Etsy + Kiva Zip Workshop: How to Crowdfund your 1st Etsy Startup
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  • 1. “So you want tocrowdfund yourEtsy shop?”What you need to know about navigating the world of crowdfunding
  • 2. CROWDFUNDING IN PLAIN ENGLISHLots of individuals contribute small amounts... they add up to fund a creative project, a business or a cause... facilitated by online, digital platforms2
  • 3. 3Crowdfundingcan help lowercosts ofincreasing youretsy shop’sprofitability bylowering cost ofgoods,expandingquality/scale/capability
  • 4. IF YOU AREa small business in the USlooking to crowdfunding as analternative source of financing,there’s good newsand there’s bad news.4
  • 5. 5USA = the home ofcrowdfunding:60% of every $Crowdfunded
  • 6. 6So many! Just howdo you choose?
  • 7. 7This Webinar.....“101”4 Differentmodels ofcrowdfunding“OMG!”“So many sites...how do I choosethe right one formy biz?”Tips for yourCampaign:How Not toFail
  • 8. 8This Webinar.....“101”4 Differentmodels ofcrowdfunding“OMG!”“So many sites...how do I choosethe right one formy biz?”Tips for yourCampaign:How Not toFail
  • 9. 9REWARDS DONATIONEQUITY(INVESTMENT)CROWDLENDING4 differentmodels ofcrowdfunding
  • 10. 10REWARDSContribution > $X,gets you a coolreward from thestartupDONATIONEQUITY(INVESTMENT)CROWDLENDING
  • 11. 11REWARDSDONATION“give andget nothingin return butfeelgood”EQUITY(INVESTMENT)CROWDLENDING
  • 12. 12REWARDS DONATIONEQUITY(INVESTMENT)CROWDLENDINGPeer-2-peer lendingfor low or nointerest
  • 13. 13REWARDS DONATIONEQUITY(INVESTMENT)crowd earns equity,debt, or a revenueshare for theircontributions(pending JOBS act)CROWDLENDING
  • 14. 14Over the years,models haveoverlapped.
  • 15. 15REWARDS DONATIONEQUITY(INVESTMENT)CROWDLENDING{Note: sizes of thecircles roughlyindicate currentrelative site traffic/activity in 2013according to Alexa}
  • 16. 16REWARDS DONATIONEQUITY(INVESTMENT)CROWDLENDINGNote:Sites selected for discussion are those with highest traffic in each category according to Alexa (Q1 2013),Kiva traffic from multiple Kiva domains incl Kiva.org and Kiva.org
  • 17. More and morecrowd-funding variantsevery year...17
  • 18. 18This Webinar.....“101”4 Differentmodels ofcrowdfunding“OMG!”“So many sites...how do I choosethe right one formy biz?”Tips for yourCampaign:How Not toFail
  • 19. 19Q1:What kind ofproject/ bizis it?
  • 20. 20Q1:What kind ofproject/ bizis it?non-profit,good causeInnovative“sexy” ideawith clearrevenueInnovative“sexy” idea -uncertainsuccessNot “sexy”but clearrevenueNo plan yet,just bet onME
  • 21. 21Q1:What kind ofproject/ bizis it?non-profit,good causeInnovative“sexy” ideawith clearrevenueInnovative“sexy” idea -uncertainsuccessNot “sexy”but clearrevenueNo plan yet,just bet onME
  • 22. Q1:What kind ofproject/ bizis it?non-profit,good causeInnovative“sexy” ideawith clearneed, end,and revenueInnovative“sexy” idea -uncertainrev$, date ofcompletionNot “sexy”but clear rev$, just needscapitalNo plan yet,just bet onME!
