Crowdfunding has grown significantly in recent years and provides an alternative source of funding for entrepreneurs known as "first money". There are different models of crowdfunding including rewards-based crowdfunding exemplified by Kickstarter as well as emerging equity crowdfunding. Crafting a successful crowdfunding campaign requires focusing on the passions and motivations of potential donors through compelling visuals, storytelling, and community engagement on social media. Metrics should be used to measure and improve campaign performance over time.

1. CROWDFUNDING
Beyond the Headlines & Hype
CJ Cornell
@cjcornell

2. CJ Cornell is ...

3. #
1
AZ Entrepreneurship

4. top
10
Places to do business …

5. th
46
in the U.S.A.
venture capital, equity investing

6. $28 Billion
that’s with a “B”

7. 3,900
VC deals in 2013

8. 1,900
# seed/early stage deals

10. 1,900
# lottery millionares in US each year

11. VC Deals and $$ 2013
Amount Invested
2013
Stage of Development
Qtr 1
Seed
Qtr 2
Qtr 3
Qtr 4
2013 Total
$208,749,800
$224,891,100
$189,545,100
$319,766,900
$942,952,900
Early Stage
$1,525,082,100
$2,532,942,200
$2,805,559,400
$2,895,229,600
$9,758,813,300
Expansion
$2,059,163,900
$2,195,220,100
$2,587,292,100
$2,996,782,200
$9,838,458,300
Later Stage
$2,207,377,900
$2,120,733,500
$2,339,208,100
$2,157,414,100
$8,824,733,600
Grand Total
$6,000,373,700
$7,073,786,900
$7,921,604,700
$8,369,192,800
$29,364,958,100
Number of Deals
2013
Stage of Development
Qtr 1
Seed
Qtr 2
Qtr 3
Qtr 4
2013 Total
53
46
52
67
218
Early Stage
416
506
551
530
2,003
Expansion
237
231
241
275
984
Later Stage
203
194
188
205
790
Grand Total
909
977
1,032
1,077
3,995

12. Why does a startup need
funding?
** yes, it needs to be asked ….

13. Funding Gap(s)
concept->product->market->profit
IPO (market share,
revenues etc )
Entrepreneurial Growth
$
Venture Capital
$
Angels
concept
(accelerators/incubators)
$
$
Product
(Risk, growth)

14. Starting a company
is easier than ever …
… but growing a company is
harder & riskier than ever …

19. $520k
(the average Angel deal)
** the HALO report

21. $22.9 Billion
in 67,030 Deals
(Angels)
2012 numbers – Center for Venture Research

23. The Series-A Crunch

24. Entrepreneurial Growth
concept->product->market->profit
IPO (market share,
revenues etc )
Crowdfunding
Crowdfunding
$
Venture Capital
Crowdfunding
$
Angels
concept
(accelerators/incubators)
Crowdfunding
$
$
Product
(Risk, growth)

25. What is Crowdfunding ?

26. Crowdfunding
The wisdom of the crowds
The passion of crowds
The safety of crowds

29. Source: http://theyec.org/making-sense-of-the-jobs-act-and-crowdfunding-infographic/

30. •
Source – http;//crowdfunder.com

31. •
Source – http;//crowdfunder.com

32. Crowdfunding has more than tripled in the
past 3 years

35. What about
Equity Crowdfunding?

42. 2015
Equity crowdfunding practical in US

43. FRAUD
Equity (investment)
crowdfunding in US

44. 0
cases
FRAUD

45. Rewards-based, Donation Crowdfunding:
“THE KICKSTARTER MODEL”

49. ALL OR NOTHING

50. Perks &
Rewards

51. Updates (and Blogging)

52. Updates (and Blogging)

53. Comments & Engagement

65. Equity Crowdfunding ...
is here

79. WHY …
Do people Crowdfund?

81. Lessons from Ethan Mollick’s “The Dynamics of Crowdfunding: Determinants of Success and Failure”

82. 3 Why’s:
three main reasons why
people unconnected to a
project or business would
support it:
1. They connect to the greater
purpose of the campaign
2. They connect to a physical
aspect of the campaign like the
rewards
3. They connect to the creative
display of the campaign’s
presentation
What Is Crowdfunding And How Does It Benefit The Economy - Forbes
http://www.forbes.com/sites/tanyaprive/2012/11/27/what-is-crowdfunding-and-how-does-it-benefit-the-economy

