This document discusses crowdfunding and provides an overview of the crowdfunding process. It begins with an introduction to crowdfunding, noting that crowdfunding involves sourcing funds from a large group of individuals online. It then discusses the different types of crowdfunding, including rewards-based, debt/loans, and equity/shares crowdfunding. The document provides details on how crowdfunding works as an alternative lending model compared to traditional bank lending. It also examines what factors investors look for in deciding whether to invest in a crowdfunding campaign.
Crowdfunding is a method of raising money online from many donors or investors. There are over 450 crowdfunding platforms across four main types: reward-based, donation-based, equity-based, and lending-based. Crowdfunding offers benefits like early feedback and marketing, but also risks like damaged reputation if goals are not met.
Crowdfunding involves raising money from a large number of people, typically via the Internet. There are several crowdfunding models, including start-up equity crowdfunding which allows people to invest in early start-ups, and rewards-based crowdfunding where investors receive a reward in exchange for their pledge. Legislation regarding crowdfunding differs between countries, with the U.S. passing laws in 2012 to encourage small business funding through crowdfunding and Canada taking a more cautious "wait-and-see" approach. Successful crowdfunding campaigns convey ideas clearly and quickly, target the right amount of funding, and involve live fundraising and pitching events.
Corporate Venture Capital best practices from interviews and researchMark S. Brooks
Summary research from interviews with 13 CVCs to identify best practices in creating a corporate venture capital (CVC) unit or a corporate accelerator.
Key takeaways include having clear objectives, clear processes and structure, easy to measure metrics, having patience and board or executive support, and making contributions to select startups that go well beyond capital.
I hope you find it useful. Feel free to distribute further to others who might find value in it.
You can reach me at https://www.linkedin.com/in/markbrooks
Whether you've been in business one week or five years, an infusion of funds is always welcome. But what type of financing is best for your business? There are so many factors to consider--from the stage of your business to how much it'll cost to get the money--that just choosing a path to follow can be overwhelming.
It takes more than just a great idea to run a successful business. Entrepreneurs and existing business owners need capital to pursue their vision.
Raising funds is the most tedious and complex question faced by every startups. There are few options by which startups can raise funds are been listed in this presentation
Early Stage Fintech Investment Thesis (Sept 2016)Earnest Sweat
Here is an example of a personal investment thesis that I created to share with venture capital firms. In this example, I provide my personal perspective on the fintech sector. For details on how I build this thesis check out my blog (https://goo.gl/CU4Qid).
Note: Some of the confidential information has been redacted for privacy.
Crowdfunding is a method of raising money online from many donors or investors. There are over 450 crowdfunding platforms across four main types: reward-based, donation-based, equity-based, and lending-based. Crowdfunding offers benefits like early feedback and marketing, but also risks like damaged reputation if goals are not met.
Crowdfunding involves raising money from a large number of people, typically via the Internet. There are several crowdfunding models, including start-up equity crowdfunding which allows people to invest in early start-ups, and rewards-based crowdfunding where investors receive a reward in exchange for their pledge. Legislation regarding crowdfunding differs between countries, with the U.S. passing laws in 2012 to encourage small business funding through crowdfunding and Canada taking a more cautious "wait-and-see" approach. Successful crowdfunding campaigns convey ideas clearly and quickly, target the right amount of funding, and involve live fundraising and pitching events.
Corporate Venture Capital best practices from interviews and researchMark S. Brooks
Summary research from interviews with 13 CVCs to identify best practices in creating a corporate venture capital (CVC) unit or a corporate accelerator.
Key takeaways include having clear objectives, clear processes and structure, easy to measure metrics, having patience and board or executive support, and making contributions to select startups that go well beyond capital.
I hope you find it useful. Feel free to distribute further to others who might find value in it.
You can reach me at https://www.linkedin.com/in/markbrooks
Whether you've been in business one week or five years, an infusion of funds is always welcome. But what type of financing is best for your business? There are so many factors to consider--from the stage of your business to how much it'll cost to get the money--that just choosing a path to follow can be overwhelming.
It takes more than just a great idea to run a successful business. Entrepreneurs and existing business owners need capital to pursue their vision.
Raising funds is the most tedious and complex question faced by every startups. There are few options by which startups can raise funds are been listed in this presentation
Early Stage Fintech Investment Thesis (Sept 2016)Earnest Sweat
Here is an example of a personal investment thesis that I created to share with venture capital firms. In this example, I provide my personal perspective on the fintech sector. For details on how I build this thesis check out my blog (https://goo.gl/CU4Qid).
Note: Some of the confidential information has been redacted for privacy.
Crowdfunding allows projects and ventures to be funded by raising small amounts of money from a large number of people online. It has grown significantly in recent years, with $16 billion raised in 2014 and an estimated $34 billion in 2015. While some criticize crowdfunding for potential fraud and poorly conceived projects, crowdfunding provides benefits by funding important social causes, scientific research, and new startups that may otherwise not receive funding. The risks of crowdfunding can be mitigated by using reputable sites and vetting projects thoroughly. Overall, the benefits of crowdfunding outweigh the criticisms.
Different Startup Funding Stages : How Funding WorksmyHQ
The document outlines the different stages of startup funding: seed capital from friends and family; angel funding from wealthy individual investors; venture capital from firms in multiple rounds (Series A, B, C, etc.); mezzanine financing and bridge loans prior to an IPO; and finally an IPO where the company sells shares to the public. It explains that contrary to common misconceptions, startups can and do utilize various external sources of funding beyond the initial seed stage as the company grows and progresses through different valuation levels over time.
The document discusses peer-to-peer (P2P) lending in India. It provides an overview of P2P lending, including how it works and its growth in India and globally. Key points covered include RBI regulations for P2P lending in India, the technology used, professional opportunities, and an overview of how P2P lending platforms operate. The document is a presentation on P2P lending given by CA Nimesh Dedhia of PND Wealth Management IMF LLP.
This document summarizes the Global Frontier Technology Fund, which invests in early-stage technology companies around the world. The fund highlights that 85% of future GDP growth will occur outside the US and that it has a network of over 300,000 founders building companies in 49 countries. It invests in sectors like AI, blockchain, IoT, and financial technology. The fund also has partnerships to help portfolio companies scale globally.
The document provides guidance on when and how much venture capital early-stage companies should raise. It recommends initially raising small amounts from friends and family, using that to build a product and pilot customers. It then suggests raising an angel/seed round and keeping costs low for the first year to prove scalability. It outlines when companies should consider venture capital versus other options. The document also provides tips on pitching VCs, including optimal fundraising seasons, pitch deck structure, and services The Rudder Group can provide to help companies raise capital.
