Crowdfunding for Success
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Transcript of Crowdfunding for Success
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Crowdfunding for Success
Alternative Funding
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①Overview
②Platform Types
③What You Need to Know
④Crowdfunding Success
⑤Where We Stand
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Who Am I?
Accelerator Executive Director
Startup Co-Founder
Startup Mentor
University Professor(teaching entrepreneurship)
Marketing Specialist
Active Crowdfunder(backed 40+ successful products)
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OverviewWhat is this “Crowdfunding” mumbo-jumbo all about?
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What is Crowdfunding?
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What is Crowdfunding?
Debt
Rewards Donation
Equity
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SCALABILITY
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Crowdfunding Challenges
①Fraud Prevention
②Inflated Expectations
③Investor Education
④Investor Fatigue
⑤Prudent Regulation
⑥IP Protection
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Why Do It?
Market Validation
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Why Do It?
Bridge Fundraising Gap
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Why Do It?
Better Deals
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Why Do It?
Power in Numbers
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Beyond Investment
Emotionally Rewarding
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Beyond Investment
It’s COOL!!
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PlatformsHighlights
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Rewards
Top Platforms
①Money for “stuff”① Merchandise, pre-order,
exclusive access② Founders keep equity
②Avg. raise: $7,500① ~100 “backers”
③50%+ fail to reach goal① Refund to backers100’s of
others
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Donation
Top Platforms
①Money for support① Fund your cause② Feel good③ Peer-to-peer funding
②Avg. raise: $1,400
③Reduced overhead① More money to the
cause, less to admin100’s of others
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Debt
Top Platforms
①Money for more money① Peer-to-peer Micro-loans
②Avg. raise: $4,700① ~2%-4% default rate② SBA loans: ~11.6% default
③Around the banks① Competitive/undercut
interest rates (0%-10%)② Alternative methods to
evaluate creditworthiness
100’s of others
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Equity (Accredited Only)
Top Platforms
①Money for equity stake① Own piece of company② Payout at exit
②Avg. raise: $190K① Platform takes %
③Not for everyone① In US, only accredited
investors can participate② Sites typically curate deals
100’s of others
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Equity (Retail)
Top Platforms
①Money for equity stake
②Wisdom of the crowds① …though layers of
curation & oversight are in place
③Europe leads the way① EU supporting initiatives② Varied rules from country
to country10’s of others
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What You Need to KnowFacts & Figures
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Global Crowdfunding Industry
2013: $5.1 Billion
Data Source: Massolution annual crowdfunding report
…and GROWING!
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What You Should Know
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Geographic Breakdown
*2012 Data
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Fundraise Amounts
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Category Breakdown
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Success StoriesA Quick Look
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Keys to a Successful Campaign
① Duration: 30-60 days① Set minimum & stretch goals
② Constant updates① Weekly② Countdown to final day
③ Leverage your network
④ Show the product
⑤ Tell a story① Appeal to emotion
⑥ Secure 30-50% pre-launch
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Pebble Smart Watch
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Oculus Rift
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Oculus Rift
$2 BILLION!
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Yoga Studio Launches
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Modu-Strip
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Thousands and Thousands…
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Where We StandLegislative Outlook
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JumpStart Our Business Startup (JOBS)
① Bipartisan support
② Signed into law April 5, 2012
③ Eases reporting requirements
④ Allows for ‘general solicitation’ of private company investment
⑤ Exemptions for “emerging growth” companies
⑥ SEC to define new rules…
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SEC RulesTitle II
Title III
① Went live 9/23/13
② Authorizes general solicitation① Includes public advertising
③ Opens crowdfunding to accredited investors
④ Verification process for platforms and investors
①Going live….??① Late 2014/early 2015
②Opens crowdfunding to the masses
③Flawed in current form① Burdensome expenses② Unrealistic expectations③ Lacks liability protection
for platforms
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The Future
①Rules need to evolve
②Consolidation inevitable
③New world order
④Be prepared for speedbumps
⑤Power to the people
⑥Optimistic!①…yet realistic
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“A journey of a thousand miles begins with a single step”
-Lao-tzu
Travis [email protected]
Linkedin.com/in/traviskahn