Crowdfunding is becoming a formidable new way to fund new entrepreneurial projects and companies – particularly for creative projects and innovative design products. But this new world of crowdfunding has a new set of rules, and requires new techniques and approaches – from crafting a pitch to creating videos to new legal and marketing issues. In this workshop, you’ll learn, hands on: How to prepare your idea or company to attract crowdfunding; How to conduct a successful crowdfunding campaign using social media, and How to leverage your crowdfunding campaign into broader entrepreneurial success. You’ll learn the best-practices and methods of writing to attract funding, and to create a compelling crowdfunding video yourself, using low cost equipment and free software tools. - See more at: http://entblog.cogswell.edu/crowdfundingworkshop-march

1. CROWDFUNDING
has arrived!
Cogswell College of Silicon Valley – CJ Cornell @CogswellCollege
C.J. Cornell @cjcornell
Cogswell Polytechnical College @Cogswell_Ent

2. CJ Cornell is ...

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

4. $28+ Billion
that’s with a “B”

5. 3,900
VC deals in 2013

6. 1,900
# seed/early stage deals

8. 1,900
# lottery millionares in US each year

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

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

11. What is Crowdfunding ?

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

13. Crowd FUNDING: (1)
soliciting & collecting
relatively small amounts of money (“funding”)
from a large number of people (“the crowd”)

14. Crowd FUNDING: (2)
many individuals (the crowd)
coming together to support* ideas**
by other individuals and organizations.
Support=Funding,feedback,expertise,connectionsandmore
Ideas=concepts,projects,products,activities,services,,causes,eventsetc…

17. • Source – http;//crowdfunder.com
Currently “kinda-sorta” legal in US – Sept 23rd 2013

29. Equity Crowdfunding ...
is here

42. Jumpstart our Business Startup (JOBS) Act
5 April 2012 (& Aug 2012, & Dec 2012 ….)

43. • Equity Crowdfunding - not (really) in the USA yet.
• JOBS act (April 2012) technically enables CF – but has
not yet been approved by SEC.
• No documented fraud in USA or other areas.
• Equity CF is for “high growth companies” seeking
significant funding from experienced investors
• Will dramatically change in 3-5 years (CJ prediction)
www.propelarizona.com
WYNTK(what you need to know)

44. September 23rd
This is both GREAT news and BAD news
1. “General Solicitation” is allowed
2. But “Accredited Investors” ONLY
3. You must FILE w/SEC Prior
4. Investors must provide documentation
SEC Changes some 80-year old rules
(“506c”)

45. Rewards based,
“contribution”
crowdfunding
The Kickstarter model –
‘donations’

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

50. ALL OR NOTHING

51. Perks &
Rewards

52. Updates (and Blogging)

53. Updates (and Blogging)

54. Comments & Engagement

55. Source: http://KickstartersHQ.com

56. WHY …
Do people Crowdfund?

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

59. 3 Why’s: 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
three main reasons why
people unconnected to a
project or business would
support it:
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

60. The Real
(Crowdfunding)
Why’s
• 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. …

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

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

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

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

66. UH OH …
The Kickstart Model..

69. 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
WYNTK(what you need to know)

70. What does success
look like?

71. • 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.

72. • 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.

73. What do successful
campaigns have in
common?

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

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

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

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

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

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

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

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

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

83. 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

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

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

86. Crafting a
Successful
Crowdfunding Campaign

87. Some initial rules ….

88. 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”
www.propelarizona.com
WYNTK(what you need to know)

89. Components
of a
Crowdfunding Campaign

90.  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

91. Crafting the “Pitch”

92. 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?

93. 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?

94. 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!

95. Exercise –
Craft the Pitch

96. 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
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!
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?
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?

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

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

99. Visuals

100. 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

101. Perks & Rewards

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

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

106. Rewards don’t have to worth $$

108. • $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.

109. • $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

111. some
Rules for Rewards

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

113. 2. Target them

114. 3. Give them a
connection

115. “The
Cocktail Party
Effect”

116. “The
Restaurant
Effect”

117. “The
Carey School
Effect”

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

121. The Campaign

122. How much $$ ?
How long?

123. 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?

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

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

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

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

128. 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/

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

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

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

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

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

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

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

136. 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

137. Campaign Checklist
Social Media
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
Use analytics and other metrics
Traditional Marketing
Pitch Events
Press Releases
Demos
Testamonials
Use an automated tool
What to Communicate:
1. Your Progress
2. Successes, Evidence of success
3. Ammunition for your supporters
4. Industry Info, Factoids
5. People Info
Plan, Schedule & Update
Your Social Network is a
Force Multiplier –
but you have to give them
help.

138. Success Factors

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

140. 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

141. 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

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

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

144. The most important
secret is …

145. Showing Momentum
(the perception of momentum)

146. The most obvious
secret is …

147. Credibility
= trust, competence
& follow-through

150. days
Crowdfunding is measured in …