Crowdfunding is the practice of funding projects by raising small amounts of money from a large number of people, typically via the Internet. There are several types of crowdfunding: donation-based, reward-based, peer-to-peer lending, and equity-based. Crowdfunding provides benefits like access to capital and risk hedging but also poses risks like lack of due diligence and default risk for lenders. In India, while equity crowdfunding is still being regulated, other forms like donation, reward, and peer-to-peer crowdfunding are allowed through platforms such as BitGiving, Milaap, and Start51. SEBI is working on a
This document provides an outline for a 10 slide investor pitch deck. It includes suggestions for slide layouts, key questions to answer on each slide, and words of advice. The slides cover introducing the founder and product, defining the problem and solution, traction to date, market opportunity, competitive edge, team, fundraising details, why invest now, and a summary of 3 key points. The goal is to hook the audience, showcase growth and market potential, and make the case for why investors should back the company.
A short introduction to Venture Capital Term Sheets, and in particular the concept of liquidation preferences. Leo Dirac's talk from Ignite Seattle 4. For more detail, see http://embracingchaos.com/business
The document provides an overview of impact venture finance. It discusses why fundraising matters for entrepreneurs aiming to generate profit and impact. It covers the different types of capital available, including grants, debt, and equity, and how the optimal type of capital depends on the growth stage of the venture. The document also provides tips for entrepreneurs on how to effectively fundraise, including selecting the right investors, pitching to investors, and addressing common concerns investors may have around key aspects of the venture like the social issue being addressed, customer and product, business model, management team, growth strategy, and competitive advantage.
Central Bank Digital Currency (CBDC): Best Practice and Technical ConsiderationsAndry Alamsyah
- Andry Alamsyah is an Indonesian researcher and academic who focuses on topics related to social computing, big data, blockchain technology, and disruptive innovation. He has extensive education and experience in these fields.
- The document discusses considerations for the implementation of a central bank digital currency (CBDC) in Indonesia. It covers motivations, design choices around distribution models and form, as well as technical considerations regarding privacy, security, and interoperability. Adoption of CBDC could help with financial inclusion and efficiency goals.
Real Estate Investing 101: Private EquityPeerRealty
This document discusses various concepts related to real estate private equity funds and syndications. It defines different types of investment funds based on their target risk and return profiles, from core funds with the lowest risk and returns to opportunity funds with the highest risk and potential returns. It also outlines key components of a private placement memorandum, specifies versus blind asset pools, pari passu cost and profit sharing, preferred returns and promotes, catch-up provisions, clawback provisions, squeeze down formulas, and round tripping assets.
Presentazione per il corso "Strumenti e applicazioni del web"
Corso di laurea magistrale: Teoria e Tecnologia della Comunicazione
Università Milano-Bicocca
Notation Capital is a NYC-based pre-seed venture capital fund that seeks to partner with highly technical founders building scalable internet companies. They believe that operational and capital efficiency have increased dramatically, allowing companies to gain many users with little funding. As successful NYC startups mature, technical talent is leaving to start new companies, presenting opportunities. Notation is well positioned as experienced technologists and investors to help the next wave of founders with guidance and small amounts of early funding.
Frank Rimalovski gave a presentation on when and how to raise venture capital. He discussed the different types of venture investors including angels, seed funds, and venture capital funds. He explained how VC funds work using a 2-and-20 fee structure and how they aim to make returns through investing at low valuations and exiting at higher valuations through IPOs or acquisitions. Rimalovski also covered VC math through an example of startup ownership dilution over multiple funding rounds. He advised founders to seek funding after achieving product-market fit and provided tips for what VCs look for in investments.
The 1776 Super Accelerator and Discovery Fund aims to identify promising startups disrupting highly regulated industries and provide them support. The Super Accelerator will select "Seed C stage" companies with evidence of traction but not yet a venture round. It will help startups navigate regulations and develop partnerships over a 90 day program. The Discovery Fund will make initial $75k-$150k investments in Accelerator companies and selectively in non-Accelerator companies, tracking performance to identify winners. It will leverage feedback to increase odds of acquisitions and follow-on funding. The "Moneyball" approach uses networks and data to filter investments, aiming for early wins and potential great companies.
This document summarizes key aspects of entrepreneurial finance and venture capital. It discusses what venture capital is, how venture capital firms are structured, the advantages and disadvantages of venture capital for entrepreneurs, and common terms in venture capital agreements. It also provides an overview of venture capital in India, including some major venture capital firms, average fund sizes, and challenges in the Indian market.
The document discusses equity-based crowdfunding and the 2012 JOBS Act which allowed for equity crowdfunding. It provides statistics on the growth of crowdfunding from 2011-2012, including that over $1 billion was funded to over 1 million projects in 2011. It describes the various types of crowdfunding and outlines some of the rules and regulations around equity crowdfunding as defined by the JOBS Act.
Crowdfunding: major trends research notesChris Jones
The document discusses equity-based crowdfunding following the 2012 JOBS Act. It notes that crowdfunding allows small contributions from many individuals to fund companies or projects. The document outlines the growth of crowdfunding, including that over $1.5 billion was funded through 1 million campaigns in 2011. It is projected that crowdfunding will surpass $6.2 billion by 2013, driven in part by regulations from the JOBS Act.
Crowdfunding allows projects and ventures to be funded by raising small amounts of money from a large number of people online. It has grown significantly in recent years, with $16 billion raised in 2014 and an estimated $34 billion in 2015. While some criticize crowdfunding for potential fraud and poorly conceived projects, crowdfunding provides benefits by funding important social causes, scientific research, and new startups that may otherwise not receive funding. The risks of crowdfunding can be mitigated by using reputable sites and vetting projects thoroughly. Overall, the benefits of crowdfunding outweigh the criticisms.
Different Startup Funding Stages : How Funding WorksmyHQ
The document outlines the different stages of startup funding: seed capital from friends and family; angel funding from wealthy individual investors; venture capital from firms in multiple rounds (Series A, B, C, etc.); mezzanine financing and bridge loans prior to an IPO; and finally an IPO where the company sells shares to the public. It explains that contrary to common misconceptions, startups can and do utilize various external sources of funding beyond the initial seed stage as the company grows and progresses through different valuation levels over time.
The document discusses peer-to-peer (P2P) lending in India. It provides an overview of P2P lending, including how it works and its growth in India and globally. Key points covered include RBI regulations for P2P lending in India, the technology used, professional opportunities, and an overview of how P2P lending platforms operate. The document is a presentation on P2P lending given by CA Nimesh Dedhia of PND Wealth Management IMF LLP.
This document summarizes the Global Frontier Technology Fund, which invests in early-stage technology companies around the world. The fund highlights that 85% of future GDP growth will occur outside the US and that it has a network of over 300,000 founders building companies in 49 countries. It invests in sectors like AI, blockchain, IoT, and financial technology. The fund also has partnerships to help portfolio companies scale globally.
The document provides guidance on when and how much venture capital early-stage companies should raise. It recommends initially raising small amounts from friends and family, using that to build a product and pilot customers. It then suggests raising an angel/seed round and keeping costs low for the first year to prove scalability. It outlines when companies should consider venture capital versus other options. The document also provides tips on pitching VCs, including optimal fundraising seasons, pitch deck structure, and services The Rudder Group can provide to help companies raise capital.