  • 23. Q1:What kind ofproject/ bizis it?non-profit,good causeInnovative“sexy” ideawith clearneed, end,and revenueInnovative“sexy” idea -uncertainrev$, date ofcompletionNot “sexy”but clear rev$, just needscapitalNo plan yet,just bet onME!Q2:Belongs to these 13 categories:Art, Comics, Dance, Design,Fashion, Film, Food, Games,Music, Photography, Publishing,Technology, or Theatre?Y
  • 24. Q1:What kind ofproject/ bizis it?non-profit,good causeInnovative“sexy” ideawith clearneed, end,and revenueInnovative“sexy” idea -uncertainrev$, date ofcompletionNot “sexy”but clear rev$, just needscapitalNo plan yet,just bet onME!Q2:Belongs to these 13 categories:Art, Comics, Dance, Design,Fashion, Film, Food, Games,Music, Photography, Publishing,Technology, or Theatre? N
  • 25. 25Q1:What kind ofproject/ bizis it?non-profit,good causeInnovative“sexy” ideawith clearneed, end,and revenueInnovative“sexy” idea -uncertainrev$, date ofcompletionNot “sexy”but clear rev$, just needscapitalNo plan yet,just bet onME!Q2:Belongs to these 13 categories:Art, Comics, Dance, Design,Fashion, Film, Food, Games,Music, Photography, Publishing,Technology, or Theatre?YNQ3:Definitely requires loan$5,000-35,000 AND your CreditScore > 600Y
  • 26. 26Q1:What kind ofproject/ bizis it?non-profit,good causeInnovative“sexy” ideawith clearneed, end,and revenueInnovative“sexy” idea -uncertainrev$, date ofcompletionNot “sexy”but clear rev$, just needscapitalNo plan yet,just bet onME!Q2:Belongs to these 13 categories:Art, Comics, Dance, Design,Fashion, Film, Food, Games,Music, Photography, Publishing,Technology, or Theatre?YNQ3:Definitely requires loan$5,000-35,000 AND your CreditScore > 600YN
  • 27. Q1:What kind ofproject/ bizis it?non-profit,good causeInnovative“sexy” ideawith clearneed, end,and revenueInnovative“sexy” idea -uncertainrev$, date ofcompletionNot “sexy”but clear rev$, just needscapitalNo plan yet,just bet onME!Q2:Belongs to these 13 categories:Art, Comics, Dance, Design,Fashion, Film, Food, Games,Music, Photography, Publishing,Technology, or Theatre?YNQ3:Definitely requires loan$5,000-35,000 AND your CreditScore > 600YN
  • 28. WHATCONTRIBUTORSRECEIVEDONATION + REWARD(pre-selling goods,pre-determined rewards)DONATION + REWARD(pre-selling goods,pre-determined rewards)DONATION + REWARD(pre-selling goods,pre-determined rewards)INVESTMENT(equity, share ofrevenue)INVESTMENT(equity, share ofrevenue)NON-PROFIT(purely emotional/feel-good)NON-PROFIT(purely emotional/feel-good)Main playersKickstarter Indiegogo rockethub Upstart Prosper Kiva Zip Causes.comSize / Volume(ave $ fundraising p/day)$1.04mil n/a n/a n/a $330K$500k (all Kiva)$24k (Zip only) n/aFailure to meetGoal %56%90%on projects >$1000N/anon goal-oriented siteVaries -est 50%0.5%non goal-oriented siteFundraising limits(Whether donation/Loan)No limit No limit No limitVaries: $100 upto$20,000 forexperienceddepends oncredit score,$35,000 max1st loan$5000No limitPlatform Cost($paid directly to platform)5%4% if goal met9% if goal notmet4% if goal met8% if goal notmet3%Fees vary byProsper rating0.5%-5%FREENo interestNo commissionFREENo interestNo commissionOther expenses(not paid to site but incurredbased on platform’s model)Video +Reward + 3-5%credit cardprocessingVideo +Reward + 3-5%credit cardprocessingVideo +Reward + 4%credit cardprocessing(only latefees)Interest ratevaries:9%-35% APRFREEPaypal-Kivatransactions free4.75% creditcardprocessingFinancialCriteria / eligibilityNo No Nomin FICOscore > 640min creditscore > 600CharacterendorsementNoType ofbusiness’restrictionsArt, comics,dance, design,fashion, film,food, video,games, photo,publishing, tech,theatreNoNot only arts, butlargest crowd-funder forScience andAcademicprojectsCollegeGrads onlyNo NoGuideStar-verified andactive 501(c)(3)nonprofitsQuick overview of numbers (size, fees, costs, limits, etc){note: best avail numbers at Mar 2013, please verify for yourself}
