Crowdfunding alice casey

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Crowdfunding Established behaviour or flash in the pan…? Alice.Casey@nesta .org.uk

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Transcript of Crowdfunding alice casey

Page 1: Crowdfunding   alice casey

CrowdfundingEstablished behaviour or

flash in the pan…?

[email protected]

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Did you know the Statue of Liberty and the plinth it stands upon were “crowd-funded” by the citizens of USA and France?

Many local community projects have been funded by communities (acting off-line) Church-spires, incubators, religious buildings…

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Gosforth Memorial Health CentreThe people of Gosforth, Newcastle funded their health centre through public subscription in 1925. It was built by public subscription, which means that it was paid for entirely by the people of Gosforth.

“The building cost approximately £4500 when it was built in 1925, which in today’s money is about £600,000. This gives an idea of just how huge an undertaking this was and it’s something the people of Gosforth should be really proud of.” Cllr John Shipley

This bit

is original!

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In 2011 453 platforms raisedin project and business financingSource: Crowdsourcing.org

Annual growth in the number of crowdfunding platforms worldwide

€1.5 billion

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Types of crowdfunding…

Equity Crowdfunding Investment

Financial return on investment in time if the business does well. Rewards also offered Sometimes, plusIntangible benefits.

Combination of intrinsic, social and financial motivation.

RevenueSharing Loan/ Investment

Repayment of percentage of profit

Combination of intrinsic motivation, social and financial motivation

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Rewards-based crowd funding :The basics

• A set target amount for a specific outcome

• “All or nothing” within a specified time limit

• Benefits in return – engaging benefits, goods or products, events, tributes, etc.

• In some cases, ability to raise loans or equity

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Flash in the pan or Here to stay?• Helps people do what they’ve always done –

faster, cheaper… differently?

• Digital tech uptake + spread

• Less of the old sources of finance available

• Innovative ideas need backers with belief

• Lots of ‘market’ space remains

• Long term upsurge in grass roots action• Direct relationship between funder and

funded is fresh

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Using a crowdfunding platform.. Step by step.

Apply

Pitch goes live

Funding ends

Post funding

• Publicising fundraising (often a film/video)• Tapping into networks beyond known people• Interactions on website with backers

• Projects submit funding plans/targets and rewards

• Some vetting of projects takes place

• If target not reached, funds are returned to backers

• If target is reached, funds are awarded

• Thank you and interaction on site• Awards/rewards begin to take place – some

are social• Promotion to networks of backers

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Innovation In Giving…Nesta and Cabinet office back 3 crowdfunding platforms

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Features of the site include:

• Offering something in return

• Multiple levels and types of participation

• Embedded video & social media sharing

• Gift certificates to share with friends and family

• A clear outcome for what the funds will be used for with milestones along the way

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Example platforms

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Staged rewards – how do they work?Amount Rewards No.

£20 Custom t-shirt, badge, thank you letter 69

£50 As above, plus handcrafted bag and postcards 28

£150 As above plus handmade mini bike frame 10

£300 As above plus choice of 1 day course or full size handmade bike frame

15

£500 As above plus 4 day bike making course 56

£2000 As above plus a bike and photo yearbook 0

Non financial

Need : Accountant and Electrician ?

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Some possible risks

•What if good, effective projects can’t tell their story well?

• If supporters come from existing networks, how will those in poorer areas manage?

•Wilful misuse (no case known>yet)• Is it replacing or expanding giving?

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Some possible benefits

• More than money : time, assets?

• Crowds of support – network effect

• Innovative ideas backed

• New types of audience reached

• Match funds

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Some impressive over-achievers from the USA…! What happens with the excess?

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Questions?

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Some events coming up• London Funders : 15th October• NCVO sustainable funding : 29th November

[email protected] : @cased

With thanks to…Theresa Burton, CEO Buzzbnk; Nick Underhill, Keo Digital & Peoplefund; Liam Collins, Nesta; creative commons image of statue of liberty: wwarby.