Propel Arizona, practical Crowdfunding Workshop #1, Dec 1 2012, @GangplankHQ Arizona

1. Practical
Crowdfunding
Workshop
www.propelarizona.com

2. Agenda
1. Crowdfunding overview
2. Crafting the Idea and Campaign
3. Preparing the Visuals
4. Perks and rewards
5. Running a successful campaign
Practical
Crowdfunding
www.propelarizona.com Workshop

3. Crowdfunding
overview

4. The Funding Gap

5. Concept to Product to Growth

6. Concept to Product to Growth
$ $ $ $

7. Concept to Product to Growth
Entrepreneur IPO
$

8. Concept to Product to Growth
Entrepreneur IPO
$
Venture
Entrepreneur Capital IPO
$ $

9. Concept to Product to Growth
Entrepreneur IPO
$
Venture
Entrepreneur Capital IPO
$ $
Angels, Venture
Entrepreneur accel & incub Capital IPO
$ $ $

10. Concept to Product to Growth
Angels, Venture
Entrepreneur accel & incub Capital IPO
$ $ $ $
$
Crowdfunding

11. Concept to Product to Growth
Angels, Venture
Entrepreneur accel & incub Capital IPO
$ $ $ $
$ $ Crowdfunding
Crowdfunding

12. Concept to Product to Growth
Angels, Venture
Entrepreneur accel & incub Capital IPO
$ $ $ $
$ $Crowdfunding $
Crowdfunding Crowdfunding

13. Concept to Product to Growth
Angels, Venture
Entrepreneur accel & incub Capital IPO
$ $ $ $
$ $Crowdfunding $
Crowdfunding Crowdfunding Crowdfunding
$

14. Crowdfunding
Soliciting & Collecting relatively small amounts
of money (funding) from a large number
(crowd) of people

15. What is Crowdfunding

16. What is Crowdfunding

17. What is Crowdfunding

18. What is Crowdfunding

19. Crowdfunding Concepts
• Debt Crowdfunding
– microloans
– P2P lending
• Donation Crowdfunding
– Charity/Causes
– Kickstarter Model
– Rewards Based
– Pre-Order/Presumer
• Equity Crowdfunding
– JOBS act

22. Equity Crowdfunding - JOBS
• Eliminates ban on general solicitation and general advertising in connection
with private offerings to accredited investors under Regulation D (Rule 506) and to
qualified institutional buyers under Rule 144A.
• Exemption from Securities Act registration “crowdfunding” transactions
(involving access to small amounts of capital through the internet).
• Exemption to allow issuance of up to $50 million of securities in any 12-month
period, up from the current $5 million threshold
• An increase in the number of shareholders a company may have before being
required to register its common stock with the SEC and become a public reporting
company from 500 to 2,000 total shareholders (including up to 500
“unaccredited” shareholders)
• Amount each person may invest in offerings of this type, tiered by the person's net
worth or yearly income.

23. Real Crowdfunding –
that works.
Today

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

28. ALL OR NOTHING

29. Perks &
Rewards

30. Updates (and Blogging)

31. Updates (and Blogging)

32. Comments & Engagement

33. Kickstarter 2011
• Let’s look at some statistics for 2011:
• Launched Projects: 27,086
• Successful Projects: 11,836
• Dollars Pledged: $99,344,382
• Rewards Selected: 1,150,461
• Total Visitors: 30,590,342
• Project Success Rate: 46%

34. Why ?
(do people crowdfund)

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

37. “its not what you do, but
why you do it,”

38. There are 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/

39. WHY Crowdfunding?
• Passion
– 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. …

40. emotional rate of return.
Not financial ROI

41. http://www.kickstarter.com/projects/1104350651/tiktok-lunatik-
multi-touch-watch-kits

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

44. The Kickstart Model..
UH OH …

47. http://www.indiegogo.com/blog/2011/11/indie
gogo-insight-campaigns-with-teams-raised-
180-as-much-money-as-individuals.html

