Crowdfunding workshop Montreal - Basic level
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  • 1. WELCOME  TO  THEBASIC LEVELmercredi 15 mai 13
  • 2. In  partnership  withmercredi 15 mai 13
  • 3. NCFAmercredi 15 mai 13
  • 4. SeedingFactory.com/connectmercredi 15 mai 13
  • 5. PART  1  –  THE  BIG  PICTURECrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 6. The  rise  of  CrowdfundingCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 7. • DefiniMon• Born  from  the  rise  of  internet  technologies  (social  networks,  web  payment,  video  sharing,  …)• Statue  of  Liberty’s  Story• Part  of  the  crowdsourcing  movementWhat’s  crowdfunding?Crowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 8. 3  Different  modelsDonation/RewardEquity LendingCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 9. What  is  the  power  of  crowdfunding?Crowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 10. • PlaWorms:• Worldwide  =  800• Canada  =  50• Market  size• $2.7  billion  (2012),  +81%  y-­‐o-­‐y• Growth  led  by  DonaMon/Reward  and  Lending  models• 2013  esMmaMon  =  $5.1  billionFact  and  FiguresCrowdfund  Workshop  –  Basic  LevelEquityLendingDonaMon/RewardMoney  raised  in  fonction  of  crowdfunding  model  ($  billion)Sources: Crowdsourcing.org,NCFAcanada.orgmercredi 15 mai 13
  • 11. Global  overviewCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 12. • Pebble  watch• First  campaign  to  raise  $10  million  (link)• Jobs  Act  in  the  US• Signed  by  Obama  in  April  2012.• Equity  Crowdfunding  in  Canada• Ontario  (OSC),  Québec  (AMF)  &  New  Brunswick• In  Canada• Indiegogo  expanded  their  business  to  Canada• Crowdfunded  Montreal  film  project  get  Oscar  nominatedRemarkable  events  in  2012Crowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 13. Who  should  consider  Crowdfunding  and  when?Crowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 14. Crowdfunding  acMvityCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 15. Most  funded  project  by  categorySpiegel  Sohmer  Internal  MeeMngmercredi 15 mai 13
  • 16. • Individuals• Inventors,  Designers,  ArMsts• Peer  to  peer  lending  is  booming• AssociaMons• ChariMes  already  used  to  raised  money  from  the  crowd• Indiegogo  partnership  with  organisaMons  • SMEs• DonaMon/Reward:  used  as  a  way  to  pre-­‐sale  a  product• Equity:  new  innovaMve  access  to  funding  What  type  of  project  ownerCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 17. • 1.  How  good  is  your  idea  –  really?  Are  you  certain  that  people  will  be  interested  in  it?• 2.  Can  you  express  your  idea  simply  and  at  the  same  Mme  get  people  excited  about  it?  If  not,  it  may  be  that  the  idea  isn’t  all  that  compelling,  or  that  you  may  not  be  the  right  person  to  present  it.• 3.  Do  you  have  something  tangible  to  show  when  presenMng  your  venture  –  some  visual  aspect  of  your  project  that  can  help  other  people  visualize  it?• 4.  Do  you  have  some  great  rewards  in  mind  to  give  backers  and  fans  incenMve  to  donate?7  quesMons  to  ask  yourselfCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 18. • 5.  Do  you  understand  all  the  personal  and  professional  demands  that  the  process  of  running  a  crowdfunding  campaign  demands  from  creators?  Are  you  prepared  to  put  110%  effort  into  making  your  crowdfunding  project  a  success?• 6.  Are  you  ready  and  able  to  take  a  big  personal  risk?• 7.  Who  can  you  turn  to  for  help,  whether  in  terms  of  assistance  with  asset  creaMon,  financial  backing,  raising  awareness  or  just  help  spreading  the  word?7  quesMons  to  ask  yourself  (cont.)Crowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 19. 5  advantages  beyond  raising  moneyCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 20. • Check  if  your  assumpMons  were  correct.• First  step  to  convince  further  investor  later  on.• Assessing  the  market  size  and  popularity.Proof  of  conceptCrowdfund  Workshop  –  Basic  Level  See  examplemercredi 15 mai 13
