Crowdfunding workshop Montreal - Basic level

WELCOME TO THE

BASIC LEVEL

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In partnership with

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NCFA

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SeedingFactory.com/connect

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PART 1 – THE BIG PICTURE

Crowdfund Workshop – Basic Level

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The rise of Crowdfunding


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• DefiniMon

• Born from the rise of internet technologies (social networks, web payment, video sharing, …)

• Statue of Liberty’s Story

• Part of the crowdsourcing movement

What’s crowdfunding?


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3 Different models

Donation/Reward

Equity Lending


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What is the power of crowdfunding?


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• PlaWorms:• Worldwide = 800• Canada = 50

• Market size• $2.7 billion (2012), +81% y-‐o-‐y• Growth led by DonaMon/Reward and Lending models

• 2013 esMmaMon = $5.1 billion

Fact and Figures


Equity

LendingDonaMon/Reward

Money raised in fonction of crowdfunding model ($ billion)

Sources: Crowdsourcing.org, NCFAcanada.org

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http://www.crowdsourcing.org/

http://www.crowdsourcing.org/

http://www.ncfacanada.org/canadian-crowdfunding-directory/

http://www.ncfacanada.org/canadian-crowdfunding-directory/

Global overview


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• Pebble watch• First campaign to raise $10 million (link)

• Jobs Act in the US• Signed by Obama in April 2012.

• Equity Crowdfunding in Canada• Ontario (OSC), Québec (AMF) & New Brunswick

• In Canada• Indiegogo expanded their business to Canada• Crowdfunded Montreal film project get Oscar nominated

Remarkable events in 2012


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http://www.kickstarter.com/projects/597507018/pebble-e-paper-watch-for-iphone-and-android

http://www.kickstarter.com/projects/597507018/pebble-e-paper-watch-for-iphone-and-android

Who should consider Crowdfunding and when?


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Crowdfunding acMvity


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Most funded project by category

Spiegel Sohmer Internal MeeMng

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• Individuals• Inventors, Designers, ArMsts• Peer to peer lending is booming

• AssociaMons• ChariMes already used to raised money from the crowd• Indiegogo partnership with organisaMons

• SMEs• DonaMon/Reward: used as a way to pre-‐sale a product• Equity: new innovaMve access to funding

What type of project owner


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http://www.indiegogo.com/partners

http://www.indiegogo.com/partners

http://www.kickstarter.com/projects/bruceconstantine/the-espro-press?ref=live






• 1. How good is your idea – really? Are you certain that people will be interested in it?

• 2. Can you express your idea simply and at the same Mme get people excited about it? If not, it may be that the idea isn’t all that compelling, or that you may not be the right person to present it.

• 3. Do you have something tangible to show when presenMng your venture – some visual aspect of your project that can help other people visualize it?

• 4. Do you have some great rewards in mind to give backers and fans incenMve to donate?

7 quesMons to ask yourself


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• 5. Do you understand all the personal and professional demands that the process of running a crowdfunding campaign demands from creators? Are you prepared to put 110% effort into making your crowdfunding project a success?

• 6. Are you ready and able to take a big personal risk?

• 7. Who can you turn to for help, whether in terms of assistance with asset creaMon, financial backing, raising awareness or just help spreading the word?

7 quesMons to ask yourself (cont.)


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5 advantages beyond raising money


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• Check if your assumpMons were correct.

• First step to convince further investor later on.

• Assessing the market size and popularity.

Proof of concept


See example

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Example: Espro Press


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• Get early feedbacks.

• Let you adapt the product/service/concept in real Mme.

• Find people willing to work with you and then established valuable connexions.

CollaboraMon


See example

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Example: A year of adventure


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• Every contributor become an evangelist

• Good to build a community around your project.

• You’ll gain highly valuable knowledge about how to market your product/service/project

MarkeMng army


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• Replace a product/project launch

• The sMll innovaMve aspect of crowdfunding will help you get more press coverage

• Social networks help mulMply the outreach

A PR booster


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Notman House


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• ApplicaMon is free.

