Starting your Etsy shop:
how to use the crowd to
fund your growth
What you need to know about navigating the world of crow...
CROWDFUNDING IN PLAIN ENGLISH
Lots of individuals contribute small amounts
... they add up to fund a creative project, a b...
3
Crowdfunding
can help lower
costs of
increasing your
etsy shop’s
profitability by
lowering cost of
goods,
expanding
qual...
IF YOU ARE
a small business in the US
looking to crowdfunding as an
alternative source of financing,
there’s good news
and ...
5
USA = the home of
crowdfunding:
60% of every $
Crowdfunded
6
So many! Just how
do you choose?
7
This Workshop.....
“101”
4 Different
models of
crowdfunding
“OMG!”
“So many sites...
how do I choose
the right one for
m...
8
This Workshop.....
“101”
4 Different
models of
crowdfunding
“OMG!”
“So many sites...
how do I choose
the right one for
m...
9
REWARDS DONATION
EQUITY
(INVESTMENT)
CROWDLENDING
4 different
models of
crowdfunding
10
REWARDS
Contribution > $X,
gets you a cool
reward from the
startup
DONATION
EQUITY
(INVESTMENT)
CROWDLENDING
11
REWARDS
DONATION
“give and
get nothing
in return but
feelgood”
EQUITY
(INVESTMENT)
CROWDLENDING
12
REWARDS DONATION
EQUITY
(INVESTMENT)
CROWDLENDING
Peer-2-peer lending
for low or no
interest
13
REWARDS DONATION
EQUITY
(INVESTMENT)
crowd earns equity,
debt, or a revenue
share for their
contributions
(pending JOBS...
14
Over the years,
models have
overlapped.
15
REWARDS DONATION
EQUITY
(INVESTMENT)
CROWDLENDING
{Note: sizes of the
circles roughly
indicate current
relative site tr...
16
REWARDS DONATION
EQUITY
(INVESTMENT)
CROWDLENDING
Note:
Sites selected for discussion are those with highest traffic in...
More and more
crowd-funding variants
every year...
17
18
This Workshop.....
“101”
4 Different
models of
crowdfunding
“OMG!”
“So many sites...
how do I choose
the right one for
...
19
Q1:
What kind of
project/ biz
is it?
20
Q1:
What kind of
project/ biz
is it?
non-profit,
good cause
Innovative
“sexy” idea
with clear
revenue
Innovative
“sexy” ...
21
Q1:
What kind of
project/ biz
is it?
non-profit,
good cause
Innovative
“sexy” idea
with clear
revenue
Innovative
“sexy” ...
Q1:
What kind of
project/ biz
is it?
non-profit,
good cause
Innovative
“sexy” idea
with clear
need, end,
and revenue
Innova...
Q1:
What kind of
project/ biz
is it?
non-profit,
good cause
Innovative
“sexy” idea
with clear
need, end,
and revenue
Innova...
Q1:
What kind of
project/ biz
is it?
non-profit,
good cause
Innovative
“sexy” idea
with clear
need, end,
and revenue
Innova...
25
Q1:
What kind of
project/ biz
is it?
non-profit,
good cause
Innovative
“sexy” idea
with clear
need, end,
and revenue
Inn...
26
Q1:
What kind of
project/ biz
is it?
non-profit,
good cause
Innovative
“sexy” idea
with clear
need, end,
and revenue
Inn...
Q1:
What kind of
project/ biz
is it?
non-profit,
good cause
Innovative
“sexy” idea
with clear
need, end,
and revenue
Innova...
WHAT
CONTRIBUTORS
RECEIVE
DONATION + REWARD
(pre-selling goods,
pre-determined rewards)
DONATION + REWARD
(pre-selling goo...
“So now I’ve chosen the
most suitable crowdfunding
site or sites for myself”...
What’s Next?
29
30
Next, Rise Above
the Noise
of all crowdfunding
campaigns fail.71.3%
31
This Webinar.....
“101”
4 Different
models of
crowdfunding
“OMG!”
“So many sites...
how do I choose
the right one for
m...
32
Don’t forget to include the crowd-funding platform
success and/or failure fees, any credit card fees (usually
2-3%), al...
