REMIX SUMMIT-Virginia Buckley, Co-Founder, Culture Crowd


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REMIX Day 2- Crowd Funding-Virginia Buckley, Co-Founder, Culture Crowd

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REMIX SUMMIT-Virginia Buckley, Co-Founder, Culture Crowd

  1. 1. Penny Nagle & Ginny Buckley
  2. 2. CultureCrowd is… •  A consultancy that works with producers to create successful Equity Crowdfunding campaigns •  Penny Nagle, Ginny Buckley & Conor Roche - active in London & Hong Kong •  Free to download AHRC/Clore funded Research Paper published August 2013
  3. 3. Reward Crowdfunding vs Equity Crowdfunding (ECF) Reward       How  old?     4  years   £   Donate  from  £1   Receive?     Perk   Producer  Ownership?    100%   ECF   1  year   Invest  from    £10   ROI  +  Perk  =  Hybrid   Reduces     Suitability     Small  scale,  not  for  profit,  amateur   Large  scale,  professional   Pla>orm  fees   5%  of  Value  Investment   Main  Pla>orms     Kickstarter,,  Indiegogo  Seedrs,  Crowdcube   Cultural  Projects   Yes  lots   Av  5-­‐7.5%  of  Value  Investment     4-­‐5  total  –  no  complete  cycles  yet  
  4. 4. CultureCrowd loves ECF because… •  There’s nothing new under the sun…Marillion, David Bowie, Age of Stupid •  But online ECF radically changes the model - invest from as little as £10 •  UK has an advantage – World’s 1st FCA regulated equity crowdfunding arena •  Connects audience and investors •  Tech platforms more transparent, accountable & efficient
  5. 5. But… •  Investment Readiness + Maintaining Control •  Unsuitable for amateur entrepreneur •  Experienced Arts Investors Required? •  Cost of compliance and danger of litigation
  6. 6. How much does it cost to crowdfund? •  Producers success fees •  •  •  •  •  •  •  Financial transaction fees Cost of making & delivering donor ‘rewards’ Management fees to 3rd parties, PRs Tax liabilities ECF legal fees ECF Due Diligence ECF Intermediary services
  7. 7. Case Study : Reward CF Veronica Mars 2013 •  •  •  •  •  •  US based Kickstarter campaign, i.e Reward only 13 Mar – 12 April 2013 Pitched for US$2M, raised 2.5M in first 48 hours of campaign Eventually raised $5,702,153 from 91,585 backers To date there are 20, 682 comments on the Kickstarter campaign page Quickly followed by pitches from Zach Braff & Spike Lee and accompanied by a backlash
  8. 8. ECF Case Study Happy Days 2013 Commercial UK Theatre tour Oct 13 Raising investment £250K on ECF platform Seedrs (UK) Invest for as little as £10 on industry standard terms Challenges of sector specific investment on non-specialist platform with atypical investors •  The online dragons den •  •  •  • 
  9. 9. ECF Case Study Wind in the Willows •  October 2013 dedicated website •  £650K offered of total £6.5M budget, investment offered at fixed levels £1K, £2.5K & £5K •  Costs of promotion, legal, due diligence, FCA compliance, website & design
  10. 10. ECF Case Study Train Fever •  Video Game - Train/Railroad (Management) Simulator (on •  50% share of total sales revenue offered •  Raised €250.000 from 651 investors from various countries •  Ranging from €20 - €20.000 investments •  Investors are: •  Fans (train-enthusiasts; lively suggestions and feedback discussions (still) going on on the platform) •  Investors who see the quality and enthusiasm of the crowd •  2nd tier network of development team •  Gambitious’ publishing branch is also publishing the title (exp. release May 2014)
  11. 11. Characteristics of successful campaigns Monetise an existing following - a great brand, social media profile or •  other compelling story •  Combine on and offline investors – match fund •  Be all over your campaign all the time, Equity investors are as motivated by the performance of the entrepreneur/ producer as they are by the product •  Post campaign strategy to manage investors afterwards
  12. 12. Could ECF be part of the solution? “There will always be a large number of micro-businesses in the sector. From a purely creative point of view, small is both beautiful and productive. Creative talent flourishes best in relatively small and highly flexible units. However creative excellence does not guarantee commercial success. In a competitive global market small, weak, projectbased business units are vulnerable to the effects of under-capitalisation, loss of clients, adverse currency fluctuations and the withdrawal of inward investment.” Extract from Ingenious Media paper submitted to Hse of Commons Select Committee 2008
  13. 13. ECF: What If? Next 5 Years …. •  Niche platforms? Gambitious,, Arts specific? •  Professional Intermediaries & other CF service businesses •  Social Finance instruments adapted for use by arts/ creative industries •  Mini-markets - Symbid certificate trading •  Big Data – more analysis & audiences participating directly in culture they want •  Netflix
  14. 14. Thankyou – Feedback @culturecrowd