• If you don’t manage to raised your goal money is returned to each contributor.

• If you fail once it’s easy to try again

• On the contrary it’s Mme consuming

It’s free


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Unforeseen risks

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Time & money loss


• Crowdfunding is a full-‐Mme occupaMon

• 2 weeks preparaMon (min) x 5 weeks crowdfunding (average) = 280 hours. What’s your hourly rate? + video + markeMng costs

• All-‐or-‐nothing risk on kickstarter

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Burnout risk


• Crowdfunding is a roller-‐coaster

• Necessity to have fall-‐back plans

• Reaching out to friends, family, and someMmes personal savings

• Can you afford it?

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LogisMcs risk


• LogisMcs are hard to scale

• If you have 10,000 backers instead of 100 backers, ordering, producing, fulfilling and shipping are hard.

• Missing out on announced schedule

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AccounMng & Legal risk


• Crowdfunding are fun if you are asking for donaMon with no return, and for a small amount.

• If there’s an expectaMon of return = taxes.

• What’s the best structure if you are aiming for $30k?

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Pros & Cons

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Pros


• Needed funding to design, develop, launch a product

• build a community of early adopters

• get market validaMon

• press

• Team morale

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Cons


• Being on a popular plaWorm doesn’t mean you will get contribuMons from the site’s traffic. You need to promote yourself the campaign

• difficult to crowdfund a non-‐tangible product. Need to pre-‐sale the product

• failure > 50% of campaigns

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Cons


• You need to show personal vulnerability

• Preparing and managing a crowdfunding campaign is as difficult as tradiMonal fundraising. It’s not free money!

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It’s a full Ime acIvity

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Pre-‐Campaign


• Website to showcase your product and it’s tangible

• Need an acMve community on twiser and facebook

• A video takes 1 to 2 weeks to produce

• Have several brainstorming sessions to find inspiring perks

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Pre-‐Campaign


• PR: contact journalists to tell them about the campaign

• Community acMvaMon: contact bloggers and organizaMons, plus potenMal partners

• Build buzz for the launch with smart content markeMng

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During the campaign


• ConMnue outreach

• Thank contributors and upsell

• Content markeMng on the website/twiser/facebook

• Respond to emails/skype/meeMng requests

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PART 2 – BE PREPARED


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It’s your turn

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AcMvity : Do a benchmark on Kickstarter & Indiegogo. 1. Type in keywords relaMng to your project. 2. Choose 3 successfully funded campaign on KS & IGG

3. Check Funding Goals, Common & Original Perks, Creators (origin, legiMmity, exisMng networks), Video, Pitch.

Fill in the Seeding Factory Canvas

Benchmark


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Choose your plaKorm

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Kickstarter


• Advantages:• The most famous plaWorm • Huge trafic

• Drawbacks• Only for US ciMzens (need a US partner)• All-‐or-‐nothing model• Exclusively in English

• Fees• 8-‐10%

• Comments• It’s the best opMon if you’re targeMng the US market.• Most populat projects are Video Games and Films

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Indiegogo


• Advantages• Available in Canada (CAD and in French)• Flexible AND All-‐or-‐nothing plans• No selecMon

• Drawbacks• Less popular than Kickstarter

• Fees• 8 to 13%

• Comments• Great for canadian projects, community and social projects.

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Fundrazr


• Advantages• It’s the biggest Canadian plaWorm (based in BC)• Available in lots of different languages

• Drawbacks• Small plaWorm• DonaMon model (not made to offer rewards/perks)

• Fees• 8%

• Comments• Perfect for community and charity projects• Spectacular Facebook integraMon tools

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https://fundrazr.com/pages/facebook-fundraising










• Fundo• La Plebe• Haricot

• Yoyomolo• Tax deducMon system included

• La Ruche Québec• Only for Quebec City ‘project

• Ecloid• Based and backed by Outaouais region

Quebecer plaWorms


3 Montreal Platforms

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https://fundo.ca/fr/

https://fundo.ca/fr/

http://laplebe.ca/

http://laplebe.ca/

http://laplebe.ca/

http://laplebe.ca/

http://haricot.ca/

http://haricot.ca/

http://www.yoyomolo.com/

http://www.yoyomolo.com/

http://laruchequebec.com/

http://laruchequebec.com/

http://ecloid.com/

http://ecloid.com/

• MulMplying Mme

• DiluMng the contribuMon effort

• It’s confusing for potenMal backers

Never run parallel campaigns


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Comparison


PlaKorm Fees Comments

Kickstarter 8%-‐10% Perfect for product pre-‐selling.