  • 21. Example:  Espro  PressCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 22. • Get  early  feedbacks.• Let  you  adapt  the  product/service/concept  in  real  Mme.• Find  people  willing  to  work  with  you  and  then  established  valuable  connexions.CollaboraMonCrowdfund  Workshop  –  Basic  Level  See  examplemercredi 15 mai 13
  • 23. Example:  A  year  of  adventureCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 24. • Every  contributor  become  an  evangelist• Good  to  build  a  community  around  your  project.  • You’ll  gain  highly  valuable  knowledge  about  how  to  market  your  product/service/projectMarkeMng  armyCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 25. • Replace  a  product/project  launch• The  sMll  innovaMve  aspect  of  crowdfunding  will  help  you  get  more  press  coverage• Social  networks  help  mulMply  the  outreachA  PR  boosterCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 26. Notman  HouseCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 27. • ApplicaMon  is  free.• If  you  don’t  manage  to  raised  your  goal  money  is  returned  to  each  contributor.• If  you  fail  once  it’s  easy  to  try  again• On  the  contrary  it’s  Mme  consumingIt’s  freeCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 28. Unforeseen  risksmercredi 15 mai 13
  • 29. Time  &  money  lossCrowdfund  Workshop  –  Basic  Level• Crowdfunding  is  a  full-­‐Mme  occupaMon• 2  weeks  preparaMon  (min)  x  5  weeks  crowdfunding  (average)  =  280  hours.  What’s  your  hourly  rate?  +  video  +  markeMng  costs• All-­‐or-­‐nothing  risk  on  kickstartermercredi 15 mai 13
  • 30. Burnout  riskCrowdfund  Workshop  –  Basic  Level• Crowdfunding  is  a  roller-­‐coaster• Necessity  to  have  fall-­‐back  plans• Reaching  out  to  friends,  family,  and  someMmes  personal  savings• Can  you  afford  it?mercredi 15 mai 13
  • 31. LogisMcs  riskCrowdfund  Workshop  –  Basic  Level• LogisMcs  are  hard  to  scale• If  you  have  10,000  backers  instead  of  100  backers,  ordering,  producing,  fulfilling  and  shipping  are  hard.• Missing  out  on  announced  schedulemercredi 15 mai 13
  • 32. AccounMng  &  Legal  riskCrowdfund  Workshop  –  Basic  Level• Crowdfunding  are  fun  if  you  are  asking  for  donaMon  with  no  return,  and  for  a  small  amount.• If  there’s  an  expectaMon  of  return  =  taxes.• What’s  the  best  structure  if  you  are  aiming  for  $30k?mercredi 15 mai 13
  • 33. Pros  &  Consmercredi 15 mai 13
  • 34. ProsCrowdfund  Workshop  –  Basic  Level• Needed  funding  to  design,  develop,  launch  a  product• build  a  community  of  early  adopters• get  market  validaMon• press• Team  moralemercredi 15 mai 13
  • 35. ConsCrowdfund  Workshop  –  Basic  Level• Being  on  a  popular  plaWorm  doesn’t  mean  you  will  get  contribuMons  from  the  site’s  traffic.  You  need  to  promote  yourself  the  campaign• difficult  to  crowdfund  a  non-­‐tangible  product.  Need  to  pre-­‐sale  the  product• failure  >  50%  of  campaignsmercredi 15 mai 13
  • 36. ConsCrowdfund  Workshop  –  Basic  Level• You  need  to  show  personal  vulnerability• Preparing  and  managing  a  crowdfunding  campaign  is  as  difficult  as  tradiMonal  fundraising.  It’s  not  free  money!mercredi 15 mai 13
  • 37. It’s  a  full  Ime  acIvitymercredi 15 mai 13
  • 38. Pre-­‐CampaignCrowdfund  Workshop  –  Basic  Level• Website  to  showcase  your  product  and  it’s  tangible• Need  an  acMve  community  on  twiser  and  facebook• A  video  takes  1  to  2  weeks  to  produce• Have  several  brainstorming  sessions  to  find  inspiring  perksmercredi 15 mai 13
