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VF2018 Workshop: Anatomy of a Deal (FundRazr, FrontFundr, BMW Consulting)

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FundRazr is an award-winning online fundraising platform that has helped thousands of people and organizations raise money for causes they care about. FundRazr offers a fundraising platform that is easy to use, inexpensive and readily accessible. FundRazr’s online fundraising platform has helped raise over $115 million for over 140,000 campaigns in dozens of countries around the world. For more information, visit the company's website at www.fundrazr.com.

FrontFundr connects investors and entrepreneurs. Investing in young companies has been limited to angel investors, venture capital firms and wealthy individuals. These investors represent only a fraction of the larger investor community who are excited and have the financial means to participate in growing new companies. FrontFundr uses today’s technology to enable entrepreneurs to raise money from a much larger investor community. This is an opportunity for seasoned investors and the wider public to come together to directly drive innovation and entrepreneurship. With FrontFundr, both experienced and regular investors can exercise positive influence on businesses they would like to see succeed. For more information, visit the company's website at www.frontfundr.com.

Bennett Milner Williams Consulting Ltd. is led by Principal, Victoria Bennett.
With over twenty years’ experience in business-to-business and business-to-consumer marketing in Europe and North America, Victoria has overseen sales, operations, finance, and HR in a spectrum of industries. Victoria has a record of strong commercial success working with major brands including Procter & Gamble, TD Bank, Mars, Tervita, BP, Gushor (a Schlumberger company), ENMAX, and Axia NetMedia.

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VF2018 Workshop: Anatomy of a Deal (FundRazr, FrontFundr, BMW Consulting)

