Funding Your Project Through Crowdfunding. What is Crowdfunding?

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Transcript of Funding Your Project Through Crowdfunding. What is Crowdfunding?

Crowdfunding

Funding Your Project Through Crowdfunding

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2What is Crowdfunding?Crowdfunding has been around since the mid-2000s; it gained more traction with successful publicised campaigns launched on US-based Indiegogo and Kickstarter platforms and Australian-based Pozible and iPledg. Today there are over 1000 crowdfunding platforms and the industry is set to raise $34.4 billion in 2015.Basically, crowdfunding is attracting money from people that you know and dont know. Usually the initial funders (or backers) are friends and family, and then friends of friends and family. After you have exhausted that list, the rest of the funds come from people you dont know, commonly known as the crowd. 3

Types of CrowdfundingEquity Based Crowdfunding

Property / Real Estate Crowdfunding

Donation Based Crowdfunding

Lending Based Crowdfunding

Reward Based CrowdfundingThere are five types of crowdfunding platforms.

Equity Based Crowdfunding:Investors receive a stake in the company. (If Pebble goes big, you get a percentage of the prize).Property / Real Estate Crowdfunding: Property crowdfunding raises funds from a "crowd" of investors for a project or investment. The crowd meets online and investors "pledge" their capital to projects. Investors can nominate projects or platforms can make suggestions. Donation Based Crowdfunding: Contributions go towards a charitable cause. (You paid for 50 children in Africa to receive watches).Lending Based Crowdfunding:Investors are repaid for their investment over a period of time. (You invest in the company, and get your money paid back over time).Reward Based Crowdfunding:Investors receive a tangible item or service in return for their funds. (You invest in Pebble, and get a first edition watch.)

5Stats, Stats, and More StatsIt takes 2.84 weeks to raise the first 25% of the funding goal and 3.18 weeks for the last 25%Campaigns that have 4 or more external links raise 103% more in fundsMost commonly pledged amount is $50Most common time for making a pledge is 11 amIt takes 2.84 weeks to raise the first 25% of the funding goal and 3.18 weeks for the last 25%Campaigns that have 4 or more external links raise 103% more in fundsMost commonly pledged amount is $50Most common time for making a pledge is 11 am6Success Rate Stats 50% (or lower) of all projects listed are successfully fundedOnce a campaign raises over 20% of the initial funding goal, the project has an80% chance of successfully reaching its total funding goalonce a campaign hits 30% of its funding goal the success rate climbs to 90% (compared to only 50% after a campaign reaches the 5% mark). The faster the momentum is gained the bettercampaigns that reach the 30% mark within the first week havea higher rate of success.Campaigns that hit 30% of their target get fully funded 90% of the time50% (or lower) of all projects listed are successfully fundedOnce a campaign raises over 20% of the initial funding goal, the project has an80% chance of successfully reaching its total funding goalonce a campaign hits 30% of its funding goal the success rate climbs to 90% (compared to only 50% after a campaign reaches the 5% mark). The faster the momentum is gained the bettercampaigns that reach the 30% mark within the first week havea higher rate of success.Campaigns that hit 30% of their target get fully funded 90% of the time

7Crowdfunding is storytelling with a goal.

Crowdfunding is storytelling with a goal. In one of the seminars, someone said it was busking online- and in a way it is. I am hoping that someone reads or listens to my story, likes it, and tosses money into the hat in this case pledges online.

http://helloswell.com/whitepaper/how-to-tell-your-crowdfunding-story/#8

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Everyone loves a good story. New York Times best sellers and award-winning movies are usually due to having a good story as their foundation; the same goes for successful crowdfunding campaigns. Why is this project that you are launching important? Why are YOU the one they should give to? What is so special about you and your story, project, idea or cause that would motivate a stranger to give you money?10What Size Projects Can be Funded?

