REMIX Day 2- Crowd Funding-Virginia Buckley, Co-Founder, Culture Crowd

1. Penny Nagle & Ginny Buckley

2. CultureCrowd is…
• A consultancy that works with producers to create successful Equity
Crowdfunding campaigns
• Penny Nagle, Ginny Buckley & Conor Roche - active in London & Hong
Kong
• Free to download AHRC/Clore funded Research Paper published
August 2013 www.culturecrowd.co.uk

3. Reward Crowdfunding
vs Equity
Crowdfunding (ECF)
Reward
How
old?
4
years
£
Donate
from
£1
Receive?
Perk
Producer
Ownership?
100%
ECF
1
year
Invest
from
£10
ROI
+
Perk
=
Hybrid
Reduces
Suitability
Small
scale,
not
for
profit,
amateur
Large
scale,
professional
Pla>orm
fees
5%
of
Value
Investment
Main
Pla>orms
Kickstarter,
Peoplefund.it,
Indiegogo
Seedrs,
Crowdcube
Cultural
Projects
Yes
lots
Av
5-­‐7.5%
of
Value
Investment
4-­‐5
total
–
no
complete
cycles
yet

4. CultureCrowd loves
ECF because…
• There’s nothing new under the sun…Marillion, David Bowie, Age of
Stupid
• But online ECF radically changes the model - invest from as little as £10
• UK has an advantage – World’s 1st FCA regulated equity crowdfunding
arena
• Connects audience and investors
• Tech platforms more transparent, accountable & efficient

5. But…
• Investment Readiness + Maintaining Control
• Unsuitable for amateur entrepreneur
• Experienced Arts Investors Required?
• Cost of compliance and danger of litigation

6. How much does it
cost to crowdfund?
• Producers success fees
•
•
•
•
•
•
•
Financial transaction fees
Cost of making & delivering donor ‘rewards’
Management fees to 3rd parties, PRs
Tax liabilities
ECF legal fees
ECF Due Diligence
ECF Intermediary services

7. Case Study : Reward CF
Veronica Mars 2013
•
•
•
•
•
•
US based Kickstarter campaign, i.e Reward only
13 Mar – 12 April 2013
Pitched for US$2M, raised 2.5M in first 48 hours of campaign
Eventually raised $5,702,153 from 91,585 backers
To date there are 20, 682 comments on the Kickstarter campaign page
Quickly followed by pitches from Zach Braff & Spike Lee and
accompanied by a backlash

8. ECF Case Study
Happy Days 2013
Commercial UK Theatre tour Oct 13
Raising investment £250K on ECF platform Seedrs (UK)
Invest for as little as £10 on industry standard terms
Challenges of sector specific investment on non-specialist platform
with atypical investors
• The online dragons den
•
•
•
•

9. ECF Case Study
Wind in the Willows
• October 2013 dedicated website www.investinwillows.com
• £650K offered of total £6.5M budget, investment offered at fixed
levels £1K, £2.5K & £5K
• Costs of promotion, legal, due diligence, FCA compliance, website &
design

10. ECF Case Study
Train Fever
• Video Game - Train/Railroad (Management) Simulator (on
Gambitious.com)
• 50% share of total sales revenue offered
• Raised €250.000 from 651 investors from various countries
• Ranging from €20 - €20.000 investments
• Investors are:
• Fans (train-enthusiasts; lively suggestions and feedback discussions
(still) going on on the platform)
• Investors who see the quality and enthusiasm of the crowd
• 2nd tier network of development team
• Gambitious’ publishing branch is also publishing the title (exp. release
May 2014)

11. Characteristics of successful
campaigns
Monetise an existing following - a great brand, social media profile or
•
other compelling story
• Combine on and offline investors – match fund
• Be all over your campaign all the time, Equity investors are as
motivated by the performance of the entrepreneur/ producer as they
are by the product
• Post campaign strategy to manage investors afterwards

12. Could ECF be part of the solution?
“There will always be a large number of micro-businesses in the sector.
From a purely creative point of view, small is both beautiful and
productive. Creative talent flourishes best in relatively small and highly
flexible units. However creative excellence does not guarantee
commercial success. In a competitive global market small, weak, projectbased business units are vulnerable to the effects of under-capitalisation,
loss of clients, adverse currency fluctuations and the withdrawal of
inward investment.”
Extract from Ingenious Media paper submitted to Hse of Commons Select Committee 2008

13. ECF: What If? Next 5
Years ….
• Niche platforms? Gambitious, investinzombie.com, Arts specific?
• Professional Intermediaries & other CF service businesses
• Social Finance instruments adapted for use by arts/ creative
industries
• Mini-markets - Symbid certificate trading
• Big Data – more analysis & audiences participating directly in culture
they want
• Netflix

14. Thankyou – Feedback
@culturecrowd
penny@culturecrowd.co.uk
virginia@culturecrowd.co.uk