Crowdfunding is the practice of funding projects by raising small amounts of money from a large number of people, typically via the Internet. There are several types of crowdfunding: donation-based, reward-based, peer-to-peer lending, and equity-based. Crowdfunding provides benefits like access to capital and risk hedging but also poses risks like lack of due diligence and default risk for lenders. In India, while equity crowdfunding is still being regulated, other forms like donation, reward, and peer-to-peer crowdfunding are allowed through platforms such as BitGiving, Milaap, and Start51. SEBI is working on a
This document provides an outline for a 10 slide investor pitch deck. It includes suggestions for slide layouts, key questions to answer on each slide, and words of advice. The slides cover introducing the founder and product, defining the problem and solution, traction to date, market opportunity, competitive edge, team, fundraising details, why invest now, and a summary of 3 key points. The goal is to hook the audience, showcase growth and market potential, and make the case for why investors should back the company.
A short introduction to Venture Capital Term Sheets, and in particular the concept of liquidation preferences. Leo Dirac's talk from Ignite Seattle 4. For more detail, see http://embracingchaos.com/business
The document provides an overview of impact venture finance. It discusses why fundraising matters for entrepreneurs aiming to generate profit and impact. It covers the different types of capital available, including grants, debt, and equity, and how the optimal type of capital depends on the growth stage of the venture. The document also provides tips for entrepreneurs on how to effectively fundraise, including selecting the right investors, pitching to investors, and addressing common concerns investors may have around key aspects of the venture like the social issue being addressed, customer and product, business model, management team, growth strategy, and competitive advantage.
Central Bank Digital Currency (CBDC): Best Practice and Technical ConsiderationsAndry Alamsyah
- Andry Alamsyah is an Indonesian researcher and academic who focuses on topics related to social computing, big data, blockchain technology, and disruptive innovation. He has extensive education and experience in these fields.
- The document discusses considerations for the implementation of a central bank digital currency (CBDC) in Indonesia. It covers motivations, design choices around distribution models and form, as well as technical considerations regarding privacy, security, and interoperability. Adoption of CBDC could help with financial inclusion and efficiency goals.
Real Estate Investing 101: Private EquityPeerRealty
This document discusses various concepts related to real estate private equity funds and syndications. It defines different types of investment funds based on their target risk and return profiles, from core funds with the lowest risk and returns to opportunity funds with the highest risk and potential returns. It also outlines key components of a private placement memorandum, specifies versus blind asset pools, pari passu cost and profit sharing, preferred returns and promotes, catch-up provisions, clawback provisions, squeeze down formulas, and round tripping assets.
Presentazione per il corso "Strumenti e applicazioni del web"
Corso di laurea magistrale: Teoria e Tecnologia della Comunicazione
Università Milano-Bicocca
Notation Capital is a NYC-based pre-seed venture capital fund that seeks to partner with highly technical founders building scalable internet companies. They believe that operational and capital efficiency have increased dramatically, allowing companies to gain many users with little funding. As successful NYC startups mature, technical talent is leaving to start new companies, presenting opportunities. Notation is well positioned as experienced technologists and investors to help the next wave of founders with guidance and small amounts of early funding.
Frank Rimalovski gave a presentation on when and how to raise venture capital. He discussed the different types of venture investors including angels, seed funds, and venture capital funds. He explained how VC funds work using a 2-and-20 fee structure and how they aim to make returns through investing at low valuations and exiting at higher valuations through IPOs or acquisitions. Rimalovski also covered VC math through an example of startup ownership dilution over multiple funding rounds. He advised founders to seek funding after achieving product-market fit and provided tips for what VCs look for in investments.
The 1776 Super Accelerator and Discovery Fund aims to identify promising startups disrupting highly regulated industries and provide them support. The Super Accelerator will select "Seed C stage" companies with evidence of traction but not yet a venture round. It will help startups navigate regulations and develop partnerships over a 90 day program. The Discovery Fund will make initial $75k-$150k investments in Accelerator companies and selectively in non-Accelerator companies, tracking performance to identify winners. It will leverage feedback to increase odds of acquisitions and follow-on funding. The "Moneyball" approach uses networks and data to filter investments, aiming for early wins and potential great companies.
This document summarizes key aspects of entrepreneurial finance and venture capital. It discusses what venture capital is, how venture capital firms are structured, the advantages and disadvantages of venture capital for entrepreneurs, and common terms in venture capital agreements. It also provides an overview of venture capital in India, including some major venture capital firms, average fund sizes, and challenges in the Indian market.
The document discusses equity-based crowdfunding and the 2012 JOBS Act which allowed for equity crowdfunding. It provides statistics on the growth of crowdfunding from 2011-2012, including that over $1 billion was funded to over 1 million projects in 2011. It describes the various types of crowdfunding and outlines some of the rules and regulations around equity crowdfunding as defined by the JOBS Act.
Crowdfunding: major trends research notesChris Jones
The document discusses equity-based crowdfunding following the 2012 JOBS Act. It notes that crowdfunding allows small contributions from many individuals to fund companies or projects. The document outlines the growth of crowdfunding, including that over $1.5 billion was funded through 1 million campaigns in 2011. It is projected that crowdfunding will surpass $6.2 billion by 2013, driven in part by regulations from the JOBS Act.
The Ultimate Crowdfunding Guide - Part I (Jose Paul Martin)Jose Paul Martin
Crowdfunding refers to raising funds for projects from many people online in small amounts. There are four main types: donation, where people donate without expecting a return; rewards, where donors receive rewards based on donation amount; equity, where investors receive shares of a company in exchange for funds; and debt, where people loan money and receive interest payments. Crowdfunding makes it possible to fund ideas like startups, products, films, music, and more by widening the pool of potential investors beyond traditional sources like friends, family, banks, and venture capitalists.
Websites for Crowdfunding: A Beginner's Guide
Businesses, creatives, and nonprofit organizations now frequently use crowdfunding websites to generate money for their endeavors or causes. We will provide you with a thorough overview of crowdfunding websites in this article. In this article, we'll go over everything there is to know about crowdfunding, including its fundamentals, many varieties, advantages, and best practices.
Through the use of crowdfunding, people or organizations can collect contributions from a large number of people in order to fund a project or cause. Crowdfunding makes it possible for anybody to make tiny financial contributions to a project without relying on a small number of investors. Dedicated crowdfunding platforms or websites are often used to carry out crowdsourcing campaigns online.
Varieties of crowdsourcing:
There are various forms of crowdsourcing, such as:
Rewards-based crowdfunding: In return for their donations, supporters get gifts or benefits.
Crowdfunding for equity: Investors get a piece of the business or project back.
Donation-based crowdfunding: Participants make financial contributions without anticipating payment or stock ownership.
Crowdfunding for debt entails investors lending money to borrowers in exchange for interest.
Advantages of crowdsourcing:
Websites that facilitate crowdsourcing are very advantageous for nonprofit organizations, businesses, and artists. Among the advantages of crowdsourcing are:
Access to capital: Fundraising for businesses and organizations is made simpler by crowdfunding, which gives users access to a sizable pool of possible investors. A successful crowdfunding campaign can show that there is a market for a given product or idea, which can be helpful for attracting future investors or customers.