83. • Passion
The Real
(Crowdfunding)
Why’s
–
–
–
–
For the technology
For the industry
For the cause
For the product
• Affinity
– For the Entrepreneur
– For the region, industry etc
• Connection
• Every reason BUT R.O.I. …

84. WYNTK
(what you need to know)
Crowdfunding is about …
emotional ROI.
Not financial ROI

85. WYNTK
(when crowdfunding …)
(what you need to know)
“its not what you do,
but why you do it,”

86. http://www.kickstarter.com/projects/1104350651/tiktok-lunatikmulti-touch-watch-kits

88. “Consumers who want products before they are
developed”
Pre-orders
Early adopters
Supporters
http://trendwatching.com/trends/infographics/presumers/

89. The Kickstart Model..
UH OH …

92. WYNTK
(what you need to know)
1. Crowdfunding = New “1st Money” for ventures
($10k - $50k average– but wild exceptions)
2. Equity Crowdfunding is Still Far away
3. Rewards based Model IS Crowdfunding today
4. All or Nothing Crowdfunding – Standard
5. Perks and Rewards: Pre-order Crowdfunding
6. Social Media & Content Intensive
www.propelarizona.com

93. What does success
look like?

94. • The iPhone-friendly Pebble watch earned $7.6
million more than its $100,000 goal.
• And the Galileo iPhone platform closed its
Kickstarter campaign at $702,000, far
surpassing its $100,000 goal.

95. • Ouya raised $2 million in one day for a new Android gaming
console (it’s raised more than $5 million to date),
• the Nifty MiniDrive, external memory for Apple MacBooks.
The tiny storage company is more than 2,000% above its
$11,000 goal with 15 days left in the campaign.

96. What do successful
campaigns have in
common?

97. http://www.kickstarter.com/projects/hop/ele
vation-dock-the-best-dock-for-iphone

98. Projectio
http://www.kickstarter.com/projects/1209578799/projecteo-the-tiny-instagram-projector

99. http://www.kickstarter.com/projects/mikebond/ti2-sentinel-titanium-cache?ref=home_popular

100. http://www.kickstarter.com/projects/poots/kingdom-deathmonster?ref=home_popular

101. http://www.kickstarter.com/projects/smartthings/smartthings-make-yourworld-smarter?ref=category

102. http://www.kickstarter.com/projects/thejumpshot/jumpshot-a-new-weapon-tobattle-pc-frustration?ref=category

103. http://trendwatching.com/trends/infographics/presumers/

104. Successful campaigns took an average
11 days preparing for their launch.
http://blog.indiegogo.com/2013/01/12-insights-for-2012.html

105. Campaigns ran an average 49 days in
2012, as opposed to 60 in 2011.
Successful campaigns fundraised for
39 days.

106. Crowdfunding Myths & Mistakes
•
•
•
•
•
•
•
•
Myth #1: If You Build It, They Will Come
Myth #2: Cash is Free
Making it about you
Unrealistic Expectations
Lack of clarity
No call to action
Expecting to be found: (No Marketing)
Ignoring Small Donations/Donors
http://kickstartershq.com/articles/5-project-crushing-kickstarter-mistakes-how-to-avoid-them
http://www.crowdsourcing.org/document/3-big-crowdfunding-myths-via-funderhut/23804

107. Successful Crowdfunding
Campaigns Focus on
The new 4 P’s …
WYNTK
(what you need to know)
the
the
2.
1.
3.
the
the
4.
www.propelarizona.com

108. The new 4 P’s of
Crowdfunding ..
the
2.
WHO are they?
What motivates them?
Interests, Values …
the
1.
focus on “them” –
not your company
the
3.
the
4.
You are pitching to “them”
$$ Value is a negative driver !
It’s a daily/hourly effort …
TELL A STORY !!
UNIQUE
SOCIAL MEDIA
WHY is more important than $$
It’s about THEM
It’s a conversation …
VIDEO(s) & VISUAL(s)
EXCLUSIVE
UPDATES, BLOGS, NEWS
Tell the story in small ‘chapters’
And what is important to “Them”
Provide Value, and Talking Points
VIDEO(s) & VISUAL(s)
FIRST
RE-POST, TWEETable
And even smaller “sound bites”
Make sure it is …
It’s about … for their network
Give them a Story they
can tell to others.
BUZZWORTHY
VALIDATION & EVIDENCE
www.propelarizona.com