33
Creative (Low cost- high desire) Reward Strategies
Initials
Mystery
Custom
34
ETSY KIVA
35
Q1:
What kind of
project/ biz
is it?
non-profit,
good cause
Innovative
“sexy” idea
with clear
need, end,
and revenue
Inn...
0% interest, zero fee crowdfunded loans <$5000
99.5% of loans posted are FULLY funded.
Any kind of small business: Cooks, ...
&
• “Etsy+kivazip” program : getting Kiva and Etsy communities to support new/growing Etsy sellers
• Getting the Etsy comm...
38
What a loan profile looks like (Ximenelle example)
39
40
What an endorsement looks like (Ximenelle example)
Questions?
- about crowdfunding options in general
- about Kiva Zip specifically
41
42
Support a local small business with a $25 loan
Zip.Kiva.org/loans
Found a trustee within your committee? Apply for a st...
Appendix:
Additional web resources on crowd-funding
(recommended)
43
44
1) Broad search:
what different crowd-funding sites exist?
2) Compare & Select:
Of the larger sites serving my type of ...
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Kiva + Etsy joint workshop: Beginners Guide to Crowdfunding Your Creative Startup

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April 2013, Kiva Zip NYC Chapter and Brooklyn, NY-based creative-handmade marketplace Etsy.com collaborated on joint education series to potential creative startups. This kicked off a deeper collaboration which eventually resulted in a formal Kiva + Etsy partnership in funding, supporting and nurturing creative entrepreneurs in July 2013. Learn more at Kiva.org/Etsy and Etsy.com/Kiva

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Kiva + Etsy joint workshop: Beginners Guide to Crowdfunding Your Creative Startup

  1. 1. Starting your Etsy shop: how to use the crowd to fund your growth What you need to know about navigating the world of crowdfunding
  2. 2. CROWDFUNDING IN PLAIN ENGLISH Lots of individuals contribute small amounts ... they add up to fund a creative project, a business or a cause ... facilitated by online, digital platforms 2
  3. 3. 3 Crowdfunding can help lower costs of increasing your etsy shop’s profitability by lowering cost of goods, expanding quality/scale/ capability
  4. 4. IF YOU ARE a small business in the US looking to crowdfunding as an alternative source of financing, there’s good news and there’s bad news. 4
  5. 5. 5 USA = the home of crowdfunding: 60% of every $ Crowdfunded
  6. 6. 6 So many! Just how do you choose?
  7. 7. 7 This Workshop..... “101” 4 Different models of crowdfunding “OMG!” “So many sites... how do I choose the right one for my biz?” Tips for your Campaign: How Not to Fail
  8. 8. 8 This Workshop..... “101” 4 Different models of crowdfunding “OMG!” “So many sites... how do I choose the right one for my biz?” Tips for your Campaign: How Not to Fail
  9. 9. 9 REWARDS DONATION EQUITY (INVESTMENT) CROWDLENDING 4 different models of crowdfunding
  10. 10. 10 REWARDS Contribution > $X, gets you a cool reward from the startup DONATION EQUITY (INVESTMENT) CROWDLENDING
  11. 11. 11 REWARDS DONATION “give and get nothing in return but feelgood” EQUITY (INVESTMENT) CROWDLENDING
  12. 12. 12 REWARDS DONATION EQUITY (INVESTMENT) CROWDLENDING Peer-2-peer lending for low or no interest
  13. 13. 13 REWARDS DONATION EQUITY (INVESTMENT) crowd earns equity, debt, or a revenue share for their contributions (pending JOBS act) CROWDLENDING
  14. 14. 14 Over the years, models have overlapped.
  15. 15. 15 REWARDS DONATION EQUITY (INVESTMENT) CROWDLENDING {Note: sizes of the circles roughly indicate current relative site traffic/ activity in 2013 according to Alexa}
  16. 16. 16 REWARDS DONATION EQUITY (INVESTMENT) CROWDLENDING Note: Sites selected for discussion are those with highest traffic in each category according to Alexa (Q1 2013), Kiva traffic from multiple Kiva domains incl Kiva.org and Kiva.org
  17. 17. More and more crowd-funding variants every year... 17
  18. 18. 18 This Workshop..... “101” 4 Different models of crowdfunding “OMG!” “So many sites... how do I choose the right one for my biz?” Tips for your Campaign: How Not to Fail
  19. 19. 19 Q1: What kind of project/ biz is it?
