1. www.StratticaCapital.com
Crowdfunding &
The Future of Venture Finance
Mila Kyriacou
CFO, Cofounder
Strattica Capital
25TH July 2014

2. www.StratticaCapital.com
Mila Kyriacou
Graduate: Economics / Engineering
MBA: Finance
A little about me…
Vice President
trattica Capital
CFO & Cofounder
Previously:

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Capital Sources
Friends, Fools,
Family
The Banker
The CrowdAngels
& VC

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Crowdfunding Worldwide
Source: 2013CF The Crowdfunding Industry Report. Massolution
Global crowdfunding volumes

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Crowdfunding Worldwide
trattica Capital
? mila@stratticacapital.com

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The 4 Types of Crowdfunding
Type Funders receive…
Financial
return
Donation -
No
Reward
Tangible rewards
Special experiences
Lending
Repayment of a principal
with/without interest
Yes
Equity
Company ownership
Capital gain

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The 4 Types of Crowdfunding
Source: 2013CF The Crowdfunding Industry Report. Massolution.
Growth in funding volume by crowdfunding model

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Crowdfunding Types
Source: 2013CF The Crowdfunding Industry Report. Massolution.
Donation-based crowdfunding activity.
Donation | Reward | Lending | Equity

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Crowdfunding Types
• 1884
• $100 000
• 120 000 people
Donation | Reward | Lending | Equity

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Crowdfunding Types
• 2008
• $750 000 000
• 3 000 000 people
Donation | Reward | Lending | Equity

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Crowdfunding Types
• Consumer facing products
• Validation of product-market fit
• Pre-sale of a product
• Shorter path from a prototype to marketplace
Donation | Reward | Lending | Equity

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Crowdfunding Types Donation | Reward | Lending | Equity

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Crowdfunding Types Donation | Reward | Lending | Equity
• Include a video in your pitch
• Have money already committed before you go to the crowd
• Be active online
• Make sure the price is right
• Select a right crowdfunding platform
Successful Crowdfunding

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Crowdfunding Types
• Personal loans
• Business loans
• Asset backed loans
Do not finance a start up using debt!
Donation | Reward | Lending | Equity

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VC vs. Equity Crowdfunding
Comparison of Traditional VC Model to
Equity Crowdfunding Model

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Crowdfunding Types
Positioning of Equity Crowdfunding
among other Forms of Capital Formation in Companies’ Lifecycles
Donation | Reward | Lending | Equity

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Geographic Limitations
Source: 2013CF The Crowdfunding Industry Report. Massolution

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Reward vs. Equity
Criteria Reward-based Equity based
Backer Ownership None owns % of co.
Backer Involvement Limited
May be advisors/
employees
Amount No limits Legal limits
Ave $raised Smaller Larger
Frequency No limits Limited # raisings/yr
Reputation Higher risk Lower risk
Financial Disclosure No need to disclose
Publicize:
• financials
• business model
Product/Service Consumer Various
Tax $raised Tax Payable None
Regulations Light Heavy
Geography Most countries Few countries

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Success Rates
Source: 2013CF The Crowdfunding Industry Report. Massolution.
Funding probabilities for crowdfunding campaigns by model.

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Median campaign sizes
Source: 2013CF The Crowdfunding Industry Report. Massolution.
Median campaign sizes in USD across crowdfunding models.

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Benefits
• Reputation boost
• Customer validation
• Audience engagement / Feedback
• Possible bridge to other types of financing

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Risks & Barriers
• Reputation risk
• IP protection
• Donor exhaustion
• Financial disclosure

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Questions!
Crowdfunding &
The Future of Venture Financing
? mila@stratticacapital.com