Crowdfunding: a new mechanism for donation and investment

Michael Norton,Chairman & Co-founder, Buzzbnk

Transforming Finance Conference talk10 May 2013

My own starting point

What is Crowd-Funding?

• Internet fundraising going beyond just giving

• A set target amount to create a specific outcome

• Within a specified time limit

• All or nothing (usually)

What is Crowd-Funding – continued• Benefits in return – goods, product,

opportunities, events, tributes, etc.

• Gift Aid is available if for a charitable purpose

• It can involve a financial return: a revenue share or interest on loans or an equity stake

The Crowd is as important as the

FundingMore than just money. Your crowd can give you

ideasfeedbackadviceskillsthingscontactsand mobilise support from their

friends

Engaged supporters will be there for you now and in the future

Loans as well as Donations

• Principal only

• Fixed rate of interest

• Revenue share (also available for donations)

• Interest in kind

• A blend of these

Different reasons for giving support• Personal support: mobilising support from people

you know and in your networks who want to support you and the project you are developing. [The Mushroom Project]

• People looking for a bit of fun – accessing “Money can’t buy” returns. [Gateshead CAB]

• Sales in advance. [The HisBe supermarket]

• An ethical or social investor looking to put money into something worthwhile and seeking a financial or a social return. [Pants2Poverty and The Converging World]

• Outliers: Projects that can get publicity and catch the imagination. [Malala’s bouquet and the BP oil spill]

Crowdfunding transforming social finance• Lending for good:

Personal loans which underpin social loans

Recycling support for socially enterprising projects• Investing for good, sharing in the success

Equity

Quasi equity• Saving for good:

Allia Bonds

Community savings funds

michael@buzzbnk.orgwww.buzzbnk.org