1. Anne Strachan CrowdfundUK
@CrowdfundUK
CrowdfundUK.org
anne@Crowdfunduk.org

2. Agenda
Introduction to crowdfunding
• the three models
• the process
The crowd
What investors, lenders or donors are
looking for
Key tips for crowdfunding
Q&A

3. Why crowdfunding

4. Statistics
Globally
2012 £1.8 billion
2013 Set for £3.5 billion
Kickstarter
£22 million pledged for UK projects in one year
£17.1m for successful projects
Crowdcube
2013 £12.2m invested - 54 businesses, 10 second round
Over 43,000 members
Raised £1.5 million for its own growth 2013
(partner Crowdfunder raised £648,890)

5. Crowdfunding models
Equity = crowd-investing
Works best for larger investment in the whole business model.
Must be able to offer share capital (also Community Shares)
Loans/debt = crowd-lending
Works best for business or enterprise that does not wish to give
away equity – but can repay a loan, with interest.
Social lending possible.
Donations or rewards = crowd-funding
Works best for a well connected enterprise/entrepreneur
with a clearly defined product and deadline.
All-or-nothing or all you raise you can keep

7. Equity
Loans
Donations

10. Plan project
Choose
Platform
The Pitch
video
written pitch
rewards
Campaign
time!
Target
reached or
not
How crowdfunding works

11. The Pebble
$10.26 million (donations)
£40,000 (donations)
Baker’s Toolkit
£175,000
Draw Like a Boss
£51,833 donations
Successful campaigns
£310,800 (equity)
Bonk of Pants
£56,865 (debt)

12. Failed projects
40-50% succeed (20% equity)
Sending dynaspheres to
Europe
World’s first Apple
Museum
Open Source Death Star
11% receive
no pledges at all

13. Why crowdfunding
It gives access to capital
But - its not just about the money
 loyal customers (evangelists)
 pre-sales
 marketing and PR
 different inputs and ideas
 Incubation - proof of concept
 can be easier than obtaining grants or loans
 free – if it fails
And what it isn’t ….

14. Why do people donate or invest?
• Personal contact - family and friends, wider
personal/organisational networks (they like you or
believe in what you are doing)
• Closeness values, professional or geographical
(what’s in it for them)
• Support creators or causes (community of interest)
• Seek rewards (they want the product)
AND for equity and loans
A financial return on their investment

15. Incentives
Tax breaks
• Enterprise Investment scheme (EIS)
• Seed Enterprise Investment Scheme (SEIS)
Managed Funds – first is from Crowdcube
Shares – dividends or sale (direct or nominee)
Rate of return on a loan (P2P ISAs coming)
Rewards – gadget, tech or game

16. Crowdfunding – equity
Strength of the business case
Tax relief
Quality of the pitch
Experience of the team
CEO personal investment in the business

17. Crowdfunding – loans
Ability to repay debt in medium term
• Strength of the business
• Director’s track record

18. Crowdfunding – donations/rewards
Strength of the idea
Quality of the pitch
Credibility of the project owner
Value of the rewards
AND MOST IMPORTANT
Social capital - wide engaged social
networks

19. Near Desk
The oyster card for desks: rent office space by the
Hour at various locations around the UK
£134,500 for 7.71% equity
139 investors – investments from £10-£51,000
25% of investors had invested in crowdfunding
campaigns before
EIS eligible

20. Something Indie
Campaign on Seedrs
£20,000 raised for 10% equity
Handpicked online selection of
indie brands
67 investors
Clear concise business plan and
(understandable) business model
Well-defined target market
Track record

21. Some key tips
Communicate your business
Reasonable value for the business
Have a great idea
Have an unfair advantage
Offer incentives
Network like crazy

22. • Register for free
• Post projects
• Search for platforms or projects
• News and information

23. Thoughts or questions?