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Cogswell College - Handson Crowdfunding Workshop - March 29

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Crowdfunding is becoming a formidable new way to fund new entrepreneurial projects and companies – particularly for creative projects and innovative design products.

But this new world of crowdfunding has a new set of rules, and requires new techniques and approaches – from crafting a pitch to creating videos to new legal and marketing issues.

In this workshop, you’ll learn, hands on: How to prepare your idea or company to attract crowdfunding; How to conduct a successful crowdfunding campaign using social media, and How to leverage your crowdfunding campaign into broader entrepreneurial success.

You’ll learn the best-practices and methods of writing to attract funding, and to create a compelling crowdfunding video yourself, using low cost equipment and free software tools.

- See more at: http://entblog.cogswell.edu/crowdfundingworkshop-march

Published in: Economy & Finance, Business
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Cogswell College - Handson Crowdfunding Workshop - March 29

  1. 1. CROWDFUNDING has arrived! Cogswell College of Silicon Valley – CJ Cornell @CogswellCollege C.J. Cornell @cjcornell Cogswell Polytechnical College @Cogswell_Ent
  2. 2. CJ Cornell is ...
  3. 3. concept IPO (market share, revenues etc ) Product (Risk, growth) Entrepreneurial Growth concept->product->market->profit $ $ $ $ Venture Capital Angels (accelerators/incubators)
  4. 4. $28+ Billion that’s with a “B”
  5. 5. 3,900 VC deals in 2013
  6. 6. 1,900 # seed/early stage deals
  7. 7. 1,900 # lottery millionares in US each year
  8. 8. Source: http://theyec.org/making-sense-of-the-jobs-act-and-crowdfunding-infographic/
  9. 9. Crowdfunding Crowdfunding concept IPO (market share, revenues etc ) Product (Risk, growth) Entrepreneurial Growth concept->product->market->profit $ $ $ $ Venture Capital Angels (accelerators/incubators) Crowdfunding Crowdfunding
  10. 10. What is Crowdfunding ?
  11. 11. The safety of crowds The passion of crowds The wisdom of the crowds Crowdfunding
  12. 12. Crowd FUNDING: (1) soliciting & collecting relatively small amounts of money (“funding”) from a large number of people (“the crowd”)
  13. 13. Crowd FUNDING: (2) many individuals (the crowd) coming together to support* ideas** by other individuals and organizations. Support=Funding,feedback,expertise,connectionsandmore Ideas=concepts,projects,products,activities,services,,causes,eventsetc…
  14. 14. • Source – http;//crowdfunder.com Currently “kinda-sorta” legal in US – Sept 23rd 2013
  15. 15. Equity Crowdfunding ... is here
  16. 16. Jumpstart our Business Startup (JOBS) Act 5 April 2012 (& Aug 2012, & Dec 2012 ….)
  17. 17. • Equity Crowdfunding - not (really) in the USA yet. • JOBS act (April 2012) technically enables CF – but has not yet been approved by SEC. • No documented fraud in USA or other areas. • Equity CF is for “high growth companies” seeking significant funding from experienced investors • Will dramatically change in 3-5 years (CJ prediction) www.propelarizona.com WYNTK(what you need to know)
  18. 18. September 23rd This is both GREAT news and BAD news 1. “General Solicitation” is allowed 2. But “Accredited Investors” ONLY 3. You must FILE w/SEC Prior 4. Investors must provide documentation SEC Changes some 80-year old rules (“506c”)
  19. 19. Rewards based, “contribution” crowdfunding The Kickstarter model – ‘donations’
  20. 20. “THE KICKSTARTER MODEL” Rewards-based, Donation Crowdfunding:
  21. 21. ALL OR NOTHING
  22. 22. Perks & Rewards
  23. 23. Updates (and Blogging)
  24. 24. Updates (and Blogging)
  25. 25. Comments & Engagement
  26. 26. Source: http://KickstartersHQ.com
  27. 27. WHY … Do people Crowdfund?
  28. 28. Lessons from Ethan Mollick’s “The Dynamics of Crowdfunding: Determinants of Success and Failure”
