Bootstrapping,Crowdfunding, Hackathons& CompetitionsFunding Models
Bootstrapping• Use of personal, friends/family funds to launch idea• Most common and least costly startup funding• Cost-sa...
BootstrappingQuestions to potential bootstrappers:1.What is your definition? Does it include angel moneyor government gran...
CrowdfundingBuilds off the crowdsourcingapproach to funding. Collectiveeffort to raise money throughnetworks without finan...
CrowdfundingPros•Access to funding (for ideas which maynot have fit the requirements oftraditional investors)•Ability to "...
HackathonsAlso known as: Hack Day, Hackfest, Codefest•Gathering of computer programmers, designers, andtech-savvy concerne...
HackathonsExamples:“Random Hacks of Kindness” a Hackathon devoted todisaster management & crisis responseFacebook internal...
CompetitionsTypical requirements•Why does your concept answer prompt or topic?•Proposal or Essay•Impact•Scope & Scale•Succ...
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Funding models

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Bootstrapping, Crowdfunding, Hackthons & Competitions

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Funding models

  1. 1. Bootstrapping,Crowdfunding, Hackathons& CompetitionsFunding Models
  2. 2. Bootstrapping• Use of personal, friends/family funds to launch idea• Most common and least costly startup funding• Cost-saving strategies: working digitally, bartering, non-monetary compensation. • Maximizing sales to existing customers • Low-cost, viral marketing• Creative control, but growth limited to funds available vs. outside funding, less control/equity, and more potential growth• Best suited to areas/ideas that can grow incrementally and independently
  3. 3. BootstrappingQuestions to potential bootstrappers:1.What is your definition? Does it include angel moneyor government grants? Either way, you must bedisciplined with finances.2.What is your tolerance for cash flow crunches? Canyou rely on new loans or lines of credit?3. What is the opportunity in your sector? What is thesales cycle and revenue? Will your product bedisruptive and will investors wait through the ups anddowns?4.How important is control of your company?Fundraising is time-consuming, but investors wantreturn on their investment,
  4. 4. CrowdfundingBuilds off the crowdsourcingapproach to funding. Collectiveeffort to raise money throughnetworks without financers ordirect investors (i.e. Kickstarter,Indiegogo, Kiva)3 Models•Donations, Philanthropy &Sponsorship•Lending•Investment
  5. 5. CrowdfundingPros•Access to funding (for ideas which maynot have fit the requirements oftraditional investors)•Ability to "produce an accurateaggregate prediction" about marketoutcomes (Wisdom of Crowds)•Increase in available venture capital•Inexpensive•Platform serves as marketing toolCon•Requires you to disclose idea for whichfunding at early stage•Often a limited amount of funding youcan raise
  6. 6. HackathonsAlso known as: Hack Day, Hackfest, Codefest•Gathering of computer programmers, designers, andtech-savvy concerned citizens•One idea or goal set, teams based on interest or skills,contest like elements•Software, mobile apps, web, video gamesFive reasons a start-up should have a hackathon:1. You get things done2. You have a deadline that won’t be met otherwise3. They promote team-building4. You see who’s really “in it”5. They’re fun
  7. 7. HackathonsExamples:“Random Hacks of Kindness” a Hackathon devoted todisaster management & crisis responseFacebook internal hackathon produced the“like” featurehackNY (http://hackny.org/a/) - started by NYU andColumbia to bring tech students togetherWebsites/Apps from Hackathons:Govpulse, areyousafe, thisweknow, seeclickfix,fixmystreet, crisiscommons, geocommons,frontlinesms, tilemill
  8. 8. CompetitionsTypical requirements•Why does your concept answer prompt or topic?•Proposal or Essay•Impact•Scope & Scale•Success Indicators•Budget & Resources•Team BiosPros•Exposure•Large amounts of funding available•Encourages timeline of deliverablesCons•Different requirements for each competition•Adjust proposal for each competition•Large time commitment & risk of no funding

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