There is no project too small or too large to crowdfund. The challenge is being able to attract the right people to your campaign and give you money so that it gets funded. There have been many campaigns that have targeted to raise a small amount and by the end of their campaign had raised millions of dollars. A recent example of this was FlowHive who initially aimed to raise $70,000; the 45-day campaign finished with approximately USD$12.5 million. 11Amount of funding pledged for projects on Kickstarter.com as of June 2015, by project category (in million U.S. dollars)

Any type of project can be funded as well. The most popular projects are games which makes sense since the whole gaming industry is exploding having a worth of $XX. Other popular projects are in technology, design, film & video, and music; anything can be crowdfunded it is up to your imagination.12Why People Pledge ...They like you

Theyre passionate about the cause or like your story

They are after the cool rewards

They are spurred on by social kudos

Why do people pledge? Why would anyone want to give you money for a project? The first one is pretty obvious - they like you. It is pretty easy to give or lend money to someone who have known for a while which is why your initial 30% of your funds will probably come from friends and family (and their friends and family). The trust is already established.

Three other reasons as to why people will support your campaign is (1) they are passionate about the cause or like your story, (2) they are after the cool rewards, and (3) they are spurred on by the social kudos of being associated with your campaign.

13Commercial World ApplicationsNOT for general running costs (Must be project-based)SuggestionsStart-upsImplementation of new initiativesLeverage for grantsLodgement of IPPrototypingProof of concept trialsExternal skills and knowledgeTools and equipmentApp Development and GamesMarketing collateral (e.g., website) and initiatives (e.g., product launch)

Commercial World Applications:NOT for general running costs (Must be project-based)SuggestionsStart-upsImplementation of new initiativesLeverage for grantsLodgement of IPPrototypingProof of concept trialsExternal skills and knowledgeTools and equipmentApp Development and GamesMarketing collateral (e.g., website) and initiatives (e.g., product launch)14Creative / Artistic ApplicationsPublishing RecordingFilm makingExternal services (e.g., editing, etc.)DocumentariesPhotographyDanceDrama and performing artsLaunch, exhibition and marketing

Creative / Artistic ApplicationsPublishing RecordingFilm makingExternal services (e.g., editing, etc.)DocumentariesPhotographyDanceDrama and performing artsLaunch, exhibition and marketing15

CharitiesLeverage off limited resourcesA point of difference stand outLeverage for grants and CSRNewsworthinessNever forget the passion Be mindful of all or nothing

CharitiesLeverage off limited resourcesA point of difference stand outLeverage for grants and CSRNewsworthinessNever forget the passion Be mindful of all or nothing

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Community GroupsRotary, etc. paying it forwardLocal sporting clubsEquipmentEventsTours and travelPromotion and exposureLocal action groupsSchools

Community GroupsRotary, etc. paying it forwardLocal sporting clubsEquipmentEventsTours and travelPromotion and exposureLocal action groupsSchools19

Successfully funded on iPledg.comPlanning Your ProjectBuild your CrowdProject NameTag LineProject DescriptionLink to your YouTube VideoLogoPhoto GalleryFunding TargetFunding TimeframeRewardsThere are a number of key steps when creating your crowdfunding campaign.Build your CrowdProject NameTag LineProject DescriptionLink to your YouTube VideoLogoPhoto GalleryFunding TargetFunding TimeframeRewards

21Breaking down bigger projectsSize of campaign is relevant to your networks

Bite sizes pieces are more likely to get up

Success breeds success!When you have larger projects to fund, consider the followingSize of campaign is relevant to your networksBite sizes pieces are more likely to get upSuccess breeds success!

22Things in Common of Successful ProjectsAn existing audienceA solid idea and sellable vision for the product or serviceCareful pre-planning and preparation, including budgetA strong presentation, ideally coupled with high production videosAn appealing reward structure to the projects audienceOngoing outreach to backersEffective social media, marketing and PR strategiesThere are certain things in common you will find with successful projects.An existing audienceA solid idea and sellable vision for the product or serviceCareful pre-planning and preparation, including budgetA strong presentation, ideally coupled with high production videosAn appealing reward structure to the projects audienceOngoing outreach to backersEffective social media, marketing and PR strategies

23How it Works ...

Getting the Best Results

Having a video in your campaign more than doubles your chances of reaching your funding target.

All you need is a simple 1 3 minute video

Engage the viewer in the first 40 seconds, and youll get the message across

25Heres a Dramatic Question for You Why should we care?Once you determined why your audience will care, determine how to make them care which brings us too26Create Emotional Content Appeal to Human Emotions

http://helloswell.com/whitepaper/how-to-tell-your-crowdfunding-story/#

Appeal to human emotion.Breaking down the impact of a project