48. 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

49. HOW to Crowdfund?
1. PRE - Preparing
2. PUSH - Running the campaign
3. POST – Delivering on your Promise

50. Some initial rules ….

51. 1. Crowdfunding takes work, new skills.
2. It takes a strategy, and preparation.
3. The rules are different.
4. You can’t just post and run …
5. It’s a public success or failure – that “stays on
your resume”

52. Crafting the Idea
and Campaign

53. HOW to Crowdfund?
1. PRE - Preparing
– Build Credibility
– Sharpen Pitch & Post
– Perks and Rewards
– Timefames & $$

54. first …
What does success
look like?

55. • 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.

56. • 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.

57. What do successful
campaigns have in
common?

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

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

60. http://www.kickstarter.com/projects/1719196889/iceblink-engine?ref=home_location

61. http://www.kickstarter.com/projects/812916345/magnet-comic-a-custom-magnetic-and-dry-erase-
comic?ref=home_popular

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

63. http://www.kickstarter.com/projects/poots/kingdom-death-
monster?ref=home_popular

64. http://www.kickstarter.com/projects/smartthings/smartthings-make-your-
world-smarter?ref=category

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

66. http://www.kickstarter.com/projects/374405221/mary-elizabeths-sock-
the-first-book-collection?ref=home_location

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

69. 7 habits of highly successful
campaigns
• They already have fan bases
• They build off of something familiar
• They are simple
• They are (usually) NOT about the founders
• They appeal to a specific interest ….

70. Before you start, remember …
• For your target, It's about emotion
• It’s about elitness
• being part of the cool group
• feeling like you're important -
• feeling powerful! Influential

71. First Exercise(s)

72. Checklist
1. Idea-check: (focus on target)
– About “them” not you.
– Emotional appeal: Passion, exclusivity, emotion.
2. Funding Level
– Realistic (for you and them)
– Use of proceeds
3. Timeframe
4. Possible perks (not yet)

73. Assignment

74. 1. Idea
– What’s the story
– What’s the emotional appeal, benefits
2. Who are the targets
– Benefits. Connections
3. Describe, tell story.
4. What visuals should you provide.
5. How much, how long? When done?

75. Preparing
the Visuals

76. Perks
and rewards

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

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

81. Rewards don’t have to worth $$

83. • $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.

84. • . $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

86. some
Rules for Rewards

87. 1. Make them unique &
Exclusive

88. 2. Target them

89. 3. Give them a
connection

90. The Cocktail Party
Effect

91. The Restaurant Effect

92. The Carey School
Effect

95. Assignment

96. 1. What is important to your target?
2. What rewards can connect them to you or
your project
3. What rewards are part of your project
4. What unique rewards can you think of (that
others are not doing)
5. What rewards will get them talking to others!

97. Running a
successful campaign

98. HOW to Crowdfund?
1. PRE - Preparing
2. PUSH - Running the campaign
3. POST – Delivering on your Promise

99. HOW to Crowdfund?
1. PRE - Preparing
– Build Credibility
– Sharpen Pitch & Post
– Perks and Rewards
– Timefames & $$

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

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

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

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

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

105. http://www.kickstarter.com/projects/1209578799/projecteo-the-tiny-instagram-
projector?ref=home_popular

106. • 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, including their second and third
degree connections.
• http://www.forbes.com/sites/tanyaprive/2012/11/27/what-is-
crowdfunding-and-how-does-it-benefit-the-economy/

107. Continue the story…

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

109. 1. Create:
- A Facebook Account
- A Twitter Account
(for your campaign)

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

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

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

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

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

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

116. •
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-and-steady

117. HOW to Crowdfund?
POST - campaign
• Thanks …
• Perks and rewards
• Updates
• Completing your goals !!

118. The most important
secret is …

119. Showing Momentum
(the perception of momentum)

120. The most obvious
secret is …

121. Credibility
= trust, competence
& follow-through

122. Practical
Crowdfunding
Workshop
www.propelarizona.com @PropelArizona