JOBS (Jumpstart Our Business Startups Act) Really it started with PBR Story February 2010 $200 million from 5 million beer fans S E C No accredited investors Laws prohibited regular investor in this type of deal Foundation of Crowdfunding No beer was harmed during this campaign November(ish) 2009 - Michael Migliozzi and Brian Flatow www.buyabeercompany.com “Crowdsourcing” $300 million Compensation for investor? “Crowdsourced Certificate of Ownership” Beer equal to the amount pledged ACT OF CONGRESS Startup Exemption Team Startup Exemption Framework Story WSJ JOBS Act Crowdfunding Describes multiple different funding relationships between individuals and organizations connected via the Internet. Token crowdfunding Raising NON-EQUITY capital in exchange for “tokens” Crowdfund investing Section 4(6) of the JOBS Act Provides exemption from registration SEC registered crowdfunding platform * Regulation D crowdfunding Equity and debt capital by private companies Rule 506 of Regulation D (amended by the JOBS Act) Rule 506 Crowdfunding Compare the Bills Seed round funding Term Sheet Series A funding Offering Memorandum Venture Capitalists Equity Security Private Equity Funds Debt Security Angel Investor Revenue-based Security Private Share Issuance limit $1 million in any 12 month period Facilitation Small investments by many people Annual income / Net Worth restrictions Time restrictions CrowdFunding Initiative (CFI) Lowers the failure rate of small businesses Augments and supports capital formation No socioeconomic discrimination Tipping Point Rewards vs Equity Ownership in the business Automated Launcht Niche platforms Humor Break Majority of projects are $1000 to $100,000 Less than 1% of funded projects are over $100k Will not replace Venture Capital Commercial Lending Angel Investor Private Investment Constant upkeep and promotion Keep the buzz buzzing Kickstarter Ulule Indiegogo Earlyshares RocketHub Startsomegood GoFundMe Sportfunder Razoo 33needs Crowdrise ChipIn Pledge Music Buzzbnk Sellaband InventionBuy.com Appbackr Crowdtilt Crowdfunder Go4Funding CrowdLever Cumplo Fundarole Dancefunder iCrowd CrowdBnk Petridish FundAGeek 2011 $1.5 billion raised worldwide (63% increase) 1.2 million successful campaigns Funds pledged to paid ratio declined slightly April, 2012 – 452 platforms Over $2 billion Kickstarter Peerbackers Indiegogo Go Fund Me Rockethub Razoo Crowdfunder Crowdrise Quirky PledgeMusic CoFolio Sellaband Start Some good Appbackr CFP Site Model Focus Kickstarter kickstarter.com AoN Art / Creative Indigogo indiegogo.com KiA / AoN Any Rockethub rockethub.com KiA Varies Crowdfunder crowdfunder.com Unknown CF 2.0 Quirky quirky.com Unknown Inventions CoFolio mycofolio.com Equity Local Small Biz Start Some startsomegood.com Unknown Socially Good Responsible Peerbackers peerbackers.com Kia / AoN Any Razoo razoo.com KiA Indiv. / Cause / NP Go Fund Me gofundme.com KiA / Aon Any – Personal Crowdrise crowdrise.com KiA Celeb fundraising Appbackr appbackr.com Sales based Mobile Apps only 2012 Statistics $319 million pledged $274 million collected 2.24 million backers 709 million page views 86 million unique users About 50% of projects funded Art Music Comics Photography Dance Publishing Fashion Technology Film Hardware Food Software Games Theater TikTok+LunaTik Sought $15k, raised nearly $1 mil Watch Elevation Dock Sought $75k, raised nearly $1.5 mil Dock E-Paper Watch Sought $100k, raised…. Another Watch 2012 Statistics Projects raised 20% more than in 2011 Core campaigns ran 49 days (60) Successful campaigns ran 39 days 14% of campaigns had a single donor refer more contributors than the project owner Let’s Build a Goddamn Tesla Museum $1.37 million of $850k goal (over 33,000 contributors) Who Gives a Crap $66,548 of $50k goal Yellow Jacket iPhone stun gun $100,751 of $100k goal BugASalt $15,000 goal $577,541 BugASalt Romeo and Juliet Do’s and Don’ts Do Research Token (Reward) Selection Target Audience Pitch Video Funding Goal Network, Network, Network Update, Update, Update Study other projects Funded and not funded Similarities / Differences Market Who are they? What’s your hook? Uniqueness or Differentiation Are the rewards logical? Do they make sense Tiers $25 $50 (25% of all pledges) $100 Limited Offering Tangible vs. Personal / Virtual / Professional What’s your hook? Personalize Why would I give you money? Static Entertainment Morningside Students Morningside Alumni Parents of current/former college students Clear / Natural Approach Humorous Serious Quirky / Imaginative Details Call to action Interesting – catchy Length of video Reasonable Previous campaigns Successful Failures Compelling Rewards Funding Ranges Tiers Engaging Exploit your network Facebook LinkedIn Twitter Google+ YouTube Pinterest Email Updates on campaigns Time Funding request too high Poor (flimsy) rewards BalconyTV $1 Tom will sing on the Dublin balcony $5 Tom will dance on the Dublin balcony $20 We will send you good karma from the balcony $50 Give a special shout out in BalconyTV episode All the same… Pen type-A (retail price $99) $2500 request Produce a run of pens for $50 each $1 A thank you note on website (warm fuzzy) $25 Super thank you credit on website and a drawing of an invention $50 A Pen $75 Pen + autographed drawing $100 Pen + Pen for friend $150 Pen + Pen for two friends Requested $2500, received $282k Pre campaign strategy Platform Leverage your networks Prepare the perfect campaign Remember WHY people pledge Perks / Rewards / Tokens Update & Follow up Static Entertainment – Indiegogo and Kickstarter www.static-entertainment.com Discover My Campus – Appbackr FC2000 – Quirky and Indiegogo Rebranding campaign http://www.fielders-choice.com/ Slide N Glide – Quirky and Indiegogo http://www.slidenglidetray.com/ Cell: 712 870 0934 Email: [email protected] Twitter: @dwubIA Blog: crowdfundiowa.com LinkedIn: www.linkedin.com/pub/dan-wubbena/b/810/120/ .