2. What is Crowdfunding?
• Crowdfunding - coined in 2006 - is a way to fund a project by means
of raising small increments of money from a large number of people
over the internet.(18)
• Crowdfunding uses the power of the ‘crowd’ to fund projects that
would not have a chance of being funded by traditional means. (4)
Crowdfunding by Rocío Lara via Flickr
3. • Although there are currently more than 50 crowdsourcing websites in
the US alone, (4) crowdsourcing gained popularity in 2003 when
ArtistShare was launched by Brian Camelio.
• Artistshare was created for musicians to ask for donations for them to
produce their work, tour etc. It is now also used as well for film/video,
and photography. (3)
Web by:John K via Flickr
4. • The first crowdsourcing project was done
by Maria Schneider for her jazz album
Concert in a Garden.
• People were offered rewards such as downloads,
mentions, producer credits etc. She raised $130,000 to
produce the album and won a Grammy for Best Large
Jazz Ensemble Album in 2005 (3)
HONK! Fest 2010 Band performances & other fun in Harvard Square by: Chris Devers via Flickr
5. • Although ArtistShare was the first, websites
launched well after have taken the front seat in
the market. Indiegogo was launched in 2007,
Kickstarter in 2009, GoFundMe launched in
2010, are now the top three websites for
crowdfunding well surpassing Artistshare in
popularity.
Funds by: Got Credit via Flickr
6. There are three types of
crowdfunding: donation,
rewards and equity
• Donation: charitable donation to assist
in a project or a person in need - no
expectation of receiving anything in
return
• Rewards: contribution of money to create
a project/product for a reward or
incentive - often increasing by the
increase of the contribution.
• Equity: investing in a company/product/
project with a promise of financial return
or for a stake in the business. (6)
Money by: Moyan Brenn via Flickr
7. Donations
• Donation based
crowdfunding is most
often used for personal
needs funding. Some of
the most common
campaigns being medical
bills, tuition, or trips.
GoFundMe is the most
popular site used for
personal donations - with
more that 160,000
education campaigns in
2015. (1)
Donate by:Kathryn Harper via Flickr
8. Tuition
• Gabriela Riquelme was $1700 short on tuition
for fall semester at University of Alaska
Anchorage - by using GoFundMe she told her
situation and set the donation amount from $5 -
$20 and reached her goal in two days. (1)
College by: Tax Credit via Flickr
9. Negative Stigma Behind Personal
Crowdfunding:
• “There is a sort of stigma around crowd-funding
— we’ve heard the word “e-beggar”. (11)
• Expert Salvador Briggman states, “Begging is a
huge turnoff. What I typically see people do with
personal crowdfunding is just blast it on
Facebook as an update, saying, 'Please give me
money, please share, please donate.' That's the
worst way to do it” (1)
10. Medical Expenses
• In 2012 family and friends rallied to raise money for
Jordan Feradi - a seven year old diagnosed with
inoperable brain cancer. After chemotherapy
became too much he was accepted into a program to
improve quality of life that cost $200,000.(7)
Medical by: Ajaysrinivasv via Flickr
11. • 80% of funds donated
came from people they
knew, with the
remaining 20%
coming from strangers
who saw the cause on
social media.
Something Brad
Damphousee -CEO of
GoFundMe calls “word
of text” (7)
• Jordan’s father set up a GoFundMe
and in two weeks reached the
$200,000 target.
There’s Ice by: Caylin via Flickr
12. • Youtube channel H3H3 recently came under attack by
fellow Youtuber Matt Hossenizadeh - (MattHossZone)
for copyright infringement for using clips of his video in
a video reacting to other YouTube videos.
• Long time Youtuber Philip Defranco after hearing of the
controversy started a GoFundM)e to raise funds for
H3H3’s $100,000+ legal bills. (15)
Youtube by: SEO via Flickr
13. • The entire Youtube community
came to the defense of H3H3
stating that this effects the
entire YouTube community
who create original content
saying, “When someone
attacks our home, we take up
arms.” (15)
• Within less than two days the
campaign surpassed its goal
hitting $145,000. As of June
5th, being up for just 10 days,
has reached $167,602 from
7053 people.(15)
Global-Community-8822469 by HocVien DaminhVN via Flickr
14. Rewards
• Rewards is the successful form of crowdfunding.
