Crowdfunding Basics: A Path to Debt-Free Funding
Crowdfunding is a powerful online fundraising method that allows individuals to raise funds from a large group of people for projects without incurring debt. With an industry generating $17 billion annually and over 6 million worldwide campaigns, crowdfunding is accessible and successful. Projects see an average pledge of $28,656 and enjoy a 22% success rate. Through personalization, engaging content, and effective sharing strategies, campaigns can maximize their funding potential and reach a wide audience.
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Crowdfunding Presented by Memphis SCORE Julie Brander, MBA Alex Medick, 2x CMO & Entrepreneur Https://memphis.score.org
Crowdfunding Basics Crowdfunding is a way to raise funds for any project online through a large group of people who follow you and share with their friends. It is one of the most accessible and successful ways of capturing debt free funding. Crowdfunding is a gigantic industry and growing
Crowdfunding Statistics fundera.com $17 billion is generated yearly through crowdfunding Over 6 million world wide campaigns last year Raise an average of $28,656 22% success rate Crowdfunding projects have an average of 47 backers Fully funded projects have approximately 300 backers Average pledge for all projects is $88
Crowdfunding Market Campaigns with videos earn 105% more Updating your followers raised 126% more 53% of email shares convert into donations 12% Facebook shares convert into donations/investments 3% Twitter shares convert Personalization yields 79% more backers by establishing an emotional connection
Successful campaigns Average campaigns last 9 weeks 42%of funds are raised the 1st and last 3 days 300-500 words optimal to explain your project Average age most likely to participate are 24-35 Posting more and sharing more gets more funds
How to get started Come up with an idea that has a broad market appeal Create something that will have a positive impact on peoples lives Create the story that will spark interest and is relatable Create something that will be shared and talked about Offer products with every contribution and ask for feedback Encourage thoughts, comments and shares Consider an on line or in person event to showcase and solicit investors
Investment/Equity Money Money you don t have to pay back
Crowdfunding The term Crowdfunding describes the collective cooperation, attention and trust by people who network and pool their money - usually via the Internet - to support efforts to assist an individual s startup project or small business. The most utilized platforms are: Kickstarter Indiegogo
Incentive Based Crowdfunding Donations motivated by philanthropy and peer support and sponsorship where there is no expected financial return. Money contributed to the campaign will receive: First/free copy Free product Free use of a service Use of App Special discounts on future products Special early adopter swag
Kickstarter.com Kickstarter started in 2009 and is for the funding of projects that are both creative and for those developing consumer products. Successful campaigns have been used to fund albums, films, creative works.
Indiegogo.com The world's leading international funding platform helping people create campaigns and fund ideas since 2008. Have something you are passionate about? On IndieGoGo you can create a funding campaign to raise money quickly and securely. This platform has helped to raise a billion dollars for over 95,000 campaigns, across 210 countries.
Platform Fees Kickstarter 5% platform fee collected from all the monies processed plus a 3% + $ .20 credit card/administrative fee. (U.S. residents) Indiegogo.com 5% platform fee, 8% if you run campaign on another platform, plus a 3% credit card processing fee + $0.30 per transaction. ($25 wire fee for non- U.S. campaigns)
Equity Crowdfunding (Reg CF, Reg A+) These are also titled micro-angel investments. Equity Crowdfunding allows accredited and non-accredited individuals to invest in startups in exchange for equity in the company. This is primarily done through a SAFE note, where an investor will receive a return on investment in the situation of a startup liquidation event. - Reg CF allows startups to raise up-to: $5 Million - Reg A+ allows startups to raise up-to: $75 Million
www.seedinvest.com SeedInvest.com is an equity crowdfunding platform, opening up access to venture capital and angel investing for everyone. It vets the startups that it promotes. This is a simple way to invest in early stage companies,
ity. www.seedinvest.com Seed/Series A We fund startups with traction through investments that range from $50-500K. You ll get access to our vast network of investors, partners and founders. Positive referrals from 500 Startups founders and mentors is the best way to get attention. Accelerators With their 4-month accelerator program you ll get access to awesome mentorship, hands-on sessions with startup experts, and a great office space where you ll work with other smart, talented founders from around the world. The accelerator investment is $100k net of fees (or $125k gross) for 5% of your company. Mountain View, San Francisco and Mexico City.
iFundWomen.com iFundwomen.com is funding platform designed for women entrepreneurs providing access to capital via crowdfunding, business grants coaching and connections. Their mission is to close the funding gap for women owned businesses. Startup funding with a flexible crowdfunding platform. Offers in addition to investments, coaching and a private community of other female founders.
Republic Republic is one of the most prominent platforms for raising Reg CF capital. Their platforms attracts accredited and non-accredited investors alike to invest in startups ranging from high-growth to under- representative founders. Republic curates private investing opportunities with high-growth potential across startups, gaming, real estate, and crypto.
Regulations Crowdfunding is highly regulated and overseen by the Securities and exchange commission and financial industry regulatory authority. There are disclosures for investors. A lawyer who specializes in this can help with documents. Companies raise capital from investors via government monitored online platforms, covid disrupted traditional financing so alternative funding sources were sought
Why Crowdfunding? The fundraising game changed with the 2015 JOBS ACT you no longer need traditional banking or get venture capital you can now rely on friends, family and fans to support your efforts which also helps you get off the ground and establish a community for long term growth. This eliminates the barrier to entry
QUESTIONS? YOU CAN GET INVESTMENT MONEY!
