Post on 16-May-2015
CrowdfundingCrowdfunding
EntrepreneurialSparkEntrepreneurialSpark
88thth March 2012 March 2012
@twintangibles@twintangibles#crowdfundingES#crowdfundingES
AgendaAgenda
• What is Crowdfunding?• How is it linked to social?• Advantages, disadvantages & examples• What is typical?• How to be successful• Kirsty Burnham - SoLoCo• Q&A
What is Crowdfunding?What is Crowdfunding?
What is Crowdfunding?What is Crowdfunding?
“Crowdfunding is a method of raising capital, or resources, by collecting
together lots of small amounts from a large number of people generally using
the Internet and social media.”
“Crowdfunding is a method of raising capital, or resources, by collecting
together lots of small amounts from a large number of people generally using
the Internet and social media.”
www.xplane.com/obamawww.xplane.com/obama
Obama 2008 CampaignObama 2008 CampaignObama 2008 CampaignObama 2008 Campaign
$122
$264.5M
$27.7m
$88.2m
Obama McCain
Total
<$200
•First time any First time any company in Europe had company in Europe had attempted to raise attempted to raise money via an online money via an online share offeringshare offering
11stst round: round:• 10% Firms 10% Firms
EquityEquity• £230 per £230 per
shareshare• 1300 1300
investorsinvestors• 20% off in 20% off in
the shop!the shop!
BrewdogBrewdogBrewdogBrewdog
22ndnd round: round:• 8% Firms Equity8% Firms Equity• £95 per share£95 per share• 5000 investors5000 investors• 90% sold in 3 months90% sold in 3 months• £1m investment in less £1m investment in less
than 2 weeks.than 2 weeks.• £95 to £12k individual £95 to £12k individual
investments investments
All or Nothing
Take it All
Holding Model
Club Model
Micro-lending
P2P
Reward Based
Equity Based
Micro-finance
CrowdfundingPlatform Models
Where is it Used?Where is it Used?
Source http://www.core77.com/blog/kickstarter/crowdfunding_revolution_should_i_do_this_21697.asp
CrowdcubeCrowdcube
Source: www.crowdcube.com
How is it linked to social?How is it linked to social?
The Long TailThe Long Tail
Products
Popu
lari
ty
Quantity
Valu
e
?Re-imagine YourselfRe-imagine Yourself
£
Viral ReachViral ReachViral ReachViral Reach
Expectation of ReturnExpectation of Return
• Non-traditionalNon-traditional• Brand loyaltyBrand loyalty• Less aggressive?Less aggressive?• Longer term?Longer term?
Coase’s Penguin – Yochai BenklerCoase’s Penguin – Yochai Benkler
Advantages, disadvantages and examples
Advantages, disadvantages and examples
AdvantagesAdvantages
• Market testingMarket testing• Distributed cognitionDistributed cognition• Not just cashNot just cash• Small sums quickly availableSmall sums quickly available• Brand advocatesBrand advocates• Increasingly a location for VCsIncreasingly a location for VCs• Stable investmentStable investment• Expectation of returnExpectation of return
DisadvantagesDisadvantages
• It doesn’t always workIt doesn’t always work• Damaging?Damaging?• It’s not freeIt’s not free• It is not a panaceaIt is not a panacea• How will other investors view itHow will other investors view it• Administration costAdministration cost
Printrbot – 3D PrinterPrintrbot – 3D PrinterPrintrbot – 3D PrinterPrintrbot – 3D Printer
•$25,000 Goal$25,000 Goal
•Avg. donation $460Avg. donation $460
•17 Reward categories17 Reward categories
The Bicycle AcademyThe Bicycle AcademyThe Bicycle AcademyThe Bicycle Academy
•£40,000 Goal£40,000 Goal
•9 Reward categories9 Reward categories
•Funded in 6 daysFunded in 6 days
•Campaign Campaign Build-up/Preparation Build-up/Preparation time: 5+ monthstime: 5+ months
What is typical?What is typical?
So what is typical?So what is typical?Pledged
SuccessfulProjects Backers Avg # backers Avg Project Value Avg Pledge Value
Film & Video $32,473,790.40 3,284 308,541 94 $9,888.49 $105.25
Music $19,801,685.21 3,653 260,178 71 $5,420.66 $76.11
Design $9,180,637.55 319 99,923 313 $28,779.43 $91.88
Art $5,900,166.14 1,172 78,558 67 $5,034.27 $75.11
Publishing $5,134,388.55 774 74,280 96 $6,633.58 $69.12
Technology $4,673,470.41 125 39,341 315 $37,387.76 $118.79
Theatre $4,051,962.62 931 50,144 54 $4,352.27 $80.81
Games $3,616,530.88 253 45,622 180 $14,294.59 $79.27
Food $2,809,503.31 241 30,682 127 $11,657.69 $91.57
Photography $2,116,261.93 343 26,897 78 $6,169.86 $78.68
Comics $1,763,628.48 267 27,544 103 $6,605.35 $64.03
Fashion $1,351,659.85 182 16,793 92 $7,426.70 $80.49
Dance $1,054,763.95 292 14,377 49 $3,612.21 $73.36
Source: www.kickstarter.com
Source: www.crowdcube.com
How to be successfulHow to be successful
KickstarterKickstarter fundit.iefundit.ie
44%
100
0
75%
Relative SuccessRelative Success
Keys to SuccessKeys to Success
Keys to SuccessKeys to Success
Keys to SuccessKeys to Success
Keys to SuccessKeys to Success• Be Social Media readyBe Social Media ready• Have a plan and prepareHave a plan and prepare• Don’t forget your offline community Don’t forget your offline community • Select your project carefully Select your project carefully • Select your platform carefullySelect your platform carefully• Develop your rewardsDevelop your rewards• Create your pitchCreate your pitch• Select your channels Select your channels • Develop a publishing plan Develop a publishing plan • Define and allocate the resource and skills required Define and allocate the resource and skills required • Get advice Get advice • Get legal adviceGet legal advice
tim@twintangibles.co.uk@twintangibles
www.twintangibles.co.uk
twintangibles 2012
Tim WrightTim Wright
Kirsty Burnham