  20. 20. 20 Q1: What kind of project/ biz is it? non-profit, good cause Innovative “sexy” idea with clear revenue Innovative “sexy” idea - uncertain success Not “sexy” but clear revenue No plan yet, just bet on ME
  21. 21. 21 Q1: What kind of project/ biz is it? non-profit, good cause Innovative “sexy” idea with clear revenue Innovative “sexy” idea - uncertain success Not “sexy” but clear revenue No plan yet, just bet on ME
  22. 22. Q1: What kind of project/ biz is it? non-profit, good cause Innovative “sexy” idea with clear need, end, and revenue Innovative “sexy” idea - uncertain rev$, date of completion Not “sexy” but clear rev $, just needs capital No plan yet, just bet on ME!
  23. 23. Q1: What kind of project/ biz is it? non-profit, good cause Innovative “sexy” idea with clear need, end, and revenue Innovative “sexy” idea - uncertain rev$, date of completion Not “sexy” but clear rev $, just needs capital No plan yet, just bet on ME! Q2: Belongs to these 13 categories: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, or Theatre? Y
  24. 24. Q1: What kind of project/ biz is it? non-profit, good cause Innovative “sexy” idea with clear need, end, and revenue Innovative “sexy” idea - uncertain rev$, date of completion Not “sexy” but clear rev $, just needs capital No plan yet, just bet on ME! Q2: Belongs to these 13 categories: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, or Theatre? N
  25. 25. 25 Q1: What kind of project/ biz is it? non-profit, good cause Innovative “sexy” idea with clear need, end, and revenue Innovative “sexy” idea - uncertain rev$, date of completion Not “sexy” but clear rev $, just needs capital No plan yet, just bet on ME! Q2: Belongs to these 13 categories: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, or Theatre? Y N Q3: Definitely requires loan $5,000-35,000 AND your Credit Score > 600 Y
  26. 26. 26 Q1: What kind of project/ biz is it? non-profit, good cause Innovative “sexy” idea with clear need, end, and revenue Innovative “sexy” idea - uncertain rev$, date of completion Not “sexy” but clear rev $, just needs capital No plan yet, just bet on ME! Q2: Belongs to these 13 categories: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, or Theatre? Y N Q3: Definitely requires loan $5,000-35,000 AND your Credit Score > 600 Y N
  27. 27. Q1: What kind of project/ biz is it? non-profit, good cause Innovative “sexy” idea with clear need, end, and revenue Innovative “sexy” idea - uncertain rev$, date of completion Not “sexy” but clear rev $, just needs capital No plan yet, just bet on ME! Q2: Belongs to these 13 categories: Art, Comics, Dance, Design, Fashion, Film, Food, Games, Music, Photography, Publishing, Technology, or Theatre? Y N Q3: Definitely requires loan $5,000-35,000 AND your Credit Score > 600 Y N
  28. 28. WHAT CONTRIBUTORS RECEIVE DONATION + 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 of revenue) INVESTMENT (equity, share of revenue) NON-PROFIT (purely emotional/ feel-good) NON-PROFIT (purely emotional/ feel-good) Main players Kickstarter Indiegogo rockethub Upstart Prosper Kiva Zip Causes.com Size / Volume (ave $ fundraising p/day) $1.04mil n/a n/a n/a $330K $500k (all Kiva) $24k (Zip only) n/a Failure to meet Goal % 56% 90% on projects > $1000 N/a non goal- oriented site Varies - est 50% 0.5% non goal- oriented site Fundraising limits (Whether donation/Loan) No limit No limit No limit Varies: $100 up to$20,000 for experienced depends on credit score, $35,000 max 1st loan $5000 No limit Platform Cost ($paid directly to platform) 5% 4% if goal met 9% if goal not met 4% if goal met 8% if goal not met 3% Fees vary by Prosper rating 0.5%-5% FREE No interest No commission FREE No interest No commission Other expenses (not paid to site but incurred based on platform’s model) Video + Reward + 3-5% credit card processing Video + Reward + 3-5% credit card processing Video + Reward + 4% credit card processing (only late fees) Interest rate varies: 9%-35% APR FREE Paypal-Kiva transactions free 4.75% credit card processing Financial Criteria / eligibility No No No min FICO score > 640 min credit score > 600 Character endorsement No Type of business’ restrictions Art, comics, dance, design, fashion, film, food, video, games, photo, publishing, tech, theatre No Not only arts, but largest crowd- funder for Science and Academic projects College Grads only No No GuideStar- verified and active 501(c)(3) nonprofits Quick overview of numbers (size, fees, costs, limits, etc) {note: best avail numbers at Mar 2013, please verify for yourself}
