“Fisheye photography’s fantastic, but the lenses are
often really expensive” opens Greg dash’s
crowdfunding video pitch.
Having designed and built a small camera with a built–in
fisheye lens for personal use, Greg received lots of
requests to make more so decided to see if he could
make some for the wider public to buy.
Using Crowdfunding he managed to raise £67,000 (well
in excess of the £35,000 he initially sought) from over
700 people seeking to pre–order the camera. Greg
already has a manufacturer lined up and is planning
on having the first 1,000 cameras ready by June.
2013
www.funding-eye.co.uk
Crowdfunding
Jon Matthews
2013
www.funding-eye.co.uk
Purpose of session
• Introduce Crowdfunding concept, what it is
and how it works
• Help you identify if it is suitable for your
organisation / project
• Guide you through the process
• Give some tips on getting it right
2013
www.funding-eye.co.uk
Definition
• ‘Crowdfunding’ is the use of small amounts
of capital from a large number of people to
finance an new venture
• It makes use of vast networks of friends,
family, followers through social media
platforms
2013
www.funding-eye.co.uk
Traditional
Crowdfunding
2013
www.funding-eye.co.uk
Exercise
• Assume you have £1000 to invest in a
project
• This is disposable income, not you entire
savings, but extra cash you have available
• Who would give me their £1000 if…
2013
www.funding-eye.co.uk
• I told you I wanted to start a business that flavoured
children's medicine
• I’d passed a fraud test to prove my credibility
• I had information to show: kids don’t like liquid
prescription medicines, my solution makes them take
good without interfering with the medicine, how it will
make money
• I told you my other company won the RBS company of
the year award
• I was your brother, best friend, neighbour, you saw me
develop the product, and seen it work
• If I asked for £500 or £250 or £50
2013
www.funding-eye.co.uk
A bit of history
• The Term was first used by Michael
Sullivan in 2006
• 17th Century to Finance Book printing
• 1884 The American Committee for Statue
of Liberty raise $100,000 from 125,000
people towards the pedestal
• 1997 Marillion Tour underwritten by fans
2013
www.funding-eye.co.uk
Web 2.0
• Rise in the interactive nature of the
internet
• 2000 Launch of JustGiving
• 2005 Micro Lending sites
• 2006 – 10 Growth of Crowdfunding begins
• 2010 Social projects start getting funding
2013
www.funding-eye.co.uk
Other benefit
•
•
•
•
•
Raise profile
Marketing
Engagement with audience
Feedback
It is free
2013
www.funding-eye.co.uk
Long Tail
Popularity = Value or
money
Product = Quantity
or People
2013
www.funding-eye.co.uk
Crowdfunding Models
• Donation: Fund projects by getting small
donations from a large number of people
• Reward: Source small amounts from individuals
in exchange for rewards
• Lending: Borrow from the crowd with individuals
contributing small parts of the overall loan
amount
• Equity: Seek investment from the crowd in
exchange for a share in your business or project
2013
www.funding-eye.co.uk
• All or nothing
• Keep it all
2013
www.funding-eye.co.uk
Key Characteristics
• Microfinance - low barriers to investment, small
amounts, large population
• Offers rewards - not just equity - intangible and
tangible, first to buy, discount
• Target - defined goal or money being sought
• Time limited - not always
• Viral promotion - incentive to spread the word
• Project based - rarely for operating / core cost
2013
www.funding-eye.co.uk
Some Examples
2013
www.funding-eye.co.uk
Obama Campaign 2008
300
250
200
Obama
McCain
150
100
50
0
2013
www.funding-eye.co.uk
2013
www.funding-eye.co.uk
2013
www.funding-eye.co.uk
Why use platforms?
2013
www.funding-eye.co.uk
Which one?
•
•
•
•
•
Sector specific - art, community,
Geographic location
Amount of traffic visiting
Size of contribution = min and max levels
Fee structure - amount and all nothing vs
keep it all
• Time limit
2013
www.funding-eye.co.uk
Crowdfunder
2013
www.funding-eye.co.uk
Kickstarter
2013
www.funding-eye.co.uk
Process - Seller
•
•
•
•
•
•
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Identify project
Set the rewards and duration
Choose platform
Target group
Promote
Get the funds
Give rewards
2013
www.funding-eye.co.uk
Process - Buyer
•
•
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•
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Register with site
Selects product
Purchase the rewards they want
Promote the product to others
Collect reward (if target met)
2013
www.funding-eye.co.uk
Risks and Barriers
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Reputation
Intellectual property protection
Donor exhaustion
Fear of public abuse
2013
www.funding-eye.co.uk
Keys to success
•
•
•
•
•
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Be social media ready
Have a strategy
Select the project carefully
Identify initial target audience
Select platform
Develop rewards
Create pitch
Select channels
2013
www.funding-eye.co.uk
•
•
•
•
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Develop publishing plan
Define resources needed
Set time frame
Engage
Give funders privileged access
Promote, promote, promote
Honour promise
2013
www.funding-eye.co.uk
What makes a good pitch
•
•
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People can connect to it
Clear introduction
Say what you need and why
What will be the benefits
Provide proof of credibility
What are the rewards
Make it easy for people to share
Videos – if you do it, do it well
Be passionate
2013
www.funding-eye.co.uk
Elevator pitch
2013
www.funding-eye.co.uk
CONTEXT
HERO
VILLAIN
BATTLE
What you ACHIEVE not what you DO
2013
www.funding-eye.co.uk
RESOLUTION
• “I’m in the corporate story-telling business.
(CONTEXT) ABC ltd specialise in helping clients
figure out exactly how to tell their story in a way
that will compel customers to buy. Human
beings — you, me, your customers — connect
better when the message is in story form.
(HERO) If you want your customers to listen,
and want what you’re offering, you’ve got to
capture them with a story (VILLIAN). And we’ve
helped clients like Charles Schwab and Warner
Bros. increase their lead conversion rate by up
to 25 percent with a story we’ve helped them
craft (BATTLE). What’s your company’s story?
(RESOLUTION)”
2013
www.funding-eye.co.uk
Context
• 1 in 4 people
experience mental
distress
2013
www.funding-eye.co.uk
The Hero
Our mental health
organisation provides
support to people
experiencing mental
distress
2013
www.funding-eye.co.uk
The Villain
• But people are unable
to access our service
in the more remote
areas of the county
due to poor transport
links
2013
www.funding-eye.co.uk
The fight
• We are providing an
outreach bus to
provide information
and advice in small
rural communities
2013
www.funding-eye.co.uk
Resolution
• You can help us do
this by…..
2013
www.funding-eye.co.uk
Promotion
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Pre launch preparation
Early backers
Shout about it!
Keep people informed
Set targets – gives you something to shout
about!
2013
www.funding-eye.co.uk
In Summary
• Getting small amounts of funding from
many people
• Project based
• What do you offer investors
• Preparation and promotion
• Follow through your promise!
2013
www.funding-eye.co.uk
Resources
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•
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Crowdfunder – How to Guide
Victoria Westcott – How to crowdfund
Youtube!
http://www.crowdingin.com/
Crowdfinding platforms - most have
guides
• Nesta – Crowding In and An Introduction
to Crowdfunding
2013
www.funding-eye.co.uk
Any questions
• info@jonmatthews.co.uk
• www.funding-eye.co.uk
2013
www.funding-eye.co.uk