Post on 08-Jan-2017
Crowdfunding-------
New forms of financingROBIN TEIGLAND & CLAIRE INGRAM STOCKHOLM SCHOOL OF ECONOMICS
OCTOBER 2015ROBIN.TEIGLAND@HHS.SE
Banking is essential, but banks are not.
Bill Gates
The FinTech space is growing….
Tech
Big Data
IoT
Internet Infrastructure
MobileTechnology
OpenAPI
ArtificialIntelligence
Cloud
Robotics
Bitcoin protocol
Private banking
FinCommercial
banking
Investmentbanking
Securities
AssetManagement
Insurance
Fraud
Algorithms
FinTechPayments
Raising fundsVirtual currencies
Advice
Foreign exchange
Real estate
3
FinTech in StockholmCompany Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
TrustBuddy 2009 P2P lending
iZettle 2010 Mobile payments
FundedByMe 2011 Crowdfunding, crowd equity
Kivra 2011 Digital mailbox
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnCMiner 2013 Cryptocurrency mining equipment
Toborrow 2013 P2P lending for companies
Cryex 2014 Cryptocurrency clearing house
Local Stockholm success story:
Flippin’ BurgersMoney raised: SEK 36,502 / €4,000
Number of investors: 186
Date funded: September 2011
Sector: Food
Enabling local, small-scale solutions
Top 5 Best American Restaurants in Europe
http://travel.cnn.com/best-americana-restaurants-europe-023346
What is crowdfunding?Accumulation of small investments in individual
projects by large number of individuals (the “crowd”) via or with help of Internet and social
networks (De Buysere et al., 2012)
Picture: FundedByMe
Crowdfunding is enabled through peer-to-peer (P2P) transactions on multi-sided Platforms
(MSPs)
http://sloanreview.mit.edu/article/strategic-decisions-for-multisided-platforms/
A system that activates the untapped value of all kinds of assets through models and
marketplaces that enable greater efficiency and access.
- Botsman
The Sharing Economy
Harvard Business Review, 2014
The Sharing Economy: Embracing Change with Cautionhttp://www.slideshare.net/eteigland/sharing-economy-webb
Four forms of crowdfunding
Form Benefits for funders
Donation-based Donation Intangible benefits.
Reward-based Donation or pre-purchase
Rewards in addition to intangible benefits.
Equity-based InvestmentReturn on investment if company
does well. Rewards sometimes also offered and intangible benefits may
motivate too.
Debt-based LoanRepayment of loan with interest. Alternatively intangible benefits if
loan given interest-free.
Ingram & Teigland 2013
Crowdfunding across the EU
Crowdfunding growth 2012-2015
USD 34 bln E
How big can crowdfunding be?By 2025 global crowdfunding could reach USD 90 to 96 bln 1.8 times today’s global VC industry)
Growth potential greatest in emerging markets?USD 50 bln in China by 2025?
P2B lending in Sweden
Toborrow.se
Crowd equity
Ingram & Teigland 2013
Why crowdfund?Difficulty in raising funds from traditional sourcesTest market or establish user baseMarketing & publicity for your product or serviceFaster time to marketFunding (may not be large amount of money though)Screening device for investorsAccess greater pool of investors: further afield or
people without right “connections”Skills, connections, and other resources?
For all ages - including teenagers
http://www.indiegogo.com/projects/afripreneurs-and-the-leapfrog-effect
Measuring demand in advance
“It’s not just about the money.”
685 people talking about product on
social media
Australia’s “Major Disaster Department”World’s largest telecom
One step in the financing chain
Nesta
How to succeed?Choose right platform– and crowdfunding form
Going global or local?What do you give in return (thank you, reward, pre-
purchase, shares)?Keep in mind platform fees
Define the concept Make it easily understoodMake it personal?
Feed the crowdEnsure initial critical mass (social media, newspapers)Keep followers up to date
MAGIC
http://www.slideshare.net/eteigland/crowdfunding-in-sweden
Robin Teiglandrobin.teigland@hhs.sewww.slideshare.net/
eteigland@RobinTeigland
If you love knowledge, set it free…
If you like this presentation and would like to contribute to our research, we accept bitcoins: 14hs4JbnQLXE87GGzu84uXGaspmxmnLpwC.Thank you!!!!!
Appendix
Who are the funders?Educated experts(?)University degree Knowledge and previous experience in same field
“In-crowd”“Entrepreneurs”Risk lovers
Skoglund & Stiernblad 2013
Who are the funders?Educated experts(?)85% respondents have university degree (vs 16%
women/22% men in general population, 2013)42% had knowledge in same field as project they
funded49% reported to have been better at judging project
quality due to previous experience“In-crowd”47% of “the crowd” classified themselves as
entrepreneurs – compared to only 7% of Swedish population (2012)
77% never bought shares in unlisted company before 41% risk loversSkoglund & Stiernblad 2013
http://www.fundable.com/blog/crowdfunding-infographic---the-jobs-act-explained
Going global? Going local?Reward-based? l Niche product or
service?l Global appeal?l What are rewards?l How do you reach
international audience – and stand out?
l Community-specific product or service?
l Local appeal?l What are rewards?l Does community know
about you – can you reach them?
l Local benefits
Equity-based? l Looking to scale up?l How much equity?l How to value your
project?
l Looking to establish foothold?
l How much equity?l How to value your
project?l Local benefits –
experience, connections etc?
Lots to think about....
Trends in crowdfundingPeer to peer lendingNicheCommunityHybrid platformsEnterprise sponsoredInternal corporate crowdfundingLIVE!Economic developmentCelebrities…
Crowdfunding for research
Strategic partnership
+
Celebrities entering the scene
Executive Producer Robert RedfordNarrated by Jodie Foster
Donald Trump’s crowdfunding siteOpen to anyone
Internal corporate crowdfunding
iFundIT
More than 300 participantsEntry-level workers to VPs
Given $2,000 to invest over 8 week period Choose internal projects in which to invest
Enabling entrepreneurs anywhere
Ushahidi of Kenya
Kenya
Venture capitalists are the travel agents of yesterday – here today, gone tomorrow.
Venture capitalist in Silicon Valley –
June 2013
What’s next?