  29. 29. “So now I’ve chosen the most suitable crowdfunding site or sites for myself”... What’s Next? 29
  30. 30. 30 Next, Rise Above the Noise of all crowdfunding campaigns fail.71.3%
  31. 31. 31 This Webinar..... “101” 4 Different models of crowdfunding “OMG!” “So many sites... how do I choose the right one for my biz?” Tips for your Campaign: How Not to Fail
  32. 32. 32 Don’t forget to include the crowd-funding platform success and/or failure fees, any credit card fees (usually 2-3%), all reward costs and reward delivery costs. BUDGET Find rewards that are exclusive but not costly - name an ice cream flavor after donors who give >$200, free farm tours, studio tours or concert passes, collectables, etc. COOLrewards CRAFTyour story w/TLC BUDGET*BUDGET Watch videos, look at photos or read stories that do well. Learn. Write your own story. Improve it. Run it by people who don’t know you well. Improve it again. HEART Marketing with no marketing budget is always about social media heart & hustle. Ask friends to share your campaign. Ask influentials to retweet you/email intro you to others. The more people you ask, the luckier you get in social media. &HUSTLE
  33. 33. 33 Creative (Low cost- high desire) Reward Strategies Initials Mystery Custom
  34. 34. 34 ETSY KIVA
  35. 35. 35 Q1: What kind of project/ biz is it? non-profit, good cause Innovative “sexy” idea with clear need, end, and revenue Innovative “sexy” idea - uncertain rev$, date of completion Not “sexy” but clear rev $, just needs capital No plan yet, just bet on ME! Q3: Definitely requires loan $5,000-35,000 AND your Credit Score > 600 Y N Your best option is Kiva Zip if... ....If you’re an everyday small business or startup with a clear business plan AND .....you could use a 0% interest zero fee small loan <$5000 to help your business start/ grow more profitably....
  36. 36. 0% interest, zero fee crowdfunded loans <$5000 99.5% of loans posted are FULLY funded. Any kind of small business: Cooks, farmers, craftmakers, coffeeshops, home contractors, beauticians, landscapers, cleaners, etc. “Just everyday small businesses funded directly by ordinary people’s generosity - facilitated directly online. No one makes money but you.” 36
  37. 37. & • “Etsy+kivazip” program : getting Kiva and Etsy communities to support new/growing Etsy sellers • 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 • No bank, no interest no fees.So far 3 Etsy sellers on Kiva Zip, more on the way 37 $3,000 loan to hire a stay- at-home mom to help with yarn-making, hire pro photographer Ximenelle Yarn Shop $5,000 loan to expand range to bridal accessories + marketing outreach PRINCESS PUDDLE DUCK hairbows $5000 loan for cold vending cart & equipment for festivals HEALCREST URBAN FARM Herbal Teas
  38. 38. 38
  39. 39. What a loan profile looks like (Ximenelle example) 39
  40. 40. 40 What an endorsement looks like (Ximenelle example)
  41. 41. Questions? - about crowdfunding options in general - about Kiva Zip specifically 41
  42. 42. 42 Support a local small business with a $25 loan Zip.Kiva.org/loans Found a trustee within your committee? Apply for a starter loan <$5000 Justin@kiva.org (coming soon) Etsypluskivazip web hub
  43. 43. Appendix: Additional web resources on crowd-funding (recommended) 43
  44. 44. 44 1) Broad search: what different crowd-funding sites exist? 2) Compare & Select: Of the larger sites serving my type of biz, which one(s) suit my needs (size, speed)& resources best 3) Free Tips: How to activate the crowd and minimize wasting time and money? http://www.rockethub.com/education Rockethub Success School
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