  • 39. Pre-­‐CampaignCrowdfund  Workshop  –  Basic  Level• PR:  contact  journalists  to  tell  them  about  the  campaign• Community  acMvaMon:  contact  bloggers  and  organizaMons,  plus  potenMal  partners• Build  buzz  for  the  launch  with  smart  content  markeMngmercredi 15 mai 13
  • 40. During  the  campaignCrowdfund  Workshop  –  Basic  Level• ConMnue  outreach• Thank  contributors  and  upsell• Content  markeMng  on  the  website/twiser/facebook• Respond  to  emails/skype/meeMng  requestsmercredi 15 mai 13
  • 41. PART  2  –  BE  PREPAREDCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 42. It’s  your  turnmercredi 15 mai 13
  • 43. AcMvity  :  Do  a  benchmark  on  Kickstarter  &  Indiegogo.    1.  Type  in  keywords  relaMng  to  your  project.   2.  Choose  3  successfully  funded  campaign  on  KS  &  IGG   3.  Check  Funding  Goals,  Common  &  Original  Perks,  Creators  (origin,  legiMmity,  exisMng  networks),  Video,  Pitch.   Fill  in  the  Seeding  Factory  Canvas  BenchmarkCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 44. Choose  your  plaKormmercredi 15 mai 13
  • 45. KickstarterCrowdfund  Workshop  –  Basic  Level• Advantages:• The  most  famous  plaWorm  • Huge  trafic• Drawbacks• Only  for  US  ciMzens  (need  a  US  partner)• All-­‐or-­‐nothing  model• Exclusively  in  English• Fees• 8-­‐10%• Comments• It’s  the  best  opMon  if  you’re  targeMng  the  US  market.• Most  populat  projects  are  Video  Games  and  Filmsmercredi 15 mai 13
  • 46. IndiegogoCrowdfund  Workshop  –  Basic  Level• Advantages• Available  in  Canada  (CAD  and  in  French)• Flexible  AND  All-­‐or-­‐nothing  plans• No  selecMon• Drawbacks• Less  popular  than  Kickstarter• Fees• 8  to  13%  • Comments• Great  for  canadian  projects,  community  and  social  projects.mercredi 15 mai 13
  • 47. FundrazrCrowdfund  Workshop  –  Basic  Level• Advantages• It’s  the  biggest  Canadian  plaWorm  (based  in  BC)• Available  in  lots  of  different  languages• Drawbacks• Small  plaWorm• DonaMon  model  (not  made  to  offer  rewards/perks)  • Fees• 8%• Comments• Perfect  for  community  and  charity  projects• Spectacular  Facebook  integraMon  toolsmercredi 15 mai 13
  • 48. • Fundo• La  Plebe• Haricot• Yoyomolo• Tax  deducMon  system  included• La  Ruche  Québec• Only  for  Quebec  City  ‘project• Ecloid• Based  and  backed  by  Outaouais  regionQuebecer  plaWormsCrowdfund  Workshop  –  Basic  Level3 Montreal Platformsmercredi 15 mai 13
  • 49. • MulMplying  Mme• DiluMng  the  contribuMon  effort• It’s  confusing  for  potenMal  backersNever  run  parallel  campaignsCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 50. ComparisonCrowdfund  Workshop  –  Basic  LevelPlaKorm Fees CommentsKickstarter 8%-­‐10% Perfect  for  product  pre-­‐selling.  Target  the  US  marketIndiegogo 8%-­‐13% The  «  creaMve  »  compeMtor  of  Kickstarter.  Global  accessibility  and  presence  FundRazr 8% A  leading  Canadian  plaWorm  perfect  for  charity  projects.Local  PlaWorms5%-­‐12% For  smaller  project  (<$5000)They  usually  provide  a  lot  of  supportOwn  plaWorm 0 Technically  harder.Good  for  brands  and  organisaMons  with  an  exisMng  comunity.mercredi 15 mai 13
  • 51. • Selfstarter.us• Wordpress  plugin• OthersCreate  your  own  plaWormCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 52. Who’s  your  target?mercredi 15 mai 13
