Visit www.buentrepreneurship.wordpress.com for more works related to entrepreneurship! Made by students from Bishop's University, Quebec, Canada.

1. WHAT IS CROWDFUNDING?
“THE PRACTICE OF SOLICITING
FINANCIAL CONTRIBUTIONS FROM A
LARGE NUMBER OF PEOPLE
ESPECIALLY FROM THE ONLINE
COMMUNITY”
- MERRIAM-WEBSTER DICTIONARY

2. BASIC OVERVIEW OF
THE INDUSTRY
2012: - 2.7 Billion $ raised
- 1,000,000 campaigns
2013: - 5.1 Billion $ raised
~ 2025: World Bank estimates crowdfunding market could
reach 96 billion $.
*1.8x size of global venture capital industry today.

3. PROS AND CONS OF CROWDFUNDING
For Whom Pros Cons
Creators -Better Project/Supporter match
-Provide info about projects
-Increase supply of early capital
-Early market research
-Engage users in creation of
product
-Easier to create group-culture
early
-Disclosure Risk (patent, customers,
costs, key employees, strategy)
-Difficult to raise follow-up capital
-Difficult to deal with large number of
investors
-Must deal with differing visions
Funders -Access to investment
opportunities
-Early access to new products
-Community participation
-Support for product/service/idea
-Formalisation of contracts
-Creator incompetence
-Fraud: lack of repeated financial
interaction increases chances of
fraud
-Project risk: Creator controls
information release
Platforms -Revenue model: 4-6% of funded
projects
-Simple mission: Maximize
-Reputation Risk

4. TYPES OF
CROWDFUNDING
Donation
• Backers donate money to ideas they want to see turned into
reality.
Reward
• Backers get a product/service or personal thank-you for
backing a project or business
Equity
• Backers get shares in company in exchange for finance
Credit/Debt
• Backers loan money and in return get back capital (most
cases with interest)

5. THE BIG GUYS
Kickstarter VS Indiegogo

6. KICKSTARTER
- “all-or-nothing” funding. If your campaign does not reach
its full goal by the set date, the pledged donations cannot
be collected and must be returned to the donors
- campaign harder and promote their passion to make sure
they receive the funding necessary
- selective of projects that are allowed to be funded
- all projects have a clear goal and can be completed
- 5% fee for successfully funded projects, while failed
projects incur no fees
- Average crowdfunding campaign: $5,000

7. INDIEGOGO
- Open to all
- Success is driven by perks, rewards
- flexible funding (can either keep or not keep funding if goals
are not reached)
- site applies a 4% fee to the funds raised for successful
projects, making it a slightly cheaper
- Flexible Funding allows creators to keep the funds they have
raised, for a 9% fee, even if the project is ultimately
unsuccessful. However, creators are held accountable for
delivering all promised donation perks.
- Unsuccessful Fixed Funding campaigns are not charged any
fees, creators are not required to fulfill any donation perks, and
all contributions are returned.

8. THE COMPARISON

11. THE PITCH
The video pitch is the best way to sell your idea online.
Having a good video pitch can make or break your campaign.
EXAMPLE 1 EXAMPLE 2

12. THE LIST
10) Vision that inspires
- The key is inspiring people to take action
- Karen Klein, the bullied bus lady
9) Publish the facts
- Entrepreneurs backed by third-party vetting actually have
a better success rate
8) Urgency
- crowd-funding platforms require time limits on our
funding goals, but also because studies show that
campaigns that reach 30% of their funding goals within
the first seven days are the ones most likely to get to
100%
- As soon as a project is posted, the clock starts ticking.

13. THE LIST (CONTINUED)
7) Social proof (ALS Ice bucket challenge)
- Humans want immediate social proof before they join new things
- Using our own personal networks is critical
- Getting well known industry experts to back to you is always a plus
6) Creativity
- much competition for attention that people have learned to tune out the noise
- crowd-funding platforms report that the more creatively presented projects have
higher success rates—beyond 55%.
5) Making it easy to say “Yes” (Veronica Mars)
- People don’t like to pony up money for things that they question
- prefer to make those buying decisions in small quantities
- setting lower requirements for entry, while clearly demonstrating high value
4) Exclusivity
- People pay big money for exclusivity, not common promotion.

14. THE LIST (CONTINUED)
3) A Solid plan (shredz)
- marketing and promotion are critical for a successful crowd-funding
campaign
- social media is key to the viralability of your campaign
- Timing is everything
2) Share the details
- Goals and goal-setting are important characteristics of any campaign
- objectives, and challenges
- By addressing the challenges upfront, it helps investors connect with the
project and see that failure has been considered, details have been
shared, and a plan has been put in place.
1) Authenticity
- We want to see the person behind the mask
- Studies show that the most successful campaigns connect to a person
or story.

15. TACTICS AND
METHODS
Partner with other brands
- Access new markets
- Inherit brand image
ex: Uniqlo sponsoring free admission to the museum of modern art.
Referrals
- Allows for rapid growth of customer-base
- Cost-effective
ex: Dropbox offering more inbox space for every refferal.
Freebies to connected “influencers”
- Endorsements by influencers help generate buzz, which can translate into
sales
ex: Uber offered free rides to VIPs at local tech and venture capital events.

16. TACTICS AND METHODS
(CONTINUED)
Pre-launch exclusivity (beta products)
- Generates buzz
- Keeps large donors happy
Provide valuable content
- Allows you to build an engaged audience
- Helps you establish a reputation as an expert in your industry
- Helps customers feel more connected and generates brand ambassadors

18. QUESTIONS?
* Don’t forget to pickup a checklist!