• Campaigns are launched with suggested donation amounts - when
you contribute a certain amount, you receive a certain reward.
• Rewards based crowdfunding is most commonly used for artistic
projects such as films, music, publishing etc.. or the development of
products but is also moving towards academic research(3)(6)
Reward by: GotCredit via Flickr
15. Science
• Many academic researchers are also using crowdfunding to support
their work. With huge budget cuts and lack of priority over different
scientific studies, Scientists are turning to the public in hopes to be
funded through public interest.(5)
• Jennifer D. Calkins and Jennifer M. Gee, both biologists, raised $4,873
dollars to study the quail in Mexico by using crowdfunding and offering
quail tshirt and trading cards they design to raise funds. They also
offered postcards, books, prints. They found that more people were
inclined towards donating by having these products and piece of the
project. (9)
Vaccine research NVGH test tubes by: Novartis AG via Flickr
16. The Problem
• With such a difficulty in gaining government or
corporate funding, crowdfunding is the future of
funding scientific projects and could change the
balance of what has the green light for moving
forward.
• The concern however is that gimmicky projects
that would attract more public than scientists
could take funding focus away from important
things, like medical research. (5) (9)
17. The Arts
• Veronica Mars - to date is the second
most successful film crowdfunding
campaign and 12th most successful
campaign in all crowdfunding
history. Raised $5,702,153 from
91,585. (10)
• They raised their first million within
four hours, and within 12 hours had
reached their goal.(14)
• Kristen Bell was fundamental in the
raising of this money through the
rewards. For every donor that
pledged 10k they would receive a
walk-on speaking part in the film.
(14)
Film by: John via Flickr
18. Pebble Watch
• The Pebble Watch broke all records in 2012 raising $10 million on
KickStarter by 68,929 backers to create the first Pebble released in
2013. (12)
• In 2015 they launched a new Kickstarter and again broke records
raising $20,338,986 from a goal of $500,000 offering incentives of
a free watch, or two (increasing with donation) that would retail at a
higher price than their donation (13)
Pebble Time by: Martin Hajek via flickr
19. Equity Crowdfunding
• The newest style of crowdfunding allows a
business or startup to raise capital by selling
many small stakes, shares, to a large number of
investors. Instead of making a donation or
receiving a reward you are buying into the
company and becoming one of its owners. (6)
Money by 401(K)2012 via Flickr
20. • This new form of investing allows for fewer
restrictions on the company offering the equity
and opens the door for everyday people to
become investors and support innovation. (6)
• Equity crowdfunding has just become legal in
Canada as of early 2016 and is the only
crowdfunding regulated in Canada. (2)
21. • 8 tracks campaign on SeedInvest created a test to see if
people would be interested in participating. And has had
$30 million from 30,000 people pledged.
• Any person can invest in the product, rather than only
those of great wealth. If approved the campaign is set to
start this month.(17)
8tracks home page by: Ade Oshineye via Flickr
22. • Venture capital is becoming increasingly harder to
obtain, making equity crowdfunding a great opportunity
for moving forward and could be a ‘lifeline’ for startups
who need money without huge expectations.
• However it does comes with risks - liquidating so much
of your company to so many investors (17)
Risk by Memphis CVB via Flickr
23. • Although there are major success stories like this one -
statistically majority of crowdfunding campaigns fail
with Kickstarter - the most popular site only having a
success rate of only 44% (8)
WHO LOOKS DOWN by: Marc Falardeau via Flickr
24. • With low success rates, the number of launch projects
decreased in 2015 from the numbers in 2014 - but the
amount raised saw an increase. With 24 new projects
launched a day, Canada is ranked third in the world. (8)
Success Key by: GotCredit via Flickr
25. • With the rise of crowdfunding - investment and development in every
industry, consumer, education, person has transformed. Crowdfunding
only has more room to grow giving developers more control over their
projects.
