Crowdfunding Crowdfunding A concept whose time has come?A concept whose time has come?
#smwcrowdfunding#smwcrowdfunding #smwldn
Social Media Week LondonSocial Media Week London20122012
AgendaAgenda
• Tim Wright – twintangibles
• Stewart Whyte – McClure Naismith
• Q&A
What is Crowdfunding?What is Crowdfunding?
“Crowdfunding is a method of raising capital, or resources, by collecting
together lots of small amounts from a large number of people generally using
the Internet and social media.”
“Crowdfunding is a method of raising capital, or resources, by collecting
together lots of small amounts from a large number of people generally using
the Internet and social media.”
www.xplane.com/obamawww.xplane.com/obama
Obama 2008 CampaignObama 2008 CampaignObama 2008 CampaignObama 2008 Campaign
$122
$264.5M
$27.7m
$88.2m
Obama McCain
Total
<$200
•First time any First time any company in Europe had company in Europe had attempted to raise attempted to raise money via an online money via an online share offeringshare offering
11stst round: round:• 10% Firms 10% Firms
EquityEquity• £230 per £230 per
shareshare• 1300 1300
investorsinvestors• 20% off in 20% off in
the shop!the shop!
BrewdogBrewdogBrewdogBrewdog
22ndnd round: round:• 8% Firms Equity8% Firms Equity• £95 per share£95 per share• 5000 investors5000 investors• 90% sold in 3 months90% sold in 3 months• £1m investment in less £1m investment in less
than 2 weeks.than 2 weeks.• £95 to £12k individual £95 to £12k individual
investments investments
All or Nothing
Take it All
Holding Model
Club Model
Micro-lending
P2P
Reward Based
Equity Based
Micro-finance
CrowdfundingPlatform Models
Where is it Used?Where is it Used?
Source http://www.core77.com/blog/kickstarter/crowdfunding_revolution_should_i_do_this_21697.asp
The Long TailThe Long Tail
Products
Popu
lari
ty
Quantity
Valu
e
?Re-imagine YourselfRe-imagine Yourself
£
Social Media ReachSocial Media ReachSocial Media ReachSocial Media Reach
Expectation of ReturnExpectation of Return
• Non-traditionalNon-traditional• Brand loyaltyBrand loyalty• Less aggressive?Less aggressive?• Longer term?Longer term?
Coase’s Penguin – Yochai BenklerCoase’s Penguin – Yochai Benkler
AdvantagesAdvantages
• Market testingMarket testing• Distributed cognitionDistributed cognition• Not just cashNot just cash• Small sums quickly availableSmall sums quickly available• Brand advocatesBrand advocates• Increasingly a location for VCsIncreasingly a location for VCs• Stable investmentStable investment• Expectation of returnExpectation of return
Printrbot – 3D PrinterPrintrbot – 3D PrinterPrintrbot – 3D PrinterPrintrbot – 3D Printer
•$25,000 Goal$25,000 Goal
•Avg. donation $460Avg. donation $460
•17 Reward categories17 Reward categories
The Bicycle AcademyThe Bicycle AcademyThe Bicycle AcademyThe Bicycle Academy
•£40,000 Goal£40,000 Goal
•Funded in 6 daysFunded in 6 days
•9 Reward categories9 Reward categories
KickstarterKickstarter funditfundit
44%
100
0
75%
Relative SuccessRelative Success
Keys to SuccessKeys to Success
• Be Social Media readyBe Social Media ready• Have a planHave a plan• Select your project carefullySelect your project carefully • Select your platform carefullySelect your platform carefully• Develop your rewardsDevelop your rewards• Create your pitchCreate your pitch• Select your channelsSelect your channels • Develop a publishing planDevelop a publishing plan • Define the resource requiredDefine the resource required • Get advice Get advice • Get legal adviceGet legal advice
