An introduction to crowdfunding

Tim Stansky

@timstansky

November 2012

This presentation offers an overview of crowdfunding with

an emphasis on the rewards model and a case study of

“Crowdfunding Innovation”, a special Mass Innovation Nights

event.

When the JOBS Act is in full swing there will be lots of room

for “teachable moments”, unsavory types, and success.

What is crowdfunding?A tool that gives entrepreneurs the opportunity to attract a pool of people via social media or shared interests in order to contribute to a funding target that has been previously established by the entrepreneur. (11/6/12 Forbes article link)

The JOBS Act

The Jumpstart Our Business Startups Act or JOBS Act, is a law intended to encourage funding of United States small businesses by easing some securities regulations. It passed with bipartisan support and was signed into law by President Barack Obama on April 5, 2012. (link to legislation)

Current Models

Rewards Equity Lending Donation

Protect orphans and widows

How Much Can I Invest?Everyone can invest at least $2,000/year.

If an investor makes less than $100,000/year or have less than $100,000 in assets, they can invest 5% of that each year.

For example, if I make $80,000/year, I will be able to invest $4,000/year in startups.

If an investor makes less than $200,000/year or has less than $200,000 in assets, they can invest 10% of that each year.

For example, if I make $150,000/year, I can invest $15,000/year in startups.

If an investor makes more than $200,000/year they are considered and accredited investor, and can basically invest as much as they want.

Platforms

This is nothing new. Joseph Pulitzer’s crowdfunding

campaign generated an awe-inspiring $100,000

in five short months through micro donations.

The most incredible aspect of his

campaign is that the over 120,000 donations were in most cases less

than a dollar.

(Statue of Liberty crowdfunding story link)

The founders of these ventures shared their insight and experience in planning the project, defining project goals or objectives, necessity of preparation, and offered hard-earned advice from lessons learned.

Panel Conversation moderated by the Boston Business Journal’s Kyle Alspach with three Mass Inno alumni who successfully funded crowdfunding projects on Kickstarter: LifeCycle Bracelets, Memory On Hand, and Ministry of Supply. (link to video)

Kingsley Flood

FUNDED!

6% FUNDED!My TV 38 in Feb

‘13

2% FUNDED! 5%

FUNDED! gaining equity followers

actively pre-selling orders

19% $8k to date 7%

Why are they doing this?

fan engagement

pre-sales

marketing

SEO, mentions

hipster factor

Anatomy of a campaign

the project

apply to the platform

designing the rewards

prep work for launch, video!

trajectory through influencers

fulfillment and nurturing

Considerations & sleep loss

legal and tax issues

supply chain and fulfillment

a compelling video

satisfying 200 equity holders

can I sell my equity?

Hello from PledgeMusic,Kingsley Flood posted a new update for Be a part of our new full-length album:EPISODE 5: (re)Arranging, or, Saved by the Bell and cats Alright folks, 60% with 25 days left. Thanks so much…we’re getting there…but of course we’re not quite there yet, so if you have friends you’ve brought to shows or just into music, we’d love if you told them about the campaign. They can pledge as little as $10 (awesome!) or go up to $1,000 (more awesome!).But since you all are already champs, enough chit chat. Instead, you get this week’s video from the studio.This is Episode 5: (re)Arranging. It explores what happens when we start off not excited about a song, and end up very excited about it.Lots of things contributed to this: a cocktail party, tubular bells, Saved by the Bell, etc. The thing we’re probably most excited about is the shirt Nick wears while he narrates this. And the special relationship he has with his cat.Thanks for watching, pledging, being, etc.This update includes: 1 video and 3 images.View the full update.Loving your work. Team Pledge

http://www.pledgemusic.com/projects/kingsleyflood/updates/13422?utm_campaign=project4999&utm_medium=email&utm_source=pledgemusic

Best ways to learn

back a project and go

for the ride

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Tim Stansky @timstanskywww.wickedbostonaccent.wordpress.com