Increased visibility: Fundraising efforts for a project or cause can attract media attention, social media buzz, and word-of-mouth recommendations.
How to Run an Effective Crowdfunding Campaign
A successful crowdfunding campaign needs to be carefully planned and carried out. Here are some pointers for developing an effective crowdsourcing campaign:
1. Decide on a reasonable budget:
Setting a reasonable funding target for your crowdsourcing effort is crucial. Your financial target should be sufficient to pay for the costs of your project, but not too lofty as to be impractical. When choosing your funding target, you should also take the platform's fees into account.
2. Offer Attractive Rewards:
Provide Valuable Rewards Rewards are an important factor in encouraging supporters to donate to a crowdfunding campaign. Offer incentives that are relevant to and appealing to your target audience.
3. Craft a Strong Pitch:
A pitch that clearly and persuasively explains your project or causes and why it merits support should be part of your crowdfunding campaign. Use pictures, videos, and other types of material to engage your audience and communicate your narrative.
Crowdfunding involves raising funds from the public for specific purposes like creative projects, business ventures, or charitable causes. It allows organizations, groups, or individuals to collect small amounts of money from a large number of people through websites or social media. Crowdfunding offers opportunities for startups and small businesses to access funding. However, it also faces challenges in India like low public trust in online activities and a lack of investor friendliness. Regulations of crowdfunding depend on the type, such as debt crowdfunding falling under the RBI and equity crowdfunding under SEBI.
Crowdfunding for Women: The Capital Raising EqualizerPatch of Land
Crowdfunding for Women: The Capital Raising Equalizer is a presentation given by Reality Crowd TV Media Corporation to the University of Hartford Entrepreneurial Center for Women on 10/30/14.
"Crowdfunding for solar: model and implications for Thailand," presented by Sarinee Achavanuntakul at Chulalongkorn University, 31 July, 2013. Part of Thailand's Solar PV Roadmap Initiative - Economics/Finance Working Group #1:
Innovative Business Models and Financing Options for Distributed Solar Systems
The document discusses various financing opportunities for social entrepreneurs, including crowdfunding, grants, impact investors, angel investors, customers, and bootstrapping. It provides examples of successful crowdfunding campaigns like the FORM1 3D printer and Nikola Tesla museum. The document also discusses how to determine funding needs and outlines the capital lifecycle. Social entrepreneurship is defined as applying entrepreneurial principles to create sustainable social change, rather than private profit.
Presentation at the Vaughan, Ontario, Canada Business Series with Panelists: Jim Turner, VP of Ontario Securities Commission, Christopher Charlesworth and Hivewire, Adam Spence, SVX
Gain a better understanding of what crowdfunding is
Introduce you to the 9 stages of crowdfunding.
Understand the difference between Rewards, equity, and debt based crowdfunding.
Motivate you to use crowdfunding to achieve your organizations goals.
Understand how nonprofits use crowdfunding to their advantage.
OOMI Crowdfunding
Here's What You Don't Know About Fundraising That Could Save You Time, Energy and Money
How 3 Crowdfunding Platforms are Changing the Paradigm
http://www.oomifunds.org/
OOMI Crowdfunding, OOMI, Crowdfunding, Crowdfunding Platforms
This document provides information on how to succeed in a crowdfunding campaign. It discusses the different types of crowdfunding (peer-to-peer, equity, and donations), and highlights important platforms like Kickstarter, Indiegogo, RocketHub, Fundable, and Crowdfunder. Key tips include researching the best platform for your project, setting achievable goals, generating buzz to share your campaign, and looking at examples of past successful campaigns for guidance. Tax incentives like SEIS and EIS are also summarized.
This document provides an overview of crowdfunding, including its definition, how it works, types of crowdfunding, and key factors for success. It defines crowdfunding as raising funds from many people online, usually in small amounts. There are five main types: donation, reward, equity, debt, and royalty crowdfunding. Reward crowdfunding, where backers receive a non-financial reward, is one of the most popular models. The document also discusses the crowdfunding industry's growth, strengths like retaining equity and accessibility, weaknesses like potential for fraud, and opportunities like leveraging tech trends. It concludes that legal restrictions and high failure rates of small businesses pose threats but that
Crowdfunding has become a popular way for startups to raise money, with over £200M raised in the UK in 2012. The roundtable discussion analyzed the current state and future of crowdfunding. Attendees predicted crowdfunding will continue growing and possibly raise £15BN annually in the future. Crowdfunding offers businesses greater independence than venture capital and helps startups boost their visibility and profile. While still early, crowdfunding is seen as democratizing investment by allowing more individuals to invest smaller amounts and spread risk. The "wisdom of the crowd" provides public scrutiny that can strengthen businesses.
This document explains different types of crowdfunding for small and medium enterprises. There are three main types: peer-to-peer lending, where money is lent with interest; equity crowdfunding, where investors receive shares of a business; and rewards-based crowdfunding, where donors receive non-financial rewards. The process involves researching platforms, submitting an application, creating a compelling pitch, motivating supporters during fundraising, and post-campaign activities. Crowdfunding offers advantages over traditional funding such as validating demand and accessing expertise from a large audience.
Our event on 2 March for SMEs interested in finding out about the creation and protection of IP, cashflow finance and/or broadening access to alternative sources of funding.
It was aimed at digital and technology businesses, and as well as an overview of the opportunities for SMEs in the sector, expert colleagues from Metis Partners (intellectual property specialists), Jumpstart (specialists in R&D tax credits) and the Lending Crowd (insights on crowdfunding). The session was a short, sharp, non-technical guide for businesses to consider some potentially new approaches to practical aspects of successful innovation.
This document provides information on finding funding for a business. It discusses four main ways to get money: equity, debt, public sector grants, and crowdfunding. For equity funding, options include personal equity, venture capital, private investors, and crowd funding. Public sector grants and how to apply for them are also covered. The document then focuses on crowdfunding, defining it, describing the different models of donations, rewards, debt, and equity crowdfunding. Key tips for crowdfunding include developing an idea, choosing the right platform, creating a compelling pitch, and maintaining communication after funding. Overall, the document aims to help understand different funding options and provide advice for seeking and applying for funds successfully
This document summarizes a report by Nesta on crowdfunding opportunities and challenges for charities, community groups, and social entrepreneurs. It finds that while awareness of crowdfunding is high, few organizations actually use it, largely due to lack of skills, knowledge, and capacity. Donation-based crowdfunding is most commonly used to fund events, campaigns, community spaces, and equipment. While crowdfunding provides opportunities to mobilize volunteers and fund projects that otherwise couldn't be funded, challenges include difficulty funding large projects and potential to disadvantage those without digital skills. The report recommends organizations try crowdfunding, partner with platforms, and funders provide support to build skills and integrate crowdfund
Overview of the potential financing options available to Cypriot startups based on their stage of growth. Exploring the key information investors are looking for in a startup by exploring a pitch deck.