Target the US market

Indiegogo 8%-‐13% The « creaMve » compeMtor of Kickstarter.

Global accessibility and presence

FundRazr 8% A leading Canadian plaWorm perfect for charity projects.

Local PlaWorms

5%-‐12% For smaller project (<$5000)

They usually provide a lot of support

Own plaWorm 0 Technically harder.

Good for brands and organisaMons with an exisMng comunity.

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• Selfstarter.us

• Wordpress plugin

• Others

Create your own plaWorm


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Who’s your target?

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• Who’s your project is dedicated to?

• What’s their purchasing power

• Are they comfortable with web technologies (online payment, social network acMvity)

Contributor prototype


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• How many of your friends and familly are willing to back your project?

• Defining what kind of networks could be reached

• Start to pitch your project to some of your relaMves/friends & use those early feedback.

Different level of backers


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• Collect external rewards such as an acknowledgment, a tangible arMfact, or an experience.

• Help others and “give.”

• Be part of a community of like-‐minded people.

• Support causes analogous with their personal beliefs.

Backers moMvaMons


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• Waste money: worry that their money will not be used as effecMvely (NA on all-‐or-‐nothing plaWorms).

• Worry about waiMng for or not receiving rewards.

• Don’t want to be pestered for support. There’s a risk of saturaMon

Backers unmoMvaMons


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Resource screening

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• The outreach person is responsible for “business development”

• Finds, qualifies, and then proposes winning partnerships to exisMng organizaMons and companies

• Mostly email

Outreach person


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• The markeMng person gets thousands of people excited about the campaign

• Ideas: content markeMng, social media, PR, blogger outreach

• O|en the outreach person

MarkeMng person


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• Find a videographer who can put together a good 2mn video

• A video inspires and makes people dream...

• Cinema students, freelancers, friends of friends

• Test ideas with your target customers

Video team


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• CreaMve: writer, graphic designer, illustrator, photography

• Business: accountant, legal

Other


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• Good: get people to be inspired by your project

• Bad: Ask for a lot of work, and send 50 emails a day. They will burn out and you will finish the project alone.

• Best: Inspire. Delegate. Have a calendar and a list of todos to coordinate.

Tips


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Key Opinion Leader Mapping

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• Go through similar campaigns, Google Image search

• Klout, Followerwonk

• Google Doc spreadsheet, Excel

• Rank by infuence and relevancy

Research


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• Read their twiser feed or blog

• Find a hook to asract their asenMon

• If no response, it’s ok. Wait for another hook on twiser to come back

• A|er a first yes, it’s easy to ask for more commitment. Goal: a skype, then coverage

AcMon


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Your social power

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• Wharton Business School professor Ethan Mollick study:

– 10 friends on facebook = 9% success rate

– 100 friends = 20% success rate

– 1000 friends = 40% success rate

Social Mes are important


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• Join the online communiMes of your audience: Facebook, twiser, Pinterest, google+ (Youtube, Instagram...)

• Interact with your audience and get to know what they like and how to communicate

Join in the acMon


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• Be interested in opinion leaders and help them share and promote what they are doing. Be genuinely interested. Show them what you’ve done for them.

• When the campaign launches, ask opinion leaders to help share the campaign. A thank you goes a long way

• If you have Mme: Find or create content that your audience will like.

Join in the acMon


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Crowdfunding workshop Montreal - Basic level

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Transcript of Crowdfunding workshop Montreal - Basic level