Fundraising Made Easy: Crowdfunding

1. Fundraising
Made
Easy:
Crowdfunding
Alberto Giusti
@albgiusti
alberto.giusti@42advisory.co
Turin, 28 July 2016

2. Who I am
2
@albgiusti
alberto.giusti@42advisory.co

3. 3

4. What’s not crowdfunding
4

5. 5
The crowdfunding process

6. Crowdfunding (a form of crowdsourcing) is the practice of
funding a project or venture by raising monetary contributions
from a large number of people, today often performed via
internet-mediated registries, but the concept can also be
executed through mail-order subscriptions, benefit events, and
other methods.
Crowdfunding is a form of alternative finance, which has
emerged outside of the traditional financial system.
Definition
Source: Wikipedia

7. Tipes of crowdfunding

8. Crowdfunding industry
Total
Global
Crowdfunding
Industry
fundraising
volume
in
2015:
$34
Billion
(+112%
2015
vs.
2014)
Source: Global Crowdfunding Market To Reach $34.4b In 2015, Predicts Massolution’s 2015cf Industry Report.

9. Crowdfunding geography
Source: Global Crowdfunding Market To Reach $34.4b In 2015, Predicts Massolution’s 2015cf Industry Report.

10. Crowdfunding campaign benefit
Source : Capital Crowdfunding Advisor - February 2014.
• The
average
company
invested
135
hours
of
staff
Cme
in
their
campaign,
with
an
average
of
45
days
engagement.
• The
average
crowdfunding
campaign
returns
$813
dollars
for
every
hour
invested.
• The
average
company
spent
just
over
$2,100
on
the
campaign
itself
(video,
markeCng,
social
media
markeCng,
etc).

11. Immediate ROI in crowdfunding
• The
average
increase
in
quarterly
revenue
across
all
types
of
crowdfunding
was
$12,675.
This
represents
an
average
increase
of
24%
quarter
over
quarter.
• Equity-­‐based
crowdfunding
resulted
in
a
quarterly
increase
of
35%—not
including
funds
raised
via
the
equity
round.
Source : Capital Crowdfunding Advisor - February 2014.

12. Crowdfunding: impact on jobs
• 87% of firms either had or intended to hire new
employees as a direct result of having raised equity
or debt financing via crowdfunding.
• Average of 2.5 new employees.
• The
larger
the
firm
size,
the
more
likely
the
firm
would
reinvest
crowdfunding
proceedings
into
new
employee
hires.
Source : Capital Crowdfunding Advisor - February 2014.

13. Professional Investors Engage with Crowdfunding
Source : Capital Crowdfunding Advisor - February 2014.

14. Crowdfunding is more than money

15. It’s all about Trust
• People will give if they like the product, like you (or
the company) and believe in the idea behind it. Be
transparent and build trust!
• Getting positive press/media can boost your
credibility and draw attention to what you’ve already
accomplished.

16. The constellation of Trust

17. Crowdfunding as start-up “easy” money
Source: Crowdfunding’s Potential for the developing world - 2013

18. Crowdfunding is becoming the new angel investor…
Source: Crowdfund Capital Advisors, EquityNet
• The average fundraising goal for
business startups is over $500,000
across all industries
• Energy & Utilities and Financial
Services & Real Estate have the
highest average fundraising goals,
while Consumer Products and
Services have the lowest
1,612,499
807,185
1,657,615
1,074,991
697,915
1,080,417
2,218,354
2,032,514
1,613,550
1,020,569
1,059,402
1,347,458
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Average
Funding
Goal
by
Industry
(2007
-­‐ 2015)

19. … for 25% of equity on average
On average, business startups gave up
nearly a 1/4th of their equity to crowd
investors
26.81%
30.85%
34.58%
25.38%
35.08%
29.54%
31.30%
43.11%
30.99%
32.18%
24.47%
36.68%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Average
Investor
Equity
by
Industry
(2007
-­‐ 2015)
Source: Crowdfund Capital Advisors, EquityNet

20. In some countries better than others

21. Netherlands docet

22. How to plan a crowdfunding campaign

23. • INSPIRE the audience with your VISION
• ILLUSTRATE your VISION with CLARITY
• BUILD CONFIDENCE that you can realize your
Vision
Vision, Clarity, & Confidence

24. • Research
• Have you done this before?
• Have you researched others who have?
• Budget Development Carefully
• No going back to “the well”
• Your reputation is on the line
• Budget Publishing Carefully
• Marketing & PR
• Distribution Costs
Know What You’re Building

25. Research Similar Crowdfunding Projects
• What funding ranges worked?
• What reward prices worked?
• Graph the revenue per price point
• What reward items / content worked?
• What social missions worked?
• What social rewards worked?
Campaign Planning

26. Research Similar Crowdfunding Projects

27. What’s about time in other projects?

28. Understanding Cost Of Goods
• Digital Distribution
• PC - Costs of fullfilment
• Mobile - Watch out for iOS costs
• Design and Sourcing
• Everything you do takes time away from your Project
• COG Challenges
• Low volume manufacturing = high unit costs
• More reward items = lower production per item
Campaign Planning

29. Vision, Clarity, & Confidence
• KISS Keep It Simple (or you're the one that is) Stupid
• Hierarchy of Information
• Video
• Graphics
• Text
• FAQ
• Video should be Professional but PERSONAL
• Don’t overproduce it.
The pitch

31. This isn’t a Sprint - it’s a Marathon
The Arc of a Campaign

32. You Must Open with a BANG
• You need to BUILD an audience BEFORE launching
• Go live where they live - they need to know you
• Share with them your vision beforehand
• Get them psyched to be there on day one
• You need to MARKET your Crowdfunding
• Use Social Media Missions to spread the word
• Network with other Crowdfunders, Press and Platforms
The First 48 Hours

33. You need to BUILD an audience BEFORE launching

34. Keep the Energy UP
• Connect with the audience
• Answer questions – promptly
• Say thank you – personally
• Participate in the dialog – constantly
• Schedule exciting new updates – Regularly
• Create activities to keep the audience engaged
The 26 Days of Hell

35. Create activities to keep the audience engaged

36. Increase the Energy
• Kickstarter’s 48 Hour Email
• Hold something EXCITING to be revealed
• Now it's a SPRINT - go to FULL COURT PRESS
The Last 48 Hours

37. Takeaways
37
• “Crowd” before and over “funding”
• Crowdfunding is more than money
• Crowdfunding campaign = marketing campaign, not
fundraising campaign
• Crowdfunding change business models: fans&investors
become the marketing team, crowdsourced engagement,
new ownership models

38. Contacts
Alberto Giusti
@albgiusti
alberto.giusti@42advisory.co
Feedbacks on https://ekoodo.com/alberto-
giusti/en