The document provides an overview of crowdfunding and discusses traditional funding methods for entrepreneurs. It defines the four main models of crowdfunding: donations-based, rewards-based, lending-based, and equity-based. The document also highlights that crowdfunding transactions are expected to exceed $34 billion in 2015 and overtake venture capital funding. It features perspectives from leaders in the crowdfunding industry on topics like peer-to-peer lending and increasing financial inclusion through alternative credit scoring models.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
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2. Crowdfunding Slide number 2
INTRODUCTION
“Imagine being in contact with 100,000 like-minded people who each want to invest £10 in your business, project
or venture online. That’s the basis of crowdfunding – literally sourcing funds from a crowd.”
UK Crowdfunding Association
www.ukcfa.org.uk
The democratic nature of crowdfunding ensures promising business have access to finance
3. Crowdfunding Slide number 3
SUPPORTING INNOVATION
Disruptive financial services supporting innovation and creativity in the economy
www.skybell.com
www.hiddenradiodesign.com
www.scanadu.com
4. Crowdfunding Slide number 4
Contents
* 2015 average exchange rate of £1 = $1.47 used throughout the presentation.
INTRODUCTION 2 – 4
FINANCE FOR NEW VENTURES 5 – 14
THE CROWDFUNDING PROCESS 15 – 23
WHAT DO INVESTORS LOOK FOR? 24 – 31
THE PITCH DECK 32 – 39
CONCLUDING REMARKS 40 – 44
APPENDICIES 45 – 46
6. Crowdfunding Slide number 6
SOURCES OF FINANCE FORANEW BUSINESS
What are the options for raising finance when starting a new venture?
Savings?
Family and
friends?
Government
support?
Bank?
Alternative
finance?
7. Crowdfunding Slide number 7
TRADITIONALBANK LENDING MODEL
Risk/return, tools + capabilities, judgement
Provide credit and manage risks to maximise returns
Savers/investors Bank Borrower
8. Crowdfunding Slide number 8
ALTERNATIVE FINANCE
Alternative approaches to borrowing from a bank
Venture Capital (VCs)
Super angels (mid-2000s)
Crowdfunding (late-2000s)
Growth in internet capabilities and usage (mid-2000s)
Traditional source of funds for start-ups
Individuals making many individual early stage deals
Roots in microfinance and online communities
9. Crowdfunding Slide number 9
IT’S NOTHING NEW …
• Crowdfunding efforts were had in the 18th century
when a large pool of investors would finance large
pieces of work by individual writers and musicians.
• Joseph Pulitzer launched a fundraising campaign in the
1880s to finance for the granite plinth required for the
Statue of Liberty.
• Pulitzer launched the campaign in his New York
newspaper and eventually raised the required money
from more than 160,000 donors.
• One of the earliest crowdfunding platforms
(www.gofundme.com) was launched in 2008 after its
co-founder could not find a practical and efficient way
to help the people affected by Hurricane Katrina.
Crowdfunding has been around for a very long time
10. Crowdfunding Slide number 10
FOUR MAIN TYPES OF CROWDFUNDING
Each type involves a distinctive relationship between the beneficiary and benefactors
Equity/shares Debt/loans
Rewards based Donation/charity
11. Crowdfunding Slide number 11
SMALL SAMPLE OF CROWDFUNDING PLATFORMS
An extensive number of platforms offering diverse opportunities
12. Crowdfunding Slide number 12
THE GLOBALCROWDFUNDING MARKET
Summary statistics between 2012 and 2015
North America dominates the crowdfunding industry with 50% of the global share in 2015, followed by Asia (31%) and Europe (19%). Crowdfunding is in its infant in Africa,
Oceania, and South Africa with the three regions combined accounting for less than 1% of the global share in 2015.
Source: 2015CF Crowdfunding Industry Report, Massolution
13. Crowdfunding Slide number 13
THE UK CROWDFUNDING MARKET
Summary statistics for 2015
Source: Pushing Boundaries: The 2015 UK Alternative Finance Industry Report, Nesta
SMEs
Small
Business
Donation/
charity
Equity
Approx. 20,000 British
SMEs received £2.2bn
in business funding
through online
crowdfunding.
Peer-to-peer lending
supplied the equivalent
of 12% of new bank
loans to small business.
Donation/charity based
crowdfunding is the
fastest growing model –
up annually by circa.
500% to £12m.
Equity based
crowdfunding is
growing fast – up by
295% from £84m in
2014 to £332m in 2015.
14. Crowdfunding Slide number 14
THE GROWING POPULARITYOF CROWDFUNDING
• Advances in technology and the internet has facilitated this type of mass lending, in addition to consumers growing familiarity to online
financial payments (e.g. PayPal) and electronic markets (e.g. EBay).
• However, crowdfunding popularity has also been promoted by the ongoing regulatory pressure to transform the banking industry and banks’
challenges of addressing legacy issues which has reduced lending to SMEs and new ventures.
• Banks have viewed lending to SMEs as relatively more risky following the 2008 financial crisis and there has been a partial withdrawal from
lending to this asset class.1
• Regulators require banks to hold more capital against the loans they issue and the separation of retail banking and other activities, which
causes certain type of SME lending to “fall between the cracks”. For example, www.growthstreet.co.uk is a crowdfunding platform established
to offer overdraft facilities to SMEs due to this separation.
• In addition, most crowdfunding platforms are automated, which reduces their overheads and allows them to provide a low-cost service
compared with traditional lenders who are contending with managing their costs.
Advances in technology and challenges faced by traditional banking
1 Armstrong, A., Davis, E., Liadze, I. and Rienzo, C. “Evaluating changes in bank lending to UK SMEs over 2001-12 – Ongoing tight credit?” Department for Business Innovation and Skills. April 2013.
16. Crowdfunding Slide number 16
ANALTERNATIVE LENDING MODEL
Tools + capabilities
Crowdfunding omits the bank from the traditional lending model
Savers/investors Borrower
Risk/return and judgement
Automated marketplace
lending platform
17. Crowdfunding Slide number 17
MAIN CROWDFUNDING TYPES
1
DONATION OR CHARITY
Charities and social enterprises use this method
where the crowd give money to great causes they
believe in and do not expect a financial return.
2
REWARD
Good causes, ventures developing new products,
authors, film producers, and other creative arts use
the rewards method. The money pledged isn’t repaid
but benefactors receive interesting and often novel
“perks”.
3
DEBT OR LOAN
This method is like having a bank loan but from
many individuals and not a single institution.
Financial and business plans are presented and
analysed by the crowd who decide whether to
lend or not – usually on an all or nothing basis.
The loan has to repaid plus any interest agreed
upon.
4
EQUITY OR SHARES
This method involves raising finance by giving away a
share of the venture. It is a similar process to issuing
shares on the stock market or offering a stake to
Venture Capitalists but at a lower cost. The crowd are
attracted by a large “upside” potential in often young
businesses in expanding markets. Often the equity
may be wrapped in an efficient tax wrapper which
make campaigns very attractive.