  29. 29. 3 Why’s: 1. They connect to the greater purpose of the campaign 2. They connect to a physical aspect of the campaign like the rewards 3. They connect to the creative display of the campaign’s presentation three main reasons why people unconnected to a project or business would support it: What Is Crowdfunding And How Does It Benefit The Economy - Forbes http://www.forbes.com/sites/tanyaprive/2012/11/27/what-is-crowdfunding-and-how-does-it-benefit-the-economy
  30. 30. The Real (Crowdfunding) Why’s • Passion – For the technology – For the industry – For the cause – For the product • Affinity – For the Entrepreneur – For the region, industry etc • Connection • Every reason BUT R.O.I. …
  31. 31. emotional ROI. Not financial ROI WYNTK(what you need to know) Crowdfunding is about …
  32. 32. (when crowdfunding …) “its not what you do, but why you do it,” WYNTK(what you need to know)
  33. 33. http://www.kickstarter.com/projects/1104350651/tiktok-lunatik- multi-touch-watch-kits
  34. 34. http://trendwatching.com/trends/infographics/presumers/ “Consumers who want products before they are developed” Pre-orders Early adopters Supporters
  35. 35. UH OH … The Kickstart Model..
  36. 36. 1. Crowdfunding = New “1st Money” for ventures ($10k - $50k average– but wild exceptions) 2. Equity Crowdfunding is Still Far away 3. Rewards based Model IS Crowdfunding today 4. All or Nothing Crowdfunding – Standard 5. Perks and Rewards: Pre-order Crowdfunding 6. Social Media & Content Intensive www.propelarizona.com WYNTK(what you need to know)
  37. 37. What does success look like?
  38. 38. • The iPhone-friendly Pebble watch earned $7.6 million more than its $100,000 goal. • And the Galileo iPhone platform closed its Kickstarter campaign at $702,000, far surpassing its $100,000 goal.
  39. 39. • Ouya raised $2 million in one day for a new Android gaming console (it’s raised more than $5 million to date), • the Nifty MiniDrive, external memory for Apple MacBooks. The tiny storage company is more than 2,000% above its $11,000 goal with 15 days left in the campaign.
  40. 40. What do successful campaigns have in common?
  41. 41. http://www.kickstarter.com/projects/hop/ele vation-dock-the-best-dock-for-iphone
  42. 42. Projectio http://www.kickstarter.com/projects/1209578799/projecteo-the-tiny-instagram-projector
  43. 43. http://www.kickstarter.com/projects/mikebond/ti2-sentinel-titanium-cache?ref=home_popular
  44. 44. http://www.kickstarter.com/projects/poots/kingdom-death- monster?ref=home_popular
  45. 45. http://www.kickstarter.com/projects/smartthings/smartthings-make-your- world-smarter?ref=category
  46. 46. http://www.kickstarter.com/projects/thejumpshot/jumpshot-a-new-weapon-to- battle-pc-frustration?ref=category
  47. 47. http://trendwatching.com/trends/infographics/presumers/
  48. 48. Successful campaigns took an average 11 days preparing for their launch. http://blog.indiegogo.com/2013/01/12-insights-for-2012.html
  49. 49. Campaigns ran an average 49 days in 2012, as opposed to 60 in 2011. Successful campaigns fundraised for 39 days.
  50. 50. Crowdfunding Myths & Mistakes • Myth #1: If You Build It, They Will Come • Myth #2: Cash is Free • Making it about you • Unrealistic Expectations • Lack of clarity • No call to action • Expecting to be found: (No Marketing) • Ignoring Small Donations/Donors http://kickstartershq.com/articles/5-project-crushing-kickstarter-mistakes-how-to-avoid-them http://www.crowdsourcing.org/document/3-big-crowdfunding-myths-via-funderhut/23804
  51. 51. www.propelarizona.com WYNTK(what you need to know) Successful Crowdfunding Campaigns Focus on The new 4 P’s … the 1. the 2. the 4. the 3.
  52. 52. focus on “them” – not your company WHO are they? What motivates them? Interests, Values … the 1. The new 4 P’s of Crowdfunding .. www.propelarizona.com the 2. You are pitching to “them” TELL A STORY !! WHY is more important than $$ VIDEO(s) & VISUAL(s) Tell the story in small ‘chapters’ VIDEO(s) & VISUAL(s) And even smaller “sound bites” Give them a Story they can tell to others. the 3. $$ Value is a negative driver ! UNIQUE It’s about THEM EXCLUSIVE And what is important to “Them” FIRST Make sure it is … BUZZWORTHY the 4.It’s a daily/hourly effort … SOCIAL MEDIA It’s a conversation … UPDATES, BLOGS, NEWS Provide Value, and Talking Points RE-POST, TWEETable It’s about … for their network VALIDATION & EVIDENCE
