Crowdfunding: going local or going global
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Going global and going local: The future and benefits of crowdfunding Claire Ingram, Stockholm School of Economics Robin Teigland, Stockholm School of Economics
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Presentation at lokalekonomidagen in Knivsta, Sweden
Transcript of Crowdfunding: going local or going global
Going global and going local: The future
and benefits of crowdfunding
Claire Ingram, Stockholm School of EconomicsRobin Teigland, Stockholm School of Economics
Crowdfunding in Sweden
Dr. Robin TeiglandAssociate Professor
Stockholm School of Economics [email protected]
@robinteigland
Claire IngramPhD StudentStockholm School of [email protected] @Claire_EBI
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 (DeBuysereet al., 2012)
Massolution2013
Globally470 000 projects via
800+platforms
SWEDEN37m SEK(Oct 2013)
Form of Funding Benefits for Funders
Donation-based Donation Intangiblebenefits.
Reward-based Donation or pre-purchase
Rewardsin addition to intangible benefits.
Equity-based Investment Return on investment if company does well. Rewards sometimes also offered and
intangible benefits may motivate too.
Debt-based Loan Repaymentof loan with interest. Alternativelyintangible
benefitsif loan given interest-free.
Ingram &Teigland, 2013
Money raised:SEK 36,502/ €4,000
Number of investors: 186
Date funded: September 2011
Sector: Food
Stockholm success story: Flippin’Burgers
Top 5 Best American Restaurants in Europe
Enabled local interaction, involvement
Who are the funders?
Educated experts? 85 % of respondents have university degree (vs16% of women and 22% of men
in general population, 2013) 42% had knowledge in same field as project they funded 49 % reported to have been better at judging project qualitydue toprevious
experience
The “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 lovers
Skoglund&Stiernblad2013
Skoglund&Stiernblad2013
Equity crowdfunding in Sweden
No EU/EEA country can require a prospectus to be prepared for rounds of less than 100 000 EUR
For rounds of 5 million EUR or more, an EU prospectus is always required
In Sweden the limit is 2.5 million EURLess than 150‘non-qualified’ investors without a prospectus
Benefits of Crowdfunding
Test the market or establish a user baseMarket your product or serviceObtain funding (may not be a huge amount of money though)Screening device for investorsReach investors further afield or people without the right
“connections”Source skills and connections?BUT in Equity crowdfunding:Lots of small investors – a problem?
Ingram &Teigland, 2013
Lots to think about....Going global? Going local?
Reward-based? l Niche product or service?l Global appeal?l What are the rewards?l How do you reach an
international audience – and stand out?
l Community-specific product or service?
l Local appeal?l What are the rewards?l Do the 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 a foothold?
l How much equity?l How to value your project?l Local benefits – experience,
connections etc
How to succeed?
Are you going global or going local?Choose the right platform– and crowdfunding type – for your project
(keep in mind platform fees)Make the concept easily understoodMake it personal?Ensure that you have initial critical mass (social media, newspapers) –
NB in donation- and reward-basedFeed the crowdKeep followers up to dateMAGIC
Thank you!
Image via NewYorker.com
Questions?
Claire IngramStockholm School of [email protected]@Claire_EBI