  1. 1. CROWDFUNDING ANATOMY OF A DEAL Sustainable Marketing | Crowdfunding
  2. 2. PRESENTER Daryl Hatton – CEO of FundRazr
  3. 3. KEYTHEMES • MarketingThe Company – not justThe Deal • Emotional Engagement • Promotion – not pitching
  4. 4. VISITORS BY AGE GROUP 29% 27% 20% 12% 7% 5% 25-34 35-44 45-54 55-64 65+ 18-24 Key takeaways: • Digital Natives (ages 25 to 54) made up 76% of visitors • Traditional angels age brackets (55+) were only 19% of visitors
  5. 5. REFERRALTRAFFIC 24% 21% 19% 13% 9% 2% 12% RedResort.com Mobile Facebook Direct Google Desktop Facebook Instagram Other Key takeaways: • Drive traffic from your website • Email marketing as important as social media marketing • Traffic comes from mobile – craft your message accordingly Total visits: 43,353
  6. 6. IT CAME DOWNTO THE WIRE
  7. 7. PCMA AWARD Crowdfunding – Innovation – Deal of theYear
  8. 8. PRESENTER Jasper Dikmans – Manager Business DevelopmentWestern Canada
  9. 9. THE COMPANY • Plant-based butcher shop. Offers healthy planet-friendly meat alternatives that are accessible to omnivores, vegetarians and vegans. • First vegan butcher shop on the west coast of Canada; one of two vegan butcher shops in Canada
  10. 10. WHAT’S THE DEAL? • Looking for $500,000 to help scale up the business and increase production capacity • Offering a convertible note on a 3 year term with 6% interest, a 15% discount and a 7.5M cap. • $250 minimum investment
  11. 11. MILESTONES. • September 10, 2018: launch • September 19: hit $100,000 goal • October 2: $250,000 • October 15: 100 investors • November 27: $408,250 and 157 investors • November 29: Dragon’s Den • December 15: Close.
  12. 12. $408,520 and counting THE RESULT.
  13. 13. THE RESULT (CONTINUED) • Raised $408,250 from 157 investors (Avg. investment $2,600) • The majority has come in on the back of local and retail investors • 74% of the raise consists of investments less than $10,000 • 12,545 unique visitors and 30,263 page views resulted in $408,250 from 157 investors
  14. 14. WHAT DID IT TAKE TO EXECUTETHIS SUCCESSFUL INVESTMENT CROWDFUNDING CAMPAIGN? Agenda: 1. Gain traction and recognition 2. Build an active, engaged community of supporters 3. Leverage the community 4. Appeal to different investors motivations
  15. 15. 1. GAIN TRACTION AND RECOGNITION • Opened first vegan butcher shop on the west coast of Canada. Over 1,000 visitors on day 1. • Over 1 million dollars in revenue in just over a year of operation with healthy profit margins. Mainly business-to-consumer (butcher shop, farmers markets, e-commerce, pop-ups). • Unable to produce enough product to meet demand: Regularly sells out at markets and events; Waiting list of over 100 restaurants and stores. • Wrapped up successful Kickstarter campaign raising $64,000 from 700 different backers.
  16. 16. 2. BUILD ACTIVE, ENGAGED COMMUNITY OF SUPPORTERS • High in demand product in BC: • 13% is vegetarian; • 25% cuts down on meat consumption; and • 33% purchases plant based meats. • However, still not a lot of options out there: only 2 vegan butcher shops in Canada and 6 in the United States. • As one of the few good options out there,TheVery Good Butcher’s story resonates with a lot of people who help them to share the message and spread the word.
  17. 17. 2. BUILD ACTIVE, ENGAGED COMMUNITY OF SUPPORTERS (CONTINUED) 18,000 likes 2,000 followers 13,000 followers 4.9 / 5 (330 reviews) 131,000 unique users 5,000 subscribers
  18. 18. 3. LEVERAGE THE COMMUNITY • Email newsletters • Est. 5,000 recipients, Avg. open rate 40%, Avg. click-through rate 19% • Facebook posts • Avg. 12,000 views, Avg. click-through rate 7%
  19. 19. 4.APPEAL TO DIFFERENT INVESTOR MOTIVATIONS • Invest to receive a return on investment (27% of the investments were $5,000 or more) • Invest to make an environmental impact and ethical reasons to invest • Local: TheVery Good Butchers is local to theVancouver andVictoria markets. People like to support local (90% of the investors is based in B.C.).The $250 minimum investment made it accessible to people who just want to support, too (19% of the investments is $250)
  20. 20. 4.APPEAL TO DIFFERENT INVESTOR MOTIVATIONS (CONTINUED) Perks
  21. 21. 4.APPEAL TO DIFFERENT INVESTOR MOTIVATIONS (CONTINUED) Overfunded: exceeding the $100,000 minimum target results in “social proof.”
  22. 22. 4.APPEAL TO DIFFERENT INVESTOR MOTIVATIONS (CONTINUED) • Dragons’ Den?
  23. 23. KEYTAKEAWAYS • High volumes of online traffic are key. TVGB’s average click-through rate across channels was 13%; and of the12,570 visitors, just1.25% of the visitors invested. • Start to build an active, engaged community early on; and leverage your community • Set a low investment minimum to enable investors of different social classes and different objectives (impact, financial return) to participate • Set a low minimum raise amount to hit 100% and gain “social proof”
  24. 24. KEYTAKEAWAYS (CONTINUED) • Early stage B2C start-ups: consider a rewards or donation-based campaign to set yourself up for success.TheVery Good Butchers’ Kickstarter campaign helped them to build their email list; raise profile; and get their community accustomed to the idea of putting in money online. • Consider a more simplified offering (e.g., common shares). FrontFundr andTheVery Good Butchers received quite a few questions about a convertible note works.
  25. 25. HOW MUCH DIDTHAT ACTUALLY COST? • Spent less than $500,- in total to boost the raise to reach more people on social media • Spent $0 on email marketing, as the company had built an email list on the back of its community • In total, the company spent ~$20,000 on the raise (legal fees, platform fees, production of the video, graphic design, social media marketing, et cetera) before they collected their first cheques. Note: legal fees were relatively high because of the convertible note.
  26. 26. • Strategic Marketing Firm supporting crowdfunding campaigns • First campaign – 6 years ago • Constantly changing Sustainable Marketing | Crowdfunding
  27. 27. HISTORY Accredited Investors Community Sustainable Marketing | Crowdfunding
  28. 28. 2018 Accredited Investors Blended Community Sustainable Marketing | Crowdfunding
  29. 29. WHY? • In 2011, the average amount raised through investment crowdfunding was $~112,000 Sustainable Marketing | Crowdfunding
  30. 30. WHY? • In 2017, UK’s largest platform’s average raise size was £692,000, with the largest deal at £3.2m. • In 2018, Canada’s largest platform’s average raise size was $977,005 • Investment crowdfunding is trending bigger raises Sustainable Marketing | Crowdfunding
  31. 31. WHAT ARE VC/ANGELS LOOKING FOR? • Proof of market interest / reduced risk • Social Proof • Anonymity • Deal flow • Transparent communication • Decreased time to completion Sustainable Marketing | Crowdfunding
  32. 32. CAMPAIGNS NEEDTHE 100%TO INVEST • Accredited investors make up 31% of investors but 66% of the raise • Community investors make up 69% of investors and 33% of the raise Challenge to the market – how to make invest crowdfunding more mainstream, as there is significantly more money with the 97% than the 3%. Sustainable Marketing | Crowdfunding
  33. 33. SQUAMISH CANYON • Sensitive location • Environmentally • Politically • Huge opportunity • Needs to raise ~ $5MM for MVP • Community to get buy in and to benefit from project • VC/Angels to achieve the goal Squamish Canyon addresses a critical lack of year-round, all-weather activities for every age group along one of Canada’s busiest tourist corridors, the Sea to Sky highway.Working together with the local community and local partners, Squamish Canyon will support economic diversity, social and environmental sustainability, community building, and education in Squamish, British Columbia. Squamish Canyon - A destination waiting Sustainable Marketing | Crowdfunding
  34. 34. VERMILLION GROWERS • Needs to raise ~ $16.5million • Raised to date • Friends & Family/Accredited Investors – $3.75MM • Debt financing $9MM • Community Crowdfunding – Phase 1 - $250,000 • OM Crowdfunding – Phase II $3.5MM Join Vermillion Growers to increase Canada’s food sovereignty by building the first large-scale tomato greenhouse in Manitoba. Support a company committed to growing food, growing people and growing community. Sustainable Marketing | Crowdfunding
  35. 35. Initial founder funding Community Government Grants, other non diluting capital VCs / Angel Investors Integrated Anatomy of a deal Institutional Investors Friends and Family Sustainable Marketing | Crowdfunding

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