The simplest form of crowdfunding is “donation”; the most complex is “equity”
18. Crowdfunding Slide number 18
REWARDS BASED CROWDFUNDING
• Authors, artists, musicians, and film producers
offer early releases of their books, pictures,
music, film as rewards to backers.
• Backers receive rewards based on the amount of
funding they commit.
• The rewards associated with different funding
levels are defined on the crowdfunding
platform.
• This method is popular as it allows them to
receive payment for their creation before it is
produced and increases the interest in their
project.
Ventures offer an incentive for participating in funding a new project
• Ventures developing new projects also use
rewards based crowdfunding.
• In essence, rewards based crowdfunding allows
new ventures to sell their product before it is
produced.
• Finance raised is used to cover the cost of
production.
• The venture’s vision and product is advertised
using promotional videos and social networking.
• Typically, backers receive their rewards within
months following a successfully funded project.
19. Crowdfunding Slide number 19
RISK/RETURN OF DEBTAND EQUITY
The financing cost depends on the riskiness of the venture
• Debt/loans type of crowdfunding is when savers lend money to a venture, who then repays the loan on a regular
basis along with any interest agreed upon.
• The venture has to repay an agreed amount of their debts before taking any profit and if it goes into liquidation
then the creditors will get paid first. Because of this, debt/loans is a lower risk of crowdfunding investment
compared with equity/shares.
• Equity/shares type of crowdfunding is when investors buys shares in a venture and become part owners.
• Investors make a return on their investment by either being paid a dividend or by selling their shares at a later
date when the venture’s value has (hopefully) increased. The management team will decide if a dividend is paid,
how much, when it will be paid, and if and when to sell the venture. Therefore, this type of crowdfunding tends
to be higher risk as there is no certainty of the amount or timescale for returns.
• Equity/shares type of crowdfunding should have higher returns than debt/loans type to compensate for a higher
level of risk.
20. Crowdfunding Slide number 20
DEBT VS. EQUITY
DEBT OR LOAN EQUITY OR SHARES
Advantages
1. The lender has no management say or direct entitlement to
profits from the venture.
1. Investors can sometimes offer valuable advice and assistance
based on their own experience and educational background.
2. Only obligation to the crowd is to repay the loan and any interest
on time.
2. Repayment requirements are flexible.
3. Interest payments (but not principle payments) are a tax
deductible business expense.
3. If the venture loses money or cease to exist, it is most likely that
investors will not have to be repaid.
Disadvantages
1. The venture will have to make loan repayments during start-up
or expansion, when the need for cash is greatest.
1. Overall, investors will require a greater share of the profits than
the interest on a loan.
2. Additional security may be required to obtain a loan, which may
place personal assets at risk if the venture fails.
2. Investors have a legal right to be informed about all significant
events and changes to the venture.
3. Under most circumstances the individual can be personally sued
for any unpaid balance of the loan even if it’s unsecured.
3. Investors can take legal action if they feel their rights are being
compromised or if they are mislead by the venture’s
management team.
The choice depends on future cash flow and management objectives
21. Crowdfunding Slide number 21
THE MECHANICS OF CROWDFUNDING
The process involves an exchange of agreements and a flow of money
Lender Borrower
Investor Entrepreneur
Platform
Loan agreement
Shares/equity
Investment agreement
Platform operator’s bankLender/investor’s bank Borrower/entrepreneur’s bank
Platform agreement Platform agreement
Transferrequest
Transferrequest
Funds transfer Disburse loan/investment
Funds transfer Repayment/dividend
flow of agreements
flow of money
* The flow chart excludes fees/charges incurred from using the crowdfunding platform.
22. Crowdfunding Slide number 22
Lender Amount Rate Amount x Rate
1 £50 5% 2.50
2 £25 7% 1.75
3 £30 8% 2.40
4 £60 10% 6.00
5 £70 12% 8.40
6 £15 12% 1.80
7 £50 13% 6.00
Total £250 22.85
THE COST OFALOAN (AVE. WEIGHTED RATE)
Example of a venture wanting to borrow £250 in a reverse auction where the lowest bids win
Lender 7 is excluded
from the final loan offer
as the £50 is not
needed to raise the
£250.
The overall rate of the
loan is calculated using
the average weighted
mean.
Overall rate = 22.85 /
£250 = 9.14%*
A reverse auction ranks
loans according to their
rate and date offered.
Some crowdfunding
platforms fix the rate
offered based on the
venture’s riskiness.
* The above calculations excludes fees/charges incurred from using the crowdfunding platform.
23. Crowdfunding Slide number 23
THE COST OF EQUITY
Example of a venture initially valued at £20,000 with substantial growth over 12 months
31 Dec. 2014 venture’s
valuation: £20,000
31 Dec. 2015 venture’s
valuation: £80,000
25% equity/share given to investors
25% x £20,000 = £5,000
25% owed by equity/share investors
25% x £80,000 = £20,000
Venture valuation
increases by 400% in 12
months
25. Crowdfunding Slide number 25
VALUATION FOR EQUITY/SHARE CAMPAGINS
• A new venture’s value is derived primarily by the market forces in which the industry operates. In particular, the current value of a venture
is a amalgamation of today’s market forces and today’s perception of what will happen in the future.
• If the venture is in a dejected industry where the market is in decline and the outlook for the future isn’t positive, then what an investor is
willing to pay for the venture’s equity is going to be substantially reduced despite any success the venture is currently having … … …
• … … … unless the investor is either privy to information about possible market shifts in the future or is willing to take the risk that the
venture will be able to change the market.
• Despite valuations being an art, they are not entirely free from any quantitative analysis. However, the method of valuation is mostly
driven by an investor’s sector experience about what the average type of deal is priced at both entry and at exit.
• By looking at the whole sector, an investor will see how other similar ventures are being valued by the market on some basis (e.g. a
multiple of revenue or EBITA). This, in turn, can then be applied to the venture as a proxy for its current value.
• Estimating the exit price will allow an investor to calculate what their returns will be on any valuation relative to the amount of money
they put in.
Valuation is an art and not an exact science
26. Crowdfunding Slide number 26
PRE-MONEYAND POST-MONEY
Two important concepts in valuations are:
1. Pre-money - This is the venture’s valuation before it receives outside finance or the latest round of financing.
2. Post-money - This is the venture’s valuation after it receives outside finance or its latest capital injection.
Consider the example where everyone agrees the value of the company is £1,000 and that investors want to put in £250.
The ownership percentage will depend on whether this is a £1,000 pre-money or post-money valuation. If the £1,000 valuation is pre-money, the venture is valued at £1,000
before the investment and £1,250 after the investment is made. If the £1,000 valuation takes into account the £250 investment, then it is referred to as post-money.
1. Pre-money – £1,000 (venture’s share @ 80%) + £250 (investors’ share @ 20%) = £1,250
2. Post-money – £750 (venture’s share @ 75%) + £250 (investor’s share @ 25%) = £1,000
The dilution of ownership is an important issue during the capital raising process. Pre-money or post-money valuations can affect the ownership percentage in a significant
way due to its impact on the amount of value being placed on the venture before investment. If the venture is valued at £1,000, it is worth more if the valuation is pre-
money compared to post-money because the pre-money valuation does not include the £250 invested.
