What is crowdfunding
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Crowdfunding involves raising funds from a large number of people ("the crowd"), typically via the internet. It has a long history but has grown significantly with new online platforms. There are different types including donation, reward, equity, and debt crowdfunding. Successful crowdfunding campaigns require choosing the right platform, building a crowd in advance, having a good video and rewards, and promoting on social media. Crowdfunding experts can provide advice on choosing platforms and running successful campaigns.
What is crowdfunding
- 1. @ACrowdExpert What is crowdfunding? Virtual Business Summit Kirsty McGregor, Founder & Chairman of The Corporate Finance Network & The Association of Crowdfunding Experts
- 2. @ACrowdExpert Background/history Donation crowdfunding in 1700s & 1800s for loans to Irish farmers 1885 Statue of Liberty 160,000 contributed 贈100,000 to complete it 1997 US Marillion fans financed a reunion tour $60k 2000 Artistshare 2008 Obama Election Campaign $750m; o $600m from 3m - avg donation $86 2009 Kickstarter launched Largest raise Aug 2014 Coolest Cooler $13mtarget $50k! 62,000 backers! Retail $299; Reward $200
- 3. @ACrowdExpert Who are the crowd? 4 or 400 or 4,000 Individuals or institutions Local authorities UK government Are all investing in crowdfunding projects!
- 4. @ACrowdExpert Some terminology Platform the site that provides the technology & manages the regulation and logistics to promote the project All or nothing or Keep what you raise o Most UK sites are all or nothing Types of crowdfunding o Donation eg yimby (owned by Just Giving) o Reward eg crowdfunder, kickstarter, indiegogo o Equity eg Crowdcube, Seedrs, Angels Den o Debt/Peer2Peer eg Funding Circle, Market Invoice
- 5. @ACrowdExpert How crowdfunding platforms work Online, sometimes offline too Pitch using their forms, sometimes upload business plan own format Video Forum for Q&A Auction Investor/lender can set parameters to autorun or can view individual proposals one by one
- 6. @ACrowdExpert A perfect storm? Why has crowdfunding become so successful? 1. Lending environment for businesses 2. Poor economic market for savers 3. Technology advances of platforms/auctions 4. Power of the crowd & social media
- 7. @ACrowdExpert Where in the world? Platforms 1,000 worldwide across 27 countries Reward - US are the leaders in this type Equity still fairly new in US; UK are leaders Debt UK are leaders
- 8. @ACrowdExpert Which platform for you? Start-ups typically Donation or Reward but need to be able to offer some consumer-appealing rewards Equity often for early stage where concept proven, but growth finance needed Debt for established businesses Download the free CFN CrowdFunding Options App for more platform ideas
- 9. @ACrowdExpert Tips for a successful project 1. Choose the right platform take advice! (find expert adviser on www.TheCFN.org.uk) 2. For Debt platforms ensure you comply with their requirements 3. For Equity & Reward platforms: o Build your own crowd in advance of pitch going live; o Have a social media strategy to promote before & during pitch; o Have a great video suitable for crowdfunding; o Build appealing rewards; o Use experts for the best advice!
- 10. @ACrowdExpert What is crowdfunding? Contact for details of local experts Kirsty McGregor @ACrowdExpert @TheCFN www.TheCFN.org.uk