109. Crafting a
Successful
Crowdfunding Campaign

110. Some initial rules ….

111. WYNTK
(what you need to know)
1.
2.
3.
4.
5.
Crowdfunding takes work, new skills.
It takes a strategy, and preparation.
The rules are different.
You can’t just post and run …
It’s a public success or failure – that “stays on
your resume”
www.propelarizona.com

112. Components
of a
Crowdfunding Campaign

113.  Title & Short Description
• (repeatable & compelling)
 Long Description (“The Pitch”)
• Make it a story … about “them”





Visuals: Video, Photos, Images
Team, Deliverables, Details
Perks & rewards
Funding Goals: Amount and Timeframe
Updates & SOCIAL MEDIA CAMPAIGN
• Repeatable Messages
• Daily “routine”
• Traditional marketing too

114. Crafting the “Pitch”

115. First: Who What Why When …
• The 3 Who’s:
– Who are the donors? (affinity & passion)
– Who is benefits? (the market)
– Who are you?
• The 3 Why’s
– Why would your donors care?
– Why does the market care?
– Why are you the right team to do it?

116. First: Who What Why When …
• What is your project & goal?
– Understandable & Simple
– Compelling & Intriguing
– Repeatable & Memorable
• How and When
– How will you achieve your goal? Realistic?
– When, after funding? When will I get my perks?

117. Other Tips
•
•
•
•
•
•
Tell a story
Make it about them
The History of the idea is intriguing
What is the Impact? – why is this important?
Try a FAQ
Call to action – get them involved!

118. Exercise –
Craft the Pitch

119. Crafting your Pitch
Title & Short Description
•(repeatable & compelling)
Long Description (“The Pitch”)
•Make it a story … about “them”
Visuals: Video, Photos, Images
Team, Deliverables, Details
Perks & rewards
Funding Goals: Amount and Timeframe
Updates & SOCIAL MEDIA CAMPAIGN
•Repeatable Messages
•Daily “routine”
•Traditional marketing too
The 3 Who’s:
Who are the donors? (affinity & passion)
Who is benefits? (the market)
Who are you?
The 3 Why’s
Why would your donors care?
Why does the market care?
Why are you the right team to do it?
What is your project & goal?
Tell a story
Make it about them
The History of the idea is intriguing
What is the Impact?
Why is this important?
Try a FAQ
Call to action – get them involved!
Understandable & Simple
Compelling & Intriguing
Repeatable & Memorable
How and When
How will you achieve your goal?
Realistic?
When, after funding?
When will I get my perks?

121. Pitch Notes - 1
•
•
Who (donors, market)
“Why” – the story
•
•
Impact (on the market)
Impact (on the donors)

122. Pitch Notes - 2
•
•
Story, and History …
FAQ
•
•
Perk Ideas (what’s important to donors)
Calls to Action

123. Visuals

124. The Importance of Visual Media
• 64% of successful campaigns in had pitch videos.
• Campaigns with videos under 5 minutes were 25% more likely to reach
their goal than those with videos that were longer.
• Average campaign video length for campaigns was 3 min, 27 seconds.
Campaigns that reach their goal are 16 seconds shorter.
• On average, successful campaigns uploaded 6 media to their gallery.
•
http://blog.indiegogo.com/2013/01/12-insights-for-2012.html

125. Perks & Rewards

127. American Grandmaster
a Patrick Million FILM
Directed by
Patrick Million
Executive Producer
CJ Cornell

128. Rewards Crowdfunding
• Incentives & perks
• Pre-Orders
• Pre-Sumers
• Market Validation

130. Rewards don’t have to worth $$

132. • $25 perk is the single most claimed perk,
representing nearly 25% of all perks that are
selected.
• While the $25 dollar perk is only responsible
for raising 11% of total funds.

