crowdfunding for success

Crowdfunding for Success

Alternative Funding

①Overview

②Platform Types

③What You Need to Know

④Crowdfunding Success

⑤Where We Stand

Who Am I?

Accelerator Executive Director

Startup Co-Founder

Startup Mentor

University Professor(teaching entrepreneurship)

Marketing Specialist

Active Crowdfunder(backed 40+ successful products)

OverviewWhat is this “Crowdfunding” mumbo-jumbo all about?

What is Crowdfunding?

What is Crowdfunding?

Debt

Rewards Donation

Equity

SCALABILITY

Crowdfunding Challenges

①Fraud Prevention

②Inflated Expectations

③Investor Education

④Investor Fatigue

⑤Prudent Regulation

⑥IP Protection

Why Do It?

Market Validation

Why Do It?

Bridge Fundraising Gap

Why Do It?

Better Deals

Why Do It?

Power in Numbers

Beyond Investment

Emotionally Rewarding

Beyond Investment

It’s COOL!!

PlatformsHighlights

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

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

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

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

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

What You Need to KnowFacts & Figures

Global Crowdfunding Industry

2013: $5.1 Billion

Data Source: Massolution annual crowdfunding report

…and GROWING!

What You Should Know

Geographic Breakdown

*2012 Data

Fundraise Amounts

Category Breakdown

Success StoriesA Quick Look

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

Pebble Smart Watch

Oculus Rift

Oculus Rift

$2 BILLION!

Yoga Studio Launches

Modu-Strip

Thousands and Thousands…

Where We StandLegislative Outlook

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…

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

The Future

①Rules need to evolve

②Consolidation inevitable

③New world order

④Be prepared for speedbumps

⑤Power to the people

⑥Optimistic!①…yet realistic

“A journey of a thousand miles begins with a single step”

-Lao-tzu

Travis Kahntjkahn@gmail.com

Linkedin.com/in/traviskahn