  53. 53. Crafting a Successful Crowdfunding Campaign
  54. 54. Some initial rules ….
  55. 55. 1. Crowdfunding takes work, new skills. 2. It takes a strategy, and preparation. 3. The rules are different. 4. You can’t just post and run … 5. It’s a public success or failure – that “stays on your resume” www.propelarizona.com WYNTK(what you need to know)
  56. 56. Components of a Crowdfunding Campaign
  57. 57.  Title & Short Description • (repeatable & compelling)  Long Description (“The Pitch”) • Make it a story … about “them”  Visuals: Video, Photos, Images  Team, Deliverables, Details  Perks & rewards  Funding Goals: Amount and Timeframe  Updates & SOCIAL MEDIA CAMPAIGN • Repeatable Messages • Daily “routine” • Traditional marketing too
  58. 58. Crafting the “Pitch”
  59. 59. First: Who What Why When … • The 3 Who’s: – Who are the donors? (affinity & passion) – Who is benefits? (the market) – Who are you? • The 3 Why’s – Why would your donors care? – Why does the market care? – Why are you the right team to do it?
  60. 60. First: Who What Why When … • What is your project & goal? – Understandable & Simple – Compelling & Intriguing – Repeatable & Memorable • How and When – How will you achieve your goal? Realistic? – When, after funding? When will I get my perks?
  61. 61. Other Tips • Tell a story • Make it about them • The History of the idea is intriguing • What is the Impact? – why is this important? • Try a FAQ • Call to action – get them involved!
  62. 62. Exercise – Craft the Pitch
  63. 63. Crafting your Pitch Title & Short Description •(repeatable & compelling) Long Description (“The Pitch”) •Make it a story … about “them” Visuals: Video, Photos, Images Team, Deliverables, Details Perks & rewards Funding Goals: Amount and Timeframe Updates & SOCIAL MEDIA CAMPAIGN •Repeatable Messages •Daily “routine” •Traditional marketing too Tell a story Make it about them The History of the idea is intriguing What is the Impact? Why is this important? Try a FAQ Call to action – get them involved! The 3 Who’s: Who are the donors? (affinity & passion) Who is benefits? (the market) Who are you? The 3 Why’s Why would your donors care? Why does the market care? Why are you the right team to do it? What is your project & goal? Understandable & Simple Compelling & Intriguing Repeatable & Memorable How and When How will you achieve your goal? Realistic? When, after funding? When will I get my perks?
  64. 64. Pitch Notes - 1 • Who (donors, market) • “Why” – the story • Impact (on the market) • Impact (on the donors)
  65. 65. Pitch Notes - 2 • Story, and History … • FAQ • Perk Ideas (what’s important to donors) • Calls to Action
  66. 66. Visuals
  67. 67. The Importance of Visual Media • 64% of successful campaigns in had pitch videos. • Campaigns with videos under 5 minutes were 25% more likely to reach their goal than those with videos that were longer. • Average campaign video length for campaigns was 3 min, 27 seconds. Campaigns that reach their goal are 16 seconds shorter. • On average, successful campaigns uploaded 6 media to their gallery. • http://blog.indiegogo.com/2013/01/12-insights-for-2012.html
  68. 68. Perks & Rewards
  69. 69. Directed by Patrick Million Executive Producer CJ Cornell a Patrick Million FILM American Grandmaster
  70. 70. Rewards Crowdfunding • Incentives & perks • Pre-Orders • Pre-Sumers • Market Validation
  71. 71. Rewards don’t have to worth $$
  72. 72. • $25 perk is the single most claimed perk, representing nearly 25% of all perks that are selected. • While the $25 dollar perk is only responsible for raising 11% of total funds.
