Crowdfunding involves soliciting financial contributions from a large number of individuals for a business venture or project. It began in 2006 and has grown due to factors like the JOBS Act of 2012 and the role of technology and social media. There are different models of crowdfunding including donation-based, rewards-based, lending-based, and equity-based. An entrepreneur seeking crowdfunding must understand key aspects like developing a crowdfunding campaign and disclosure document that outlines the business plan, financial details, intended use of funds, and projections. Crowdfunding has grown globally and various industries have been successfully funded, though success requires significant effort and there are some financial risks.

2. Crowdfunding

4. A Statistical View on Crowdfunding

5. Crowdfunding is the use of small
amounts of capital from a large
number of individuals to finance a
new business venture.

7. Definition
 Crowdfunding was created
by entrepreneur Michael
Sullivan in 2006.
 Crowdfunding involves
a more specific request:
The crowd is solicited
for financial
contributions to a
particular venture or
cause.
 Such as a film project or
cancer research.

8. Major driving forces behind Crowdfunding
1. This is a tool for capital
formation via web 2.0
2. JOBS Act 2012 has been
working as a major driving forces
to initiate crowdfunding more
than before
3. Crowdfunding Campaign
4. Crowdfunding Models
5. The role of technology to grab
the marketplace

9. There are 3 most important criteria an entrepreneur needs
to understand for increasing crowdfunding marketplace:
A) Crowdfunding Campaign: Is an open call in which the recipients is any number of
the crowd that decides to support the business plan.
B) Crowdfunding Owners: The person or company who is in the charge of the
campaign.
C) Crowdfunding Platform: Supports the campaign owner’s personal means of
communication and outreach.

10. Future of Crowdfunding

11. The Crowdfunding World Map
 Campaign owners reaches out for support
into initial channel.
 High market growth among the countries.
 Acceleration the awareness in globally.

12. Crowdfunding World Map : Global
Crowdfunding Volumes

13. Crowdfunding World Map : Global
Crowdfunding Volumes

14. The Market Outlook
Anticipated healthy growth rate of crowdfunding;
Rising more capital through the social media
Platforms offering reward-based crowdfunding,
CFPs will advance their crowdfunding models
It continues increasing number of business and
individual

15. Crowdfunding cons in outlook
Your idea will be out directly in front of the public
It may drum up your interest in your project
Success requires investing tireless effort

16. Crowdfunding Models
Crowdfunding Platforms (CFPs) focus on four main models:
Equity based
crowdfunding
Lending
based
crowdfunding
Financial
Donation
based
crowdfunding
Rewards
based
crowdfunding
Non-
financial

17. CFPs Activity across the 10 Most Active
Categories
10 most popular categories are presented in the bar chart where 0%
resembles no activity within the sample and 100% resembles high
activity across the entire sample for a particular category.
Source: Crowdfunding Industry Report 2013.

18. Financial versus Nonfinancial Return
Crowdfunding
 Financial crowdfunding involves an expectation for the
crowdfunder to make a financial return on investment.
 Lending-based or equity-based crowdfunding are
examples of financial crowdfunding.
 Non-financial crowdfunding is that, there is no direct
possibility for the crowdfunder to make a financial return
on the investment.
 Reward and donation crowdfunding are examples of
non-financial crowdfunding.

19. Donation-Based Crowdfunding
Donation crowdfunding is one of the non-financial models.
Crowdfunders typically have intrinsic motivation to donate, and
returns will be intangible benefits from backing the project.
Source: Crowdfunding Industry Report 2013.

20. Rewards-Based Crowdfunding
Reward crowdfunding offers crowdfunders non-financial benefits in
exchange for their pledge. The most common reward crowdfunding
model is a pre-purchasing platform.
Source: Crowdfunding Industry Report 2013.

21. Lending-Based Crowdfunding
Lending-based crowdfunding is a financing model where crowdfunders
lend money via CFPs either directly or indirectly to potential borrowers.
Source: Crowdfunding Industry Report 2013.

22. Equity-Based Crowdfunding
Equity crowdfunding is the act of offering securities to the general
public by privately owned businesses, usually through the Internet.
Source: Crowdfunding Industry Report 2013.

24. Crowdfunding Campaign

25. Writing a Business Plan Disclosure Document
Basic information
Description of the business
Description of your financial condition
Use of proceeds of the offering
Valuing Your Company: Pricing securities and
understanding capital structure
Reviewed versus audited financial statements
Budgeting, projections and forecasting

26. Basic information
Company’s name
Legal status,
Physical address
Web site address
Names of the
directors and officers

27. Description of the business
Summary
Market analysis
Marketing and sales
Detailed product or service
Description

28. Description of your financial condition
If you are raising $100,000 or less, delivering recent
income tax return and financial statements, certified
by the CEO.
If you are raising between $100,000 and $500,000,
the financial statements have to be reviewed by an
independent public accountant.
If you are raising between $500,000 and $1 million,
financial statements have to be audited by an
independent accounting firm.

29. Use of proceeds of the offering
State purpose and intended use of the
proceeds
Target offering amount
Deadline to reach the target offering
amount
Regular updates regarding the progress of
the issuer

30. Valuing Your Company: Pricing securities and understanding
capital structure
Projected future performance to figure it
out.
Where you think the company will be, say,
in three years $500000
Equity, donation, reward

31. Budgeting, projections and forecasting
Cost allocation and disbursement
Assumption
Multiple projection