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Disruptive Potential of Crowdfunding


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My presentation on crowdfunding at the The Sweden-U.S. Entrepreneurial Forum in Stockholm and Entreprenörskaps Forum in October 2013:

Published in: Business, Technology
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Disruptive Potential of Crowdfunding

  1. 1. The Disruptive Potential of Crowdfunding? ROBIN TEIGLAND & CLAIRE INGRAM STOCKHOLM SCHOOL OF ECONOMICS OCTOBER 2013 10/16/2013 1
  2. 2. Today’s presentation What is crowdfunding? From crowdfunding to crowd equity Some implications Q&A
  3. 3. What is Crowdfunding? Accumulation of small investments in individual projects by large number of individuals (the “crowd”) via or with help of Internet and social networks (De Buysere et al., 2012) Picture: FundedByMe
  4. 4. Crowdfunding 2012 Worldwide $2.7bn raised for 470k projects on 800+ platforms Massolution, 2013
  5. 5. Donation/reward most popular form Form of Funding Donation-based Reward-based Benefits for Funders Donation Donation or prepurchase Intangible benefits. Rewards in addition to intangible benefits. Return on investment if company does well. Rewards sometimes also offered and intangible benefits may motivate too. Repayment of loan with interest. Alternatively intangible benefits if loan given interest-free. Equity-based Investment Debt-based Loan
  6. 6. Most popular crowdfunding activities to date Massolution, 2013
  7. 7. Crowdfunding in Sweden As of May 1, 2013 approx $4 mln raised
  8. 8. Local Stockholm success story: Flippin’ Burgers Money raised: SEK 36,502 / €4,000 Number of Investors: 186 Date Funded: September 2011 Sector: Food Sjölund, FundedByMe
  9. 9. Local solutions Sjölund, FundedByMe
  10. 10. Swedish Volumental to USA to raise funds
  11. 11. Enabling entrepreneurs anywhere Ushahidi of Kenya Kenya
  12. 12. “Made in Africa” 3D printer (Togo) through Ulele Winner of International Space Apps Challenge
  13. 13. And big names entering the scene Executive Producer Robert Redford Narrated by Jodie Foster Donald Trump’s own crowdfunding site Open to anyone
  14. 14. Crowdfund on your own website
  15. 15. Today’s presentation What is crowdfunding? From crowdfunding to crowd equity Some implications Q&A
  16. 16. From crowdfunding to crowd equity $5.1bln Millions of dollars • Equity < 5% of total crowdfunding • Politicians generally positive -> entrepreneurs + job creation • US, Italy, Denmark changing regulations enabling equity
  17. 17. Change of strategy Nordics, Spain, Germany
  18. 18. Initial success with crowd equity
  19. 19. Today’s presentation What is crowdfunding? From crowdfunding to crowd equity Some implications Q&A
  20. 20. Implications  Easier for new companies to enter the market? ◦ Access to funds no matter where in world ◦ Fewer product/service failures?  Changing the “rules of the game”? ◦ Local solutions not interested in scalability ◦ Low price and quality without economies of scale  Increased global competition
  21. 21. Many unanswered questions Some issues Cross border investments? Secondary markets for crowd equity shares? Taxation issues for both investor and entrepreneur? How to better leverage “crowd” for resources?
  22. 22. 10/16/2013 22
  23. 23. What’s around the corner? 24x7 global internet collaboration + open source + 3D printing + crowdfunding? $60,000 $150 Available for free download on Where is the firm?
  24. 24. Venture capitalists are the travel agents of yesterday – here today, gone tomorrow. Venture capitalist in Silicon Valley – June 2013
  25. 25. If you love knowledge, set it free… Robin Teigland RobinTeigland Photo: Lindholm, Metro Photo: Nordenskiöld For more information on crowdfunding: •Research Paper: •Industry Report: Photo: Lindqvist