133. • $100 perks raise more money than any other
perk price and make up nearly 30% of total
funds. A $100 perk combined with the next
three perk price points: $50, $500, and $1000
makes up about 70% of total money raised by
perks

135. some
Rules for Rewards

136. 1. Make perks unique &
exclusive
Avoid T-shirts, Mugs & Hugs

137. 2. Target them

138. 3. Give them a
connection

139. “The
Cocktail Party
Effect”

140. “The
Restaurant
Effect”

141. “The
Carey School
Effect”

142. The less tangible the perk,
the more public (visible) &
EXCLUSIVE it needs to be.

145. The Campaign

146. How much $$ ?
How long?

147. Discussion
• How much should we raise?
– Have you raised money before? Return?
– Do you/did you work at a highly visible position?
– *** Your social network? Large? Followers?
– Idea - big market? How unique?
– How much (marketing) work will you do?

148. HOW to Crowdfund?
PUSH - Running the campaign
•
•
•
•
Social Media
Comments & Updates
Networking
Personal Pitches

149. Your mission: To get
them talking about
your project

150. Now that you’ve launched …
Continue the story

151. Social Engagement
– Transparency & Trust
– Social Proof & Viral FX
– Engagement & “The Fundamentals”
– Twitter
– Facebook
– Blogging

152. most successful projects receive about
25-40% of their revenue from their
first, second and third degree of
connections.
This could include friends, family, work acquaintances, or
anyone that the owner is connected to.
•
http://www.forbes.com/sites/tanyaprive/2012/11/27/what-is-crowdfunding-and-how-does-it-benefit-the-economy/

153. 1. Create: (of course)
- A Facebook Account
- A Twitter Account
(for your campaign)

154. 2. Tweet & Post
–Frequently
–Uniquely
–Personally

155. 3. Post Updates & Blog
•About your progress
•About the subject
•About the industry
•About the People

156. 4. Go 1-1
•Reply to comments
•Retweet/Repost
Your fans and donors are your most
powerful advocates!

157. 5. Target, Measure & Adjust
• Different Messages for different
groups
• Google, Hootsuite, others
• Learn and Adjust focus

158. Metrics
http://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and-steady

159. Metrics
http://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-and-steady

160. the importance of google analytics to track
and improve performance
• + perks from fivvr
•
•
http://www.perlsteinlab.com/blog/anatomy-of-a-crowdfund-week-3-slow-andsteady

161. Campaign Checkist
Social Media
What to Communicate:
Create a schedule 2-5x / week
Use an automated tool
Eg Hootsuite
Post interesting info –
Not just pleas for money
Not just updates
Vary your targets
Call to action 1/3-1/2 time
1.
2.
3.
4.
5.
Your Progress
Successes, Evidence of success
Ammunition for your supporters
Industry Info, Factoids
People Info
Use analytics and other metrics
Traditional Marketing
Pitch Events
Press Releases
Demos
Testamonials
Use an automated tool
Plan, Schedule & Update
Your Social Network is a Force
Multiplier – but you have to give
them help.

162. Success Factors

163. http://online.wsj.com/article/SB100008723963904438558045776010130940
84438.html?mod=googlenews_wsj#articleTabs%3Darticle

164. http://www.indiegogo.com/blog/2012/05/indiegogo-insight-campaigns-that-take-these-six-actions-raise-8-times-moremoney-than-campaigns-that-dont.html

165. http://www.indiegogo.com/blog/2012/05/indiegogo-insight-campaigns-that-take-these-six-actions-raise-8-times-moremoney-than-campaigns-that-dont.html

166. http://www.indiegogo.com/blog/2012/07/indiegogo-insight-winning-the-middle-game.html

167. successful campaigns raise, on average, 49%
percent of their goals during the first and
last 10% of the campaign length.

168. The most important
secret is …

169. Showing Momentum
(the perception of momentum)

170. The most obvious
secret is …

171. Credibility
= trust, competence
& follow-through

172. www.propelarizona.com
Crowdfunding
Entrepreneurship & Innovation
Arizona Economic Growth

173. www.propelarizona.com
Slideshare/PropelArizona
@PropelArizona
Practical
Crowdfunding
Workshop

177. Crowdfunding is measured in …
days

178. Entrepreneurship