Crowd Funding your Big Idea With Josh Apitz Youth In Business Workshops GOLD COAST 27-28 July SYDNEY 10-11th August Crowd Funding your Big Idea With Josh Apitz What Is Crowd Funding? • Allows you to raise funding for your idea, business or project, from anyone who wants to contribute • It allows individuals to make their ideas a reality, by leveraging the power of funding from the crowd • The crowd backs your idea with pledges of money. While the project owners ‘thank’ their backers with rewards… The Old Way To Source Funding? • Traditionally, if you needed money to start your new business or idea • Your would create a whole bunch of detailed planning • Including – Detailed business plan – Expensive market research – Detailed Prototypes – Preferably sales to show that your system works The Old Way To Source Funding? • Once you had spent all that time planning • You then had to find people with money willing to back you and your idea – Examples include – Banks – Angel Investors – Venture Capital Firms • All of which stack the odds in their favour – Because it is their money after all Why Crowd Funding? • Crowdfunding platforms turns the traditional model on its head • Instead of spending time and money pitching your business to investors – praying you find the right one • You let the investors come to you – • And make the offer or rewards suit you and your business Crowd Funding Categories Cool Examples of Crowd Funding • Amanda Palmer and her band • Quit her record label • The Grand Theft Orchestra • Launched a new album – 100% Funded by Kickstarter • They raised $1,192,793 in one month • Used Social Media to get the word out and even delivered a TED talk Cool Examples of Crowd Funding • Goldie Blox Toys • Construction Toys for Girls • Book Series – featuring Goldie • Who loves to build things • After raising $285,881 in 2012 • They are now available in Toys r Us Cool Examples of Crowd Funding • Support a mission to space • Solar powered exploration space craft • $1,241,615 pledged of a $200,000 Goal • Boldly taking crowd funding into space Cool Examples of Crowd Funding • Coolest Cooler • With Built in ice crushing blender • Blue tooth Water proof speakers and USB Charger • Who Wants one? • $13,285,226 raised in 62,642 Funders Crowd Funding Benefits • It is Free • Provides access to capital • It takes away risk • Literally - sell it before you build it • Make Pre sales • Marketing tool - Great ideas are laid out to model Crowd Funding Benefits • Gives proof of concept • Introduces you to loyal cusomers • It is easier than going to a bank • Access to thousands of accredited investors • You deal with investors on your terms • Free PR and Exposure • Great Feedback on your Business Crowd Funding Disadvantages • They can take time and effort to set up • It can take months- depending on how you set it up • You pay 8% - 12 of what you raise to the platform • 60% of Campaigns fail - $5,000 is the average successful raise rate • Only half of the successful campaigns make over 10% of their goal 3 Types of Crowd Funding 1. Equity based model: AngelList or VentureCrowd 2. Donate money model for example Go Fund Me 3. Reward based or Pre order type model e.g. Kickstarter & Indiegogo 1. Equity Based Crowd Funding • Example AngelList or VentureCrowd • Contributors become part owners in your company • They receive a return on their investment • By getting a share of your profits 2. Donation Crowd Funding • Example Go Fund Me • People invest because they believe in the cause • No Financial return to the investors • Includes – Fundraising, disaster relief, charities, non for profits and medical bills Go Fund Me Home Page 3. Rewards Based Crowd Funding • Example Kickstarter and Indiegogo • Offers a different rewards at different prices – including pre sales • Offers supporters perceived value • Raise money on the difference between the cost of the reward vs the price you charge Kickstarter Home Page Kick Starter Bedtime Story Projector Indiegogo Home Page Indiegogo Bionic Gym Youth In Business Example Youth In Business Example What is Seagull Milk: • An innovative sunscreen that won’t sting your eyes, leave skin slippery or damage skin. • Give back part proceeds to ‘Take3ForTheSea’ cleaning up the ocean from plastic pollution. • On a mission to fight skin cancer since 2 in 3 Australians & 1 in 5 Americans are predicted to suffer from the condition. Youth In Business Example The Steps We Took: 1. Social Media momentum before campaign was live, and throughout campaign to keep people updated 2. Press Interviews with News, Radio, etc… 3. Market Stores (Pre-orders) 4. Networking events and meeting new people who could help get the word out. Youth In Business Example We’re We Were Featured Youth In Business Example Our Result • In 2 campaigns we raised $10,000 in pre-sales before we’d even payed for manufacturing. • Had over 200 customers order Seagull Milk • Had been featured in over 10+ different media presences with a minimum of 500,000 people hearing about us. Youth In Business Example The Things We Learnt: • Milk it for all it’s got! (Exposure, Exposure, Exposure) • Build up heaps of raving fans wanting your product months before you launch your campaign. • Plan at least 6 -12 months before you go live building momentum around what you’re doing (e.g. Winter months) • Testimonials are key (want to know it works) Youth In Business Example Personal Things Josh Learnt: • You’ve got to be BOLD and OUTGOING • Even when it gets tough and you might not reach your target, you still need to push through and make sales happen (e.g. stepping out of comfort zone, doorknocking) • Try your best and get in front of peoples faces because your young and people want to give you a go Youth In Business Example What We’d Recommend If You Were Thinking of Crowdfunding: • Contact large influences to try and give a testimonial on your product and how they loved it. • Make a engaging, memorable and valuable video for your campaign and get friends to share around. • Market the valuable RESULTS that people will benefit from if they use your product. Overview 1. What is Crowd Funding 8. Examples of Campaigns 2. The old way to source financing 9. Youth In Business Example 3. Why we love crowd funding 4. Cool examples of crowd funding 5. Benefits of crowd funding 6. Disadvantages of crowdfunding 7. 3 types of Crowd funding – Equity based – Donation – Reward Based.