  • 53. • Who’s  your  project  is  dedicated  to?• What’s  their  purchasing  power• Are  they  comfortable  with  web  technologies  (online  payment,  social  network  acMvity)Contributor  prototypeCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 54. • How  many  of  your  friends  and  familly  are  willing  to  back  your  project?• Defining  what  kind  of  networks  could  be  reached• Start  to  pitch  your  project  to  some  of  your  relaMves/friends  &  use  those  early  feedback.Different  level  of  backersCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 55. • Collect  external  rewards  such  as  an  acknowledgment,  a  tangible  arMfact,  or  an  experience.• Help  others  and  “give.”• Be  part  of  a  community  of  like-­‐minded  people.• Support  causes  analogous  with  their  personal  beliefs.Backers  moMvaMonsCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 56. • Waste  money:  worry  that  their  money  will  not  be  used  as  effecMvely  (NA  on  all-­‐or-­‐nothing  plaWorms).• Worry  about  waiMng  for  or  not  receiving  rewards.• Don’t  want  to  be  pestered  for  support.  There’s  a  risk  of  saturaMon  Backers  unmoMvaMonsCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 57. Resource  screeningmercredi 15 mai 13
  • 58. • The  outreach  person  is  responsible  for  “business  development”• Finds,  qualifies,  and  then  proposes  winning  partnerships  to  exisMng  organizaMons  and  companies• Mostly  emailOutreach  personCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 59. • The  markeMng  person  gets  thousands  of  people  excited  about  the  campaign• Ideas:  content  markeMng,  social  media,  PR,  blogger  outreach• O|en  the  outreach  personMarkeMng  personCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 60. • Find  a  videographer  who  can  put  together  a  good  2mn  video• A  video  inspires  and  makes  people  dream...• Cinema  students,  freelancers,  friends  of  friends• Test  ideas  with  your  target  customersVideo  teamCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 61. • CreaMve:  writer,  graphic  designer,  illustrator,  photography  • Business:  accountant,  legalOtherCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 62. • Good:  get  people  to  be  inspired  by  your  project• Bad:  Ask  for  a  lot  of  work,  and  send  50  emails  a  day.  They  will  burn  out  and  you  will  finish  the  project  alone.• Best:  Inspire.  Delegate.  Have  a  calendar  and  a  list  of  todos  to  coordinate.TipsCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 63. Key  Opinion  Leader  Mappingmercredi 15 mai 13
  • 64. • Go  through  similar  campaigns,  Google  Image  search• Klout,  Followerwonk• Google  Doc  spreadsheet,  Excel• Rank  by  infuence  and  relevancyResearchCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 65. • Read  their  twiser  feed  or  blog• Find  a  hook  to  asract  their  asenMon• If  no  response,  it’s  ok.  Wait  for  another  hook  on  twiser  to  come  back• A|er  a  first  yes,  it’s  easy  to  ask  for  more  commitment.  Goal:  a  skype,  then  coverageAcMonCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 66. Your  social  powermercredi 15 mai 13
  • 67. • Wharton  Business  School  professor  Ethan  Mollick  study:– 10  friends  on  facebook  =  9%  success  rate– 100  friends  =  20%  success  rate– 1000  friends  =  40%  success  rateSocial  Mes  are  importantCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 68. • Join  the  online  communiMes  of  your  audience:  Facebook,  twiser,  Pinterest,  google+  (Youtube,  Instagram...)• Interact  with  your  audience  and  get  to  know  what  they  like  and  how  to  communicateJoin  in  the  acMonCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13
  • 69. • Be  interested  in  opinion  leaders  and  help  them  share  and  promote  what  they  are  doing.  Be  genuinely  interested.  Show  them  what  you’ve  done  for  them.• When  the  campaign  launches,  ask  opinion  leaders  to  help  share  the  campaign.  A  thank  you  goes  a  long  way• If  you  have  Mme:  Find  or  create  content  that  your  audience  will  like.Join  in  the  acMonCrowdfund  Workshop  –  Basic  Levelmercredi 15 mai 13