  73. 73. • $100 perks raise more money than any other perk price and make up nearly 30% of total funds. A $100 perk combined with the next three perk price points: $50, $500, and $1000 makes up about 70% of total money raised by perks
  74. 74. some Rules for Rewards
  75. 75. 1. Make perks unique & exclusive Avoid T-shirts, Mugs & Hugs
  76. 76. 2. Target them
  77. 77. 3. Give them a connection
  78. 78. “The Cocktail Party Effect”
  79. 79. “The Restaurant Effect”
  80. 80. “The Carey School Effect”
  81. 81. The less tangible the perk, the more public (visible) & EXCLUSIVE it needs to be.
  82. 82. The Campaign
  83. 83. How much $$ ? How long?
  84. 84. Discussion • How much should we raise? – Have you raised money before? Return? – Do you/did you work at a highly visible position? – *** Your social network? Large? Followers? – Idea - big market? How unique? – How much (marketing) work will you do?
  85. 85. HOW to Crowdfund? PUSH - Running the campaign • Social Media • Comments & Updates • Networking • Personal Pitches
  86. 86. Your mission: To get them talking about your project
  87. 87. Now that you’ve launched … Continue the story
  88. 88. Social Engagement – Transparency & Trust – Social Proof & Viral FX – Engagement & “The Fundamentals” – Twitter – Facebook – Blogging
  89. 89. most successful projects receive about 25-40% of their revenue from their first, second and third degree of connections. This could include friends, family, work acquaintances, or anyone that the owner is connected to. • http://www.forbes.com/sites/tanyaprive/2012/11/27/what-is-crowdfunding-and-how-does-it-benefit-the-economy/
  90. 90. 1. Create: (of course) - A Facebook Account - A Twitter Account (for your campaign)
  91. 91. 2. Tweet & Post –Frequently –Uniquely –Personally
  92. 92. 3. Post Updates & Blog •About your progress •About the subject •About the industry •About the People
  93. 93. 4. Go 1-1 •Reply to comments •Retweet/Repost Your fans and donors are your most powerful advocates!
  94. 94. 5. Target, Measure & Adjust •Different Messages for different groups •Google, Hootsuite, others •Learn and Adjust focus
  95. 95. Metrics http://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and-steady
  96. 96. Metrics http://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and-steady
  97. 97. the importance of google analytics to track and improve performance • + perks from fivvr • • http://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and- steady
  98. 98. Campaign Checklist Social Media Create a schedule 2-5x / week Use an automated tool Eg Hootsuite Post interesting info – Not just pleas for money Not just updates Vary your targets Call to action 1/3-1/2 time Use analytics and other metrics Traditional Marketing Pitch Events Press Releases Demos Testamonials Use an automated tool What to Communicate: 1. Your Progress 2. Successes, Evidence of success 3. Ammunition for your supporters 4. Industry Info, Factoids 5. People Info Plan, Schedule & Update Your Social Network is a Force Multiplier – but you have to give them help.
  99. 99. Success Factors
  100. 100. http://online.wsj.com/article/SB100008723963904438558045776010130940 84438.html?mod=googlenews_wsj#articleTabs%3Darticle
  101. 101. http://www.indiegogo.com/blog/2012/05/indiegogo-insight-campaigns-that-take-these-six-actions-raise-8-times-more- money-than-campaigns-that-dont.html
  102. 102. http://www.indiegogo.com/blog/2012/05/indiegogo-insight-campaigns-that-take-these-six-actions-raise-8-times-more- money-than-campaigns-that-dont.html
  103. 103. http://www.indiegogo.com/blog/2012/07/indiegogo-insight-winning-the-middle-game.html
  104. 104. successful campaigns raise, on average, 49% percent of their goals during the first and last 10% of the campaign length.
  105. 105. The most important secret is …
  106. 106. Showing Momentum (the perception of momentum)
  107. 107. The most obvious secret is …
  108. 108. Credibility = trust, competence & follow-through
  109. 109. days Crowdfunding is measured in …

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