JOBS Act)
Rule 506 Crowdfunding
Compare the Bills
Seed round funding Term Sheet
Series A funding Offering Memorandum
Venture Capitalists Equity Security
Private Equity Funds Debt Security
Angel Investor Revenue-based Security
Private Share
Issuance limit
$1 million in any 12 month period
Facilitation
Small investments by many people
Annual income / Net Worth restrictions
Time restrictions
CrowdFunding Initiative (CFI)
Lowers the failure rate of small businesses
Augments and supports capital formation
No socioeconomic discrimination
Tipping Point
Rewards vs Equity
Ownership in the business
Automated
Launcht
Niche platforms
Humor Break
Majority of projects are $1000 to $100,000
Less than 1% of funded projects are over $100k
Will not replace
Venture Capital
Commercial Lending
Angel Investor
Private Investment
Constant upkeep and promotion
Keep the buzz buzzing
Kickstarter Ulule
Indiegogo Earlyshares
RocketHub Startsomegood
GoFundMe Sportfunder
Razoo 33needs
Crowdrise ChipIn
Pledge Music Buzzbnk
Sellaband InventionBuy.com
Appbackr Crowdtilt
Crowdfunder Go4Funding
CrowdLever Cumplo
Fundarole Dancefunder
iCrowd CrowdBnk
Petridish FundAGeek
2011
$1.5 billion raised worldwide (63% increase)
1.2 million successful campaigns
Funds pledged to paid ratio declined slightly
April, 2012 – 452 platforms
Over $2 billion
Kickstarter Peerbackers
Indiegogo Go Fund Me
Rockethub Razoo
Crowdfunder Crowdrise
Quirky PledgeMusic
CoFolio Sellaband
Start Some good Appbackr
CFP Site Model Focus
Kickstarter kickstarter.com AoN Art / Creative
Indigogo indiegogo.com KiA / AoN Any
Rockethub rockethub.com KiA Varies
Crowdfunder crowdfunder.com Unknown CF 2.0
Quirky quirky.com Unknown Inventions
CoFolio mycofolio.com Equity Local Small Biz
Start Some startsomegood.com Unknown Socially
Good Responsible
Peerbackers peerbackers.com Kia / AoN Any
Razoo razoo.com KiA Indiv. / Cause / NP
Go Fund Me gofundme.com KiA / Aon Any – Personal
Crowdrise crowdrise.com KiA Celeb fundraising
Appbackr appbackr.com Sales based Mobile Apps only
2012 Statistics
$319 million pledged
$274 million collected
2.24 million backers
709 million page views
86 million unique users
About 50% of projects funded
Art Music
Comics Photography
Dance Publishing
Fashion Technology
Film Hardware
Food Software
Games Theater
TikTok+LunaTik
Sought $15k, raised nearly $1 mil
Watch
Elevation Dock
Sought $75k, raised nearly $1.5 mil
Dock
E-Paper Watch
Sought $100k, raised….
Another Watch
2012 Statistics
Projects raised 20% more than in 2011
Core campaigns ran 49 days (60)
Successful campaigns ran 39 days
14% of campaigns had a single donor refer more
contributors than the project owner
Let’s Build a Goddamn Tesla Museum
$1.37 million of $850k goal (over 33,000 contributors)
Who Gives a Crap
$66,548 of $50k goal
Yellow Jacket iPhone stun gun
$100,751 of $100k goal
BugASalt
$15,000 goal
$577,541
BugASalt
Romeo and Juliet
Do’s and Don’ts
Do
Research
Token (Reward) Selection
Target Audience
Pitch Video
Funding Goal
Network, Network, Network
Update, Update, Update
Study other projects
Funded and not funded
Similarities / Differences
Market
Who are they?
What’s your hook?
Uniqueness or Differentiation
Are the rewards logical?
Do they make sense
Tiers
$25
$50 (25% of all pledges)
$100
Limited Offering
Tangible vs. Personal / Virtual / Professional
What’s your hook?
Personalize
Why would I give you money?
Static Entertainment
Morningside Students
Morningside Alumni
Parents of current/former college students
Clear / Natural
Approach
Humorous
Serious
Quirky / Imaginative
Details
Call to action
Interesting – catchy
Length of video
Reasonable
Previous campaigns
Successful
Failures
Compelling Rewards
Funding Ranges
Tiers
Engaging
Exploit your network
Facebook
LinkedIn
Twitter
Google+
YouTube
Pinterest
Email
Updates on campaigns
Time
Funding request too high
Poor (flimsy) rewards
BalconyTV
$1 Tom will sing on the Dublin balcony
$5 Tom will dance on the Dublin balcony
$20 We will send you good karma from the balcony
$50 Give a special shout out in BalconyTV episode
All the same…
Pen type-A (retail price $99)
$2500 request
Produce a run of pens for $50 each
$1 A thank you note on website (warm fuzzy)
$25 Super thank you credit on website and a
drawing of an invention
$50 A Pen
$75 Pen + autographed drawing
$100 Pen + Pen for friend
$150 Pen + Pen for two friends
Requested $2500, received $282k
Pre campaign strategy
Platform
Leverage your networks
Prepare the perfect campaign
Remember WHY people pledge
Perks / Rewards / Tokens
Update & Follow up
Static Entertainment – Indiegogo and
Kickstarter
www.static-entertainment.com
Discover My Campus – Appbackr
FC2000 – Quirky and Indiegogo
Rebranding campaign
http://www.fielders-choice.com/
Slide N Glide – Quirky and Indiegogo
http://www.slidenglidetray.com/
Cell:
712 870 0934
Email:
dan@crowdfundiowa.com
Twitter:
@dwubIA
Blog:
crowdfundiowa.com
LinkedIn:
www.linkedin.com/pub/dan-wubbena/b/810/120/