  • 29. “So now I’ve chosen themost suitable crowdfundingsite or sites for myself”...What’s Next?29
  • 30. 30Next, Rise Abovethe Noiseof all crowdfundingcampaigns fail.71.3%
  • 31. 31This Webinar.....“101”4 Differentmodels ofcrowdfunding“OMG!”“So many sites...how do I choosethe right one formy biz?”Tips for yourCampaign:How Not toFail
  • 32. 32Don’t forget to include the crowd-funding platformsuccess and/or failure fees, any credit card fees (usually2-3%), all reward costs and reward delivery costs.BUDGETFind rewards that are exclusive but not costly - name anice cream flavor after donors who give >$200, free farmtours, studio tours or concert passes, collectables, etc.COOLrewardsCRAFTyour story w/TLCBUDGET*BUDGETWatch videos, look at photos or read stories that do well.Learn. Write your own story. Improve it. Run it bypeople who don’t know you well. Improve it again.HEARTMarketing with no marketing budget is always aboutsocial media heart & hustle. Ask friends to share yourcampaign. Ask influentials to retweet you/email introyou to others. The more people you ask, the luckier youget in social media.&HUSTLE
  • 33. 33ETSY KIVA
  • 34. 34Q1:What kind ofproject/ bizis it?non-profit,good causeInnovative“sexy” ideawith clearneed, end,and revenueInnovative“sexy” idea -uncertainrev$, date ofcompletionNot “sexy”but clear rev$, just needscapitalNo plan yet,just bet onME!Q3:Definitely requires loan$5,000-35,000 AND your CreditScore > 600YNYour best option is Kiva Zip if.......If you’re an everyday smallbusiness or startup with a clearbusiness planAND.....you could use a 0% interestzero fee small loan <$5000 to helpyour business start/ grow moreprofitably....
  • 35. 0% interest, zero fee crowdfunded loans <$500099.5% of loans posted are FULLY funded.Any kind of small business: Cooks, farmers,craftmakers, coffeeshops, home contractors,beauticians, landscapers, cleaners, etc.“Just everyday small businessesfunded directly by ordinary people’sgenerosity - facilitated directly online.No one makes money but you.”35
  • 36. &• “Etsy+kivazip” progam• Getting Kivaʼs ʻcrowdʼ of lenders to support Etsy sellers become self-sustaining• Getting the Etsy community teams to publicly endorse great sellers for interest-free loans• Because they are ʻvouched forʼ qualify for a <$5000 zero interest zero fee crowdfunded loan• funded by a base of 1.3mil registered Kiva lenders from around the world• So far 3 Etsy sellers on Kiva Zip, more on the way36$3,000 loan to hire a stay-at-home mom to help withyarn-making, hire prophotographerXimenelleYarn Shop$5,000 loan to expandrange to bridalaccessories + marketingoutreachPRINCESS PUDDLEDUCKhairbows$5000 loan for cold vending cart& equipment for festivalsHEALCREST URBANFARMHerbal Teas
  • 37. 37
  • 38. What a loan profile looks like (Ximenelle example)38
  • 39. 39What an endorsement looks like (Ximenelle example)
  • 40. Questions?- about crowdfunding options in general- about Kiva Zip specifically40
  • 41. 41Support a local small business with a $25 loanZip.Kiva.org/loansFound a trustee within your committee? Apply for a starter loan <$5000Justin@kiva.org(coming soon)Etsypluskivazip web hub
  • 42. Appendix:Additional web resources on crowd-funding(recommended)42
  • 43. 431) Broad search:what different crowd-funding sites exist?2) Compare & Select:Of the larger sites serving my type of biz, whichone(s) suit my needs (size, speed)& resources best3)Free Tips:How to activate thecrowd and minimizewasting time andmoney?http://www.rockethub.com/educationRockethub Success School