Bootstrapping, Crowdfunding, Hackthons & Competitions

1. Bootstrapping,
Crowdfunding, Hackathons
& Competitions
Funding Models

2. Bootstrapping
• Use of personal, friends/family funds to launch idea
• Most common and least costly startup funding
• Cost-saving strategies: working digitally, bartering,
non-monetary compensation.
• Maximizing sales to existing customers
• Low-cost, viral marketing
• Creative control, but growth limited to funds
available vs. outside funding, less control/equity, and
more potential growth
• Best suited to areas/ideas that can grow
incrementally and independently

3. Bootstrapping
Questions to potential bootstrappers:
1.What is your definition? Does it include angel money
or government grants? Either way, you must be
disciplined with finances.
2.What is your tolerance for cash flow crunches? Can
you rely on new loans or lines of credit?
3. What is the opportunity in your sector? What is the
sales cycle and revenue? Will your product be
disruptive and will investors wait through the ups and
downs?
4.How important is control of your company?
Fundraising is time-consuming, but investors want
return on their investment,

4. Crowdfunding
Builds off the crowdsourcing
approach to funding. Collective
effort to raise money through
networks without financers or
direct investors (i.e. Kickstarter,
Indiegogo, Kiva)
3 Models
•Donations, Philanthropy &
Sponsorship
•Lending
•Investment

5. Crowdfunding
Pros
•Access to funding (for ideas which may
not have fit the requirements of
traditional investors)
•Ability to "produce an accurate
aggregate prediction" about market
outcomes (Wisdom of Crowds)
•Increase in available venture capital
•Inexpensive
•Platform serves as marketing tool
Con
•Requires you to disclose idea for which
funding at early stage
•Often a limited amount of funding you
can raise

6. Hackathons
Also known as: Hack Day, Hackfest, Codefest
•Gathering of computer programmers, designers, and
tech-savvy concerned citizens
•One idea or goal set, teams based on interest or skills,
contest like elements
•Software, mobile apps, web, video games
Five reasons a start-up should have a hackathon:
1. You get things done
2. You have a deadline that won’t be met otherwise
3. They promote team-building
4. You see who’s really “in it”
5. They’re fun

7. Hackathons
Examples:
“Random Hacks of Kindness” a Hackathon devoted to
disaster management & crisis response
Facebook internal hackathon produced the
“like” feature
hackNY (http://hackny.org/a/) - started by NYU and
Columbia to bring tech students together
Websites/Apps from Hackathons:
Govpulse, areyousafe, thisweknow, seeclickfix,
fixmystreet, crisiscommons, geocommons,
frontlinesms, tilemill

8. Competitions
Typical requirements
•Why does your concept answer prompt or topic?
•Proposal or Essay
•Impact
•Scope & Scale
•Success Indicators
•Budget & Resources
•Team Bios
Pros
•Exposure
•Large amounts of funding available
•Encourages timeline of deliverables
Cons
•Different requirements for each competition
•Adjust proposal for each competition
•Large time commitment & risk of no funding