The effect of an investment on a venture’s valuation
27. Crowdfunding Slide number 27
MOMENTUM, MARKETS,AND MANAGEMENT
1
MOMENTUM
• The number one factor that investor look at is momentum – they want to see traction.
• Communicate early so people can see how the venture develops over time.
• Signs of momentum are growing beta customers, new pricing plans, different positioning, greater market insights, good press
coverage.
• Momentum also includes product development.
2
MARKETS
• Everyone wants to believe the venture can be big one day. Investors prefer to invest in big markets with ambitious teams.
• There are successful ventures built on smaller markets but the money will “flow” to the large markets.
• Not only will the venture need to describe a big and exciting market but also how it will make progress pursuing that market.
3
MANAGEMENT
• It takes a miracle to get an investment if people aren’t impressed with the venture’s management team.
• The venture must highlight any relevant experience to show they have a deep understanding of the problem they are trying to
address.
• A great team – passionate entrepreneurs who are willing to make their idea work at all costs, have done sufficient homework that
they know what they know and they know what they don’t know.
The main factors considered when investors consider investing
28. Crowdfunding Slide number 28
WHAT INVESTORS WANT TO KNOW (1)
1) Churn is a measure of the revenue potential of each customer. For example, a 3% monthly churn rate implies half of the customers will be lost within two
years. A higher churn will make it difficult to grow revenue over time because of the turnover in customers.
2) Contribution margin measures profit per unit, without considering fixed costs and is calculated by taking the total revenue generated by selling one unit
and subtract the variable costs of selling that unit. In most new ventures, costs associated with sales and marketing tend to form the largest proportion of
contribution margin cost (i.e. the variable cost of selling a unit). The greater the contribution margin, the more profitable a venture is on a unit basis and
the more can be spent on sales and marketing to acquire customers and fuel growth. However, contribution margin has to be put into context by taking
account of fixed costs.
3) Gross margin is a measure how expensive it is make the product and is calculated by taking the revenue and subtracting all the Costs Of Goods Sold
(COGS). COGS are the cost of raw materials and expenses associated directly with the creation of the venture’s product/service, not including fixed costs
such as rent. Net margin takes into account all COGS and is therefore a more rigorous measure of profitability.
4) Net income (or the bottom line or burn rate if negative), is the revenue minus all the costs incurred. The burn rate represents the minimum amount a
venture needs to raise to breakeven. By comparing the net income with cash and revenue the financial profile of the venture can be determined and its
future valuation, as well as any follow-on financing risk.
Ten of the most important metrics for investors when valuing a venture
29. Crowdfunding Slide number 29
WHAT INVESTORS WANT TO KNOW (2)
5) The most significant controllable expense for a venture is non-personel marketing spend, which typically includes advertisement and events costs. This
expense can be turned on and off from month to month and it provides an indication of the maturity of the marketing process. The optimal non-personel
marketing spend will depend on the payback period.
6) Revenue per employee is a measure of how efficient a venture is in using technology to bring their product/service the market. By their very nature, some
ventures will need more people to bring the product/service to the market.
7) Revenue growth represents how quickly a venture can grow given its current way of doing business. It is a measure of how quickly the venture is
expanding and helps identify trends in order to gauge revenue growth over time. The projections for this metric indicate the potential profitability of the
venture.
8) Salary is the single biggest expense for most ventures. Comparing the salaries across functional areas gives a sense to how a venture pays its employees
relative to market rates. Low salaries could create employee retention problems in the future while excessive salaries reduce the venture’s ability to
finance its growth.
9) Sales efficiency (or payback period) is a gauge for how aggressive the venture can be at marketing and selling its product/services. The longer the payback
period, the greater the risk that a customer churns and the amount invested in marketing to acquire the customer is lost.
10) Sales quotas provide indications of how easily the product/service is sold and how well run the sales team is. Sales quotas will depend on the
product/service type, where smaller predictable deal size would be expected for new ventures along with momentum in the number of customers closed
per week.
Ten of the most important metrics for investors when valuing a venture
30. Crowdfunding Slide number 30
STAGES OF FINANCE (1)
1. Early stage finance
• Relatively small amounts of finance to carry out research or feasibility studies, prove concepts, complete product development, initial marketing, and
organising the venture team.
• The focus is on getting to a “proof-of-concept” of a product/service, test marketing, strategy, or financing patent and intellectual property
protection.
2. Development or expansion finance
• Once there is proven market acceptance, there needs to be significant investment in marketing and sales. Finance for initial equipment is required
for putting the plan into action, creating partnerships with major suppliers or customers, and establishing an executive management team for the
venture.
• Once large orders are received and there is momentum in sales, investment is needed for scaling production to meet production demands.
• Finally, shifting the production support from development to execution, including transitioning the venture team from entrepreneurial to
professional management practices.
The different stages of equity/shares investment and their effect on the venture
31. Crowdfunding Slide number 31
STAGES OF FINANCE (2)
3. Acquisitions and buyout finance
• Once the venture is well established, finance may be required to facilitate aggressive expansion (e.g. buying up competitors or securing executive
management teams from rival ventures). The focus is on buying-up partners for national expansion plans, and/or establishing the venture in global
markets.
4. Recommence finance
• Finance may be required by well established ventures to utilise a new business model, new location, or a new product/service. Or finance may be
required to “salvage” operations and assets before selling the venture.
The different stages of equity/shares investment and their effect on the venture
33. Crowdfunding Slide number 33
PRESENTING THE STORY
• Crowdfunding is not a process of putting a project on platform (e.g. Kickstarter, Seedrs) and waiting for the cash to roll in.
• Not only is careful planning required to deliver a product/service on time but also to partake in a crowdfunding
campaign.
• Successful campaigns are in conversation with hundreds or thousands of people before they even launch. They do this
to understand what their customers are interested in and to get them captivated by the new venture.
• The product/service launch will receive much more interest if there are people already engaged in the venture’s mission.
• Adequate homework, a clear strategy for engagement, well-defined production processes, the correct platform, and a
project that catches the imagination and creates an emotion will help achieve the venture’s crowdfunding target.
• Kickstarter has provided a useful online “Creator Handbook” for tips on planning a crowdfunding campaign (see
www.kickstarter.com/help/handbook).
• Cautious is needed with information provided on a crowdfunding platform as ideas and concepts can be stolen if they
aren’t protected (copyrighted) correctly.
Communication, communication, communication
34. Crowdfunding Slide number 34
THE PITCH DECK
• A pitch deck is crucial for debt/loan and equity/shares crowdfunding campaigns but some of the concepts can be used for
rewards and donations types.
• It is a brief presentation to provide the audience with a quick overview of the venture’s goals and objectives.
• A pitch deck is not expected to answer all possible questions. It is to open peoples minds to the venture’s objectives and get
them excited to know more.
• It includes enough information to present the story but not too much as to overwhelm people or have the story lose clarity and
focus. The big points should be presented in a clear way and some questions are left unanswered.
