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Crowdfunding Basics


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Tim Stansky's presentation on Crowdfunding at Tech Day Camp 2012

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Crowdfunding Basics

  1. 1. An introduction to crowdfunding Tim Stansky @timstansky November 2012
  2. 2. This presentation offers anoverview of crowdfunding with an emphasis on the rewards model and a case study of “Crowdfunding Innovation”, a special Mass Innovation Nights event. When the JOBS Act is in full swing there will be lots of room for “teachable moments”, unsavory types, and success.
  3. 3. What is crowdfunding?A tool that gives entrepreneurs the opportunity to attract apool of people via social media or shared interests in orderto contribute to a funding target that has been previouslyestablished by the entrepreneur. (11/6/12 Forbes articlelink)The JOBS ActThe Jumpstart Our Business Startups Act or JOBS Act, is alaw intended to encourage funding of United States smallbusinesses by easing some securities regulations. Itpassed with bipartisan support and was signed into law byPresident Barack Obama on April 5, 2012. (link tolegislation)
  4. 4. Current ModelsRewards Equity Lending Donation
  5. 5. Protect orphans and widowsHow Much Can I Invest?Everyone can invest at least $2,000/year.If an investor makes less than $100,000/year or have less than$100,000 in assets, they can invest 5% of that each year.For example, if I make $80,000/year, I will be able to invest$4,000/year in startups.If an investor makes less than $200,000/year or has less than$200,000 in assets, they can invest 10% of that each year.For example, if I make $150,000/year, I can invest $15,000/yearin startups.If an investor makes more than $200,000/year they areconsidered and accredited investor, and can basically invest asmuch as they want.
  6. 6. Platforms
  7. 7. This is nothing new. Joseph Pulitzer’s crowdfunding campaign generated an awe-inspiring $100,000 in five short months through micro donations. The most incredible aspect of his campaign is that the over 120,000 donations were in most cases less than a dollar. (Statue of Liberty crowdfunding story link)
  8. 8. Panel Conversation moderatedby the Boston BusinessJournal’s Kyle Alspach withthree Mass Inno alumni whosuccessfully fundedcrowdfunding projects onKickstarter: LifeCycleBracelets, Memory OnHand, and Ministry of Supply.(link to video) The founders of these ventures shared their insight and experience in planning the project, defining project goals or objectives, necessity of preparation, and offered hard- earned advice from lessons learned.
  9. 9. Kingsley Flood FUNDED! 6% FUNDED! My TV 38 in Feb ‘13 2% FUNDED! 5% gaining equity actively pre-sellingFUNDED! followers orders 19% $8k to date 7%
  10. 10. Why are they doing this?  fan engagement  pre-sales  marketing  SEO, mentions  hipster factor
  11. 11. Anatomy of a campaign the project apply to the platform designing the rewards prep work for launch, video! trajectory through influencers fulfillment and nurturing
  12. 12. Considerations & sleep loss legal and tax issues supply chain and fulfillment a compelling video satisfying 200 equity holders can I sell my equity?
  13. 13. Hello from PledgeMusic,Kingsley Flood posted a new update for Be a part of our new full-length album:EPISODE 5: (re)Arranging, or, Saved by the Bell and catsAlright folks, 60% with 25 days left. Thanks so much…we’re gettingthere…but of course we’re not quite there yet, so if you have friendsyou’ve brought to shows or just into music, we’d love if you toldthem about the campaign. They can pledge as little as $10(awesome!) or go up to $1,000 (more awesome!).But since you all are already champs, enough chit chat.Instead, you get this week’s video from the studio.This is Episode 5: (re)Arranging. It explores what happens when westart off not excited about a song, and end up very excited about it.Lots of things contributed to this: a cocktail party, tubularbells, Saved by the Bell, etc. The thing we’re probably most excitedabout is the shirt Nick wears while he narrates this. And the specialrelationship he has with his cat.Thanks for watching, pledging, being, etc.This update includes: 1 video and 3 images.View the full update.Loving your work. Team Pledge
  14. 14. Best ways to learn  back a project and go for the ride   Follow projects on Twitter Tim Stansky