Investing in the Crowd

Investing in the crowd
How can not-for-profits and civil society organisations take advantage of
the rise in crowd funding?
Matthew Tukaki, CEO and Chief Social Investor of the Sustain Group

Twitter: @tukakimatt

www.sustaingroup.net I www.sdgp2015.com I info@sustaingroup.net

What’s my return on investment for being
here listening to this?


Revenue lines are already under pressure because of pressure on Government
funding – the age of austerity



Increase in competition across the civil society and not-for-profit sectors
when it comes to the “available” “pot”



Confusion from the consumer end about who to support – who to invest in



The rise of tier 3 and 4 not-for-profits



No likely consolidation in the number of organisations “springing” up who
ultimately seek Government funding within the first 12-18 months of
operation



Traditional methods work – but as we move more into the online world we
need to take advantage of the very social media platforms we ourselves
populate with messages


“I need to diversify my revenue
base if I am going to fund the
projects we need investment
for”


About me
I am the CEO and Chief Social Investor of Sustain Group: I am considered to be a

global expert when it comes to sustainable development. He has been active in the
field for many years and has also led project teams dealing specifically with the
evaluation and assessment of social impact across a number of developing countries.
From 2010 until 2013 I was Australia’s Representative to the United Nations Global

Compact and in May of 2013 the Secretary General appointed him to the Global Board
of the UNGC. I have been responsible for leading the reform agendas of a number of not
for profit organisation with a view to building organisational capability, capacity and
resilience. That includes seeking new and creative ways to fund projects, diverse

income away from traditional sources and seeking out new “investors” to help us
deliver to various work programs. I am a businessman who through entrepreneurship
and a sense of innovation is out to make a social difference with firm realisation that in
order to do it we need the money and partnerships to pay for it.


A quick check of the facts around
crowd funding
No point in diving into something unless you know the value of the deep
dive!


Well – the facts will amaze you…


The global crowd funding market grew 80% to a total of $2.67 billion of funds raised.



Reward based platforms accounted for $1.4 billion or 52% of total funds raised.



The US crowd funding market was $1.6 billion (60%), Europe was $945 million (35%)
while the rest of the world accounted for $125 million (5%).



The number of crowd funding platforms (CFP’s) worldwide grew 17% from 452 to around
530. This growth is slowing as the market matures and will start going negative once
the industry enters a consolidation phase. Once the industry leaders are established
M&A activity starts to increase.



Indiegogo is the No.2 CFP with 0.8% of the total crowd fund market (or 1.3% of rewards
based market).



30% of crowd funding platforms are generalized or broadly focused in terms of the
types of projects hosted.



70% of crowd funding platforms are specialized or tightly focused on specific industries
or niche projects.


Still quite amazed….


Kickstarter received over $319 million of pledges from over 2 million backers for over
40,000 projects.



Over 18,000 Kickstarter projects were successfully funded (44%) raising over $270
million in capital



Only 8% of projects with targets of $100,000 or more were successful (large projects
are very hard)



Pebble Inc who make a wearable computing product raised a new Kickstarter record of
over $10,000,000



Only 17 projects raised $1+ million – that is 0.04% of all projects and 0.09% of all
successful projects (most of these were either in Games, Technology or Design)



Games is the most successful Kickstarter category with $83 million in pledges
(Technology is 2nd)



Music is the most popular category with over 5000 projects (Art, Publishing, Film all
had over 1000 projects)



- See more at: http://sasminstitute.com/crowdfunding-facts/#sthash.rUnxc44N.dpuf


Now … if I asked you for money?
Its one thing to jump into the crowd … but, why would people believe me
and want to invest?


If I asked you for money would you give it to
me?


Very rarely will someone part with their hard earned income unless they have
to. People part with money based on:


The additional generation of wealth



The fact they have to because the court “said so”



Emotional attachment – to an issue or a challenge facing a family member or friend



Inherent religious belief



So – if I told you that my dog needed an operation would you help me pay for
it?



If I told you my sick child needed an operation would you help me pay for it?



If I told you I wanted to go out on Friday night and needed to fund said
adventure would you help me out (oh, can I have cab fare as well?)


Things I know!


People are willing to invest if there is an attachment to your story



If there is proof in your existence – and therefore credibility



If there is an obvious endgame and that will produce something for a benefit
-a social benefit primarily



Many people don’t have hundreds of dollars – those willing to invest more
than $100 per project will be rare – therefore the majority will be likely
under $100


Stepping through on activating your
campaign
Lets look at some of the key considerations


Step one: develop the product or
initiative you want to have
funded – treat the process as if
you were developing a business
plan or business case for
something completely new…

Step two: “always
underestimate what you need
instead of overestimating –
remember, a lot of money raised
through Crowd Funding will only
cover a period in time – remain
vigilant around diversification.”

Step three: “understand the
demographic and target market
you want to raise the most from
e.g. test the case of why they
would invest?”

Step four: “what current
networks and assets do you have
access to in order to promote
this? Do you have a current
social media strategy in place
and if so is there a formula for
how to monetise it?”

The basics
Its not rocket science


“you need to ensure there is a
market of willing people
wanting to invest, you cannot
assume the market is there”


“You can’t just throw something
onto a crowd funding site and
hope they will come to you – you
need to have a strategic
engagement plan ready to go”

“That plan must include those
you have never interacted with
before, but are indirectly
connected to you through social
and professional media”

“Always make sure that the
outcomes are clear and the
timelines involved – there has to
be confidence that through my
social investment the project
will be successful”

Monetising social media


Using Facebook “likes” and “followers” to share your pasts – thereby creating
an additional and indirect market for your crowd funding project



Using Linkedin in the same way – but more targeted to postings in groups



Using Twitter: make sure you have a #tag ready to go – own that #tag! E.g.
getting people to invest into a water project in africa #waterforafrica – own
the tag, get to a point of trending and use the twitterverse as a way of retweeting thereby creating another market or sector



Make sure the campaign is sustained and not just once off


Imagery


Always use imagery that will support your cause as well as stories and
narratives that enable your intended investor audience to buy into it – make
sure it is credible -always use real images and not those sourced from stock
or through a random Google search



A picture will always beat a thousand words



Lets look at
the use of
imagery and
why two
campaigns
that appear
the same end
up raising
different
amounts of
money

Incentivise your investors


Don’t over complicate recognition of an investors contribution – KISS – keep it
simple sam



It could be an honour roll on your website showing recognition



It could be a certificate of thanks – I am a big advocate of provider a social
shareholder certificate in the same way you provide a share certificate when
investing into a company



Incentivise your investors to the point that the cost is minimal allowing
maximum investment into the project outcome itself


But wait there is more! In order
to go through the full workshop
get in touch with
education@sustaingroup.net and
arrange our Chief Social Investor
to call on your organisation!

Get in touch …


Matthew.tukaki@sustaingroup.net or log onto www.sustaingroup.net


Investing in the Crowd

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