• With such struggles to get venture capital or big name investors -
crowdfunding opens doors for the future and allows the everyday man to
be a part of the innovative world.
Investment Growth by: Pictures of Money via Flickr
26. [1] Blackman, Andrew. "Tuition due? Time to Hit Up Everyone
You Know; Crowdsourcing Allows Students to Raise Part of the
Money with a Little Help from their Friends." Wall Street Journal
(Online) Nov 2 2015. ProQuest. Web. 4 June 2016
[2] Cormick, Alixe. “Equality Crowdfunding Regulations.” National
Crowdfunding Association of Canada (Online). Feb 2016. Web.
June 4 2016
[3] Freedman, David and Matthew Nutting. “A Brief History Of
Crowdfunding Including Rewards, Donation, Debt, And Equity
Platforms In The USA.” 2nd ed. 3 April 2015. Web. 5 June 2015
[4] Gerber, Elizabeth M., Julie S. Hui, and Pei-Yi Kuo. "Crowdfunding: Why
People are Motivated to Post and Fund Projects on Crowdfunding
Platforms." Proceedings of the International Workshop on Design,
Influence, and Social Technologies: Techniques, Impacts and Ethics
2012. PDF File
[5] Gray, Richard. “Crowdfunded Science: Harnessing the
Wisdom of the Crowd, or Selling Out?” The Guardian (Online)
Jan 2 2015. Web. 4 June 2016
[6] "Introducing Equity Crowdfunding A Primer for Ontario
Investors." Equity Crowdfunding (Online) Ontario Securities
Commission, 2016. Web. 04 June 2016.
[7] Kwan, Amanda. “Catastrophic Medical Bills? Online Donors
May Help.” The Globe and Mail (Online) July 19 2012. Web. 4
June 2016
[8] Lewis, Michael. “Majority of Kickstarter campaigns fail despite
high-profile successes like Vanhawks.” The Star (Online) May 2
2016. Web. 4 June 2016
[9] Lin, Thomas. “Scientists Turn to Crowds on the Web to
Finance Their Projects.” The New York Times (Online) July 11
2011. Web. 3 June 2016
[10] "Most Successful Crowdfunding Campaigns - CrowdfundingBlog.com."
CrowdfundingBlogcom. N.p., 18 Feb. 2016. Web. 05 June 2016.
[11] Pascoe, Alley. “Meet the Women Who Are Crowd-Funding Their Way
to Riches.” News (Online) June 5 2016. Web. 5 June 2016
[12] "Pebble Smartwatch | Smartwatch for IPhone & Android." Pebble.
N.p., 2011. Web. 05 June 2016.
[13] "Pebble Time - Awesome Smartwatch, No Compromises." Kickstarter.
Pebble Technology, n.d. Web. 4 June 2016.
[14] Rappaport, Sarah. "Kickstarter Funding Brings 'Veronica Mars' to
Life." CNBC. N.p., 12 Mar. 2014. Web. 05 June 2016.
[15] Spangler, Todd. “Legal Fund for YouTube’s H3H3 Raises More Than
$145,000 to Fight MattHoss Copyright Lawsuit.” (Online) May 27 2016.
Web. 4 June 2016
[16] Williams-Grut, Oscar. “Prominent UK Politicians are Questioning
Crowdfunding After a String of High-profile Failures.” Business Insider
UK (Online) June 2 2016. Web. 4 June 2016
[17] Williams, Owen. "8tracks Looks to Crowdfunding for Its next round of
Investment to Keep Growing." The Next Web RSS. N.p., 22 Mar. 2016.
Web. 05 June 2016.
[18] Woo, Jacqueline. “Crowdfunding Craze: Goldrush All Over Again?”
The Straits Time (Online) June 5 2016. Web. 5 June 2016