• Compelling decks are concise, typically 10 – 14 pages. Separate documents, such as executive summary or dedicated technical
documents, can be used to cover complex product/service images and descriptions, patent details, technical explanations, etc.
• Pitch decks are an evolving document, continually being updated to reflect the rapid learnings and growth experienced by a new
venture.
• Eleven core slides are included in most initial pitch decks .. .. ..
A key document for communicating with lenders/investors
35. Crowdfunding Slide number 35
CORE SLIDES INAPITCH DECK (1)
1. Vision
A very short memorable summary that combines the goals and objectives of the venture.
Communicate all aspects of the venture’s history, current situation, and future
2. Traction
The venture’s timeline with key milestones achieved to date and expected growth over the coming years,
Press, partnership, and accolades, and any customer success stories testimonials.
3. Market opportunity
A definition of the market and the business environment,
The total market size in monetary terms and what’s the venture’s potential share,
Any macro trends and insights to support the venture’s vision.
36. Crowdfunding Slide number 36
CORE SLIDES INAPITCH DECK (2)
Communicate all aspects of the venture’s history, current situation, and future
4. Problem and current solutions
A critical analysis of the real problem solved by the venture,
Current solutions, including what they are doing right and wrong (competitors are not demeaned!).
5. Product/service
An explanation of how customers will use/value the venture’s product or service,
Images and visuals are better than text to tell customers’ story.
6. Business model
A description of exactly who are the customers and the pricing model,
The number of customers to date and the revenue generated,
An explanation of the life-time value of an average customer (e.g. how many months are they with the venture, how much money do they spend).
37. Crowdfunding Slide number 37
CORE SLIDES INAPITCH DECK (3)
7. Market approach and strategy
A critical explanation of how target growth rates will be achieved,
An outline of where potential customers are currently looking for a solutions to their problem,
The venture’s strategy to get ahead of the competitors in finding new customers.
Communicate all aspects of the venture’s history, current situation, and future
8. Team and key stakeholders
Key team members, including any relevant prior positions and successes,
Relevant expertise and a description of which roles are the keys to success of the venture.
9. Financials
3 - 5 years of financial projections,
Key and critical assumptions in the model of expenses, customer conversion, and market penetration.
38. Crowdfunding Slide number 38
CORE SLIDES INAPITCH DECK (4)
Communicate all aspects of the venture’s history, current situation, and future
10. Competition
An identification of the competitors and an explanation of why they have succeeded, and how does the venture truly differentiate from them,
The venture’s advantages.
11. Investment
How much capital the venture is looking to raise and with what type; equity, debt, or convertible notes1,
The time line for the crowdfunding campaign,
Any existing and notable investors,
How the proceeds will be used, e.g. sales and marketing, new hires, product or service development, capital expense/equipment.
1 Convertible notes are sometimes used during shares/equity crowdfunding campaigns when the venture wants to delay establishing a valuation until a later round of funding. Convertible campaign allows
current investments to be converted into equity in the future, at a discount compared to other investors.
39. Crowdfunding Slide number 39
DECIDING ONAPLATFORM
• What type of funding is required? Donation, reward, debt, or
equity?
• Is the venture for a specific sector, geography, or theme?
• What is the theme of the platform? General vs. niche
platforms?
• Which platforms do the donners, customers, lenders, investors
use?
• Which platform do competitors use?
• What support does the platform provide?
• Which social application (e.g. Twitter, YouTube) are provided to
share news?
• How easy is it to find the platform through online search
engines?
• Is the platform a member of the UK Crowdfunding
Association?
The right platform can help achieve a crowdfunding target
Abundance is a loan/debt crowdfunding platform for social and environment
ventures.
The black UK Crowdfunding Association’s logo is assigned to platforms that
have signed up to a specific code of practice.
41. Crowdfunding Slide number 41
SUMMARY
• Traditional banking institutions face a number of challenges that has reduced their lending to new
ventures.
• Advances in technology and the internet capabilities, along with the demand for alternative finance, has
facilitated the growth of crowdfunding.
• The four main types of crowdfunding are equity/shares, debt/loans, rewards base, and donation/charity,
and each has its own advantages and distinct relationship between the beneficiary and benefactors.
• Donation/Charity – the crowd gives money to great causes they believe in and do not expect a financial
return.
• Reward – the money pledged isn’t repaid but benefactors receive interesting and novel “perks”.
• Debt/Loan – this is similar to having a bank loan but from many individuals and not a single institution.
• Equity/Shares – a share of the venture is given to investors in return for finance.
• The simplest form of crowdfunding is “donation/charity” whereas the most complex is “equity/shares”.
Crowdfunding is becoming a popular financing option for new ventures
42. Crowdfunding Slide number 42
SUMMARY
• The financing cost will depend on the riskiness of the venture.
• The amount of finance that should be raised depends on future cash flow, management objectives, and the
stage of the venture.
• Investors will look at various metrics to decide upon the feasibility of the venture. The main factors
considered are momentum, markets, and management.
• Communication is critical in a successful crowdfunding campaign and a pitch deck is used to communicate
all aspects of the venture’s history, current situation, and future.
• A variety of crowdfunding platforms exists, and the choice of platform will depend on the objective and
type of campaign.
Crowdfunding is becoming a popular financing option for new ventures
43. Crowdfunding Slide number 43
LESSONS LEARNT
• Considerable time and effort is needed to run a successful crowdfunding campaign. The amount of time required can be
two to three times more than borrowing from a traditional lender/investor. The information presented during a
crowdfunding campaign must be to the same standard as required by other finance raising methods.
• The flow of individual questions from would be lenders and investors and be substantial and most will be shown on a
public forum. A video interview can be very useful to reduce the flow of questions and stimulate interest in the venture.
• The number of sophisticated investors who write cheques of £25,000 and above is small, so large crowdfunding target
amounts will require hundreds of small investors. A venture can impose a minimum investment amount.
• Avoid investors that are “fishing” – time is short and it is not possible to talk with all lenders and investor.
• When producing the pitch deck, avoid the formatting pitfalls of PowerPoint by saving it as a .pdf document.
• US lenders and investors are excluded from UK crowdfunding platforms, so if US finance is a target then the venture will
need to be accessed through a US platform.
• The venture’s reputation may be damaged if it isn’t full funded therefore it is important to set practical financing targets.
Useful tips to take full advantage of the crowdfunding process
46. Crowdfunding Slide number 46
USEFUL RESOURCES
• www.ukcfa.org.uk – the UK Crowdfunding Association website
• www.nesta.org.uk – UK charity with the aim of bringing innovative ideas to life
• www.alternativebusinessfunding.co.uk – an introduction to alternative finance platforms with case studies
• www.british-business-bank.co.uk – provides the business finance guide and links to government backed finance options that
ventures can get involved with
• www.crowdfundbeat.com – international news and information for the crowdfunding industry
• www.crowdexpert.com – international news site featuring how-to guides, interviews, and a directory of platforms
• www.crowdsourcing.org – website for Massolution, a crowd-solution research and advisory firm