The Crowd Funding Revolution
What it is and Why it Matters
About me
Eric Corl
President + Co-Founder at Fundable
Crowd funding platform for small businesses.
Founder at IdeaBuyer.com
Online marketplace for intellectual property.
President + Founding Team at Startups.co
400,000 Members, 20,000+ Active Accredited Investors
Eric Corl | © 2013 Fundable.com
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Our Company
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Crowdfunding Platform for Businesses
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Funding at Scale
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22 Employees
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ESPN for Startups
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Office Made for Entrepreneurs
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Our Vision
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Quick Tour
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Quick Tour
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Quick Tour
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Quick Tour
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Why Is Entrepreneurship Important?
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Pay 45% of All Private US Payroll
Create 90% of the new jobs in America
Create 4,000 new jobs on an average day
Hire 40% of high tech workers
Provide 55% of all jobs.
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Important But Neglected
Less than 1/3 of professional investments are at the
seed stage.
Most companies cannot raise money from professional
sources until they no longer need it.
Big delta in the impact small businesses have and the
funding available to them.
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Traditional Funding Options
Friends & Family
Angel Investments
Venture Capital
Eric Corl | © 2013 Fundable.com
Bank Loans
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Funding Options
Friends & Family
Angel Investments
Venture Capital
Bank Loans
$60bb
Eric Corl | © 2013 Fundable.com
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Funding Options
Friends & Family
Angel Investments
$60bb
$20bb
Venture Capital
Eric Corl | © 2013 Fundable.com
Bank Loans
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Funding Options
Friends & Family
Angel Investments
Venture Capital
$60bb
$20bb
$20bb
Eric Corl | © 2013 Fundable.com
Bank Loans
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Funding Options
Friends & Family
Angel Investments
Venture Capital
Bank Loans
$60bb
$20bb
$20bb
$14bb
Eric Corl | © 2013 Fundable.com
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Friends & Family
Pro’s
Con’s
Quick to attain
Potential Losses
Typically hands off
Strained Relationships
Friends & Family
Eric Corl | © 2013 Fundable.com
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Angel Investments
Pro’s
Con’s
Larger Checks
Business Involvement
Sophistication
Answering to Someone
Additional Value
90-120 Day Close
91 out of Every 10,000 co’s
Eric Corl | © 2013 Fundable.com
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Venture Capital
Pro’s
Con’s
Large Checks
Lost Control
Inside Baseball
Heavy Dilution
Earning Handcuffs
4 out of Every 10,000 co’s
Industry Limited
Rarely Seed Stage
Eric Corl | © 2013 Fundable.com
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Bank Loans
Pro’s
Con’s
No Dilution
Debt Service Costs
Quick Closing
Personally Guaranteed
Rare for Startups
Brick & Mortar Centric
Eric Corl | © 2013 Fundable.com
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Funding Options
Friends & Family
Angel Investments
Venture Capital
Bank Loans
$60bb
$20bb
$22bb
$14bb
.0091%
$230k
.0004%
$800k
57%
$17k
Eric Corl | © 2013 Fundable.com
.016%
$145k
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Why Are They So Low?
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Geographically & Industry Limited
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Impersonal, Weighted Risk
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Biggest – Restrictions on the Public
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Biggest Issue
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It is illegal for the average person to invest in a private
company.
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Prohibited by SEC restrictions.
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Millions of Potential Investors Cannot Invest
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How Is This Changing?
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Advent of Crowdfunding
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The Passage of the JOBS Act
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Re-Introducing the consumer into the funding process.
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What is Crowdfunding?
crowd funding the practice of funding a project or venture by raising
money from a number of people, typically via the
Internet.
Eric Corl | © 2013 Fundable.com
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Crowdfunding
Pro’s
Con’s
Validate Your Business
Competitor Exposure
Build Traction
Build Social Proof
Publicity
Gain Investor Interest
No Dilution
Eric Corl | © 2013 Fundable.com
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Crowd Funding Now
$1.4 BB
2011
$2.8 BB
2012
Eric Corl | © 2013 Fundable.com
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Types of Crowdfunding
Rewards
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Offer pre-orders
Typically raising < $50k
Anyone can back you
No equity dilution
Equity
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Offer equity stake in company
Typically raising $50k to $10MM
Accredited investors only.
Must issue stock in company.
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The History
History
The Internet
The Legislation
Eric Corl | © 2013 Fundable.com
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The JOBS Act
Jumpstart Our Small Business Act
Signed into law April 2012 ("the crowdfunding act“)
Aims to decrease barriers to entry for startups
Passed 73-26 in the Senate
Passed 380-41 in the House
Eric Corl | © 2013 Fundable.com
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Two Main Impacts
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It Removes the Ban on General Solicitation
2. It Gives Most Americans the right to invest in
private companies.
Eric Corl | © 2013 Fundable.com
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General Solicitation
Before:
Pitching equity raises could only be done privately to accredited
investors or within entrepreneurs' personal, private networks
After:
General solicitation of equity raises is permitted.
Effect:
Entrepreneurs visible to thousands more investors
More investment opportunities for everyone
Anyone can own a piece of a company and diversify how they invest
Eric Corl | © 2013 Fundable.com
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Accredited Investors
Fact:
3.4mm N. Americans = accredited investors in 2010
Approximately 233.7mm N. Americans = accredited investors after JOBS Act
Eric Corl | © 2013 Fundable.com
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The #’s In Perspective
Americans Gambled Over $550 Billion Last Year
American Public Has a Net Worth of $50 Trillion+
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What It Does
Will Democratize Funding for Entrepreneurs
Open Up Trillions In New Funding
Will Bridge the Funding Delta
Eric Corl | © 2013 Fundable.com
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How It Impacts You
Helps more great companies get started and grow, regardless of
where they are based.
States Like WV will have a competitive advantage.
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Examples of Crowdfunding
Companies
Raised
Time
Fleksy
$900,000
3 Months
Training Mask
$20,162
30 Days
3D-Vision
$24,878
30 Days
Seeds
$25,000
60 Days
Eric Corl | © 2013 Fundable.com
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Fleksy
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Problem
Solution
Market Size
Traction
Team
Eric Corl | © 2013 Fundable.com
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BodBot
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Problem
Solution
Market Size
Traction
Team
Eric Corl | © 2013 Fundable.com
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Start Crowdfunding
- Elevator Pitch & Description
- Funding Goal
- Compelling Rewards
- Profile Visuals
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Marketing
- Friends & Family
- Community
- Industry Bloggers & Journalists
- Social Media Networks
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It Isn’t Just About Funding
- Market Validation
- Meet Potential Partners
- Invaluable Press
- Social Proof
- Meet Potential Investors
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Resources
Eric@Fundable.com
LinkedIn: Linkedin.com/in/ericcorl
Twitter: @ericcorl
2012 Funding Review
JOBS Act Infographic
Eric Corl | © 2013 Fundable.com
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Recommended Reading
How to Write the Perfect Email Pitch
What Are Investors Looking For?
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