Crowdfunding for Value Chains Chris& Electris, Tellus Ins&tute Accelera&ng Impact Project Cross Regional Convening Berea, KY September 11, 2013
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Crowdfunding for Value Chains Chris& Electris, Tellus Ins&tute Accelera&ng Impact Project Cross Regional Convening Berea, KY September 11, 2013
Accelerating Impact Project • Assis&ng grantees to develop funding beyond Ford Founda&on grants.
• Helping grantees assess the best tools and approaches for aKrac&ng funds and investments.
• Crea&ng tools to help grantees in funding outreach. • Most grantees are s&ll in seed or emerging stages, and more in the category of dona&ons , rather than formal investments that offer a return to investors.
• At a &me of scarce founda&on and government dollars, crowdfunding is a poten&ally powerful tool that most grantees can use to unlock their value chain’s poten&al, or demonstrate proof-‐of-‐concept.
Accelera&n
g Im
pact Project
Chris& Electris
2
Septem
ber 1
1, 2013
Today’s agenda • Introduc&on to crowdfunding. • Kickstarter and Indiegogo. • Examples and lessons. • Start planning your campaign: • Finding your fans, building momentum for the campaign. • Picking a project and a funding goal. • Developing your pitch, and planning for video, pictures, rewards.
• Crea&ng a successful crowdfunding campaign. • Outreach plans for pre-‐, during-‐, and post-‐campaign periods.
• Crowdfunded loan plaVorms – Kiva Zip and Community Sourced Capital. • How to obtain and catalyze start-‐up loans in your value chain.
Accelera&n
g Im
pact Project
Chris& Electris
3
Septem
ber 1
1, 2013
Discussion • Who knows about crowdfunding? • Do you feel like you understand what it is? • Have you heard about exci&ng projects on Kickstarter, Indiegogo, or Kiva Zip?
• Have you considered crowdfunding for your organiza&on?
Accelera&n
g Im
pact Project
Chris& Electris
4
Septem
ber 1
1, 2013
Crowdfunding (a.k.a. crowd funding, crowd Binancing, fan funding, peer funding)
• The use of small amounts of capital from a large number of individuals to finance a project or business (non-‐profit or for-‐profit).
• Makes use of the easy accessibility of vast networks of friends, family and colleagues through social media websites like Facebook, TwiKer and LinkedIn to get the word out about a new project and aKract funds.
• It’s about linking to your community, to your region, and to your value chain’s stakeholders to support your project in an engaging and fun way.
Accelera&n
g Im
pact Project
Chris& Electris
5
Septem
ber 1
1, 2013
How it can support value chains • A value chain may be missing a crucial piece of infrastructure or equipment. • A Central Appalachian Network grantee, Wild Ramp, helps their agricultural value chain come together through a year-‐round market for local agricultural goods. The market used crowdfunding to purchase necessary equipment to make the market possible.
• A par&cular business in the value chain may need some extra funds to start-‐up, or grow to their next stage. • Farmers needs beKer tools, or a food processor needs equipment to make value-‐added products.
• A new trucking service is needed to transport goods. • An exis&ng or new store front needs capital to sell more goods. • Need to prove a business concept or demand to unlock tradi&onal financing.
Accelera&n
g Im
pact Project
Chris& Electris
6
Septem
ber 1
1, 2013
Arroyo Food Co-‐op: Start-‐up community-‐owned market • Pasadena, CA • Arroyo Food Co-‐op is a local food coopera&ve run by member-‐volunteers, and will offer organic, sustainably and locally sourced products along with humanely raised meats, fair trade items, and non-‐GMO produce.
• Emphasis on suppor&ng a sustainable local economy and strengthening our community.
• hKp://www.indiegogo.com/projects/arroyo-‐food-‐co-‐op-‐a-‐homegrown-‐community-‐owned-‐market
Accelera&n
g Im
pact Project
Chris& Electris
7
Septem
ber 1
1, 2013
Accelera&n
g Im
pact Project
Chris& Electris
8
Septem
ber 1
1, 2013
Arroyo – Active $10,000+ Blexible funding campaign • Goal: $10,000. Raised over $6,000 so far. • Purpose: Exterior/interior upgrades of local grocery, inventory.
• Timeframe: 30 days. • Backers: 71. • Fans: Very ac&ve volunteers, Facebook page has over 1500 “likes”. Indiegogo page got over 600 “likes.”
• Creator gave many updates. • Needs : $10,000 pain&ng the store, $15,000 new ligh&ng, $30,000 upgraded equipment, $100,000 inventory!
• Rewards: $10 digital thank you, $20 bumper s&cker, $35 eco-‐tote, $50 t-‐shirt, $100 local coffee, $250 name carved on leaf in store, $500 cape and autographed books, $1000 dinner with locavore chef or local products basket.
• Ac;ons: Many updates on social media and Indiegogo site, new rewards added and energized campaign.
Accelera&n
g Im
pact Project
Chris& Electris
9
Septem
ber 1
1, 2013
Three types of US crowdfunding • Dona&ons/Reward • Interest-‐free loans • Equity (ownership shares)
Only the first two are available to non-‐wealthy donors/investors (98% of the popula&on) Video: hKp://vimeo.com/61212695
Accelera&n
g Im
pact Project
Chris& Electris
10
Un-‐regulated
• Dona;on
• Reward
• Pre-‐purchase
Regulated
• Equity Lending/Debt
Non-‐Accredited Investors
Accredited Investors
Septem
ber 1
1, 2013
Basic idea for all CF platforms • Project creators create a profile containing a compelling message that readers will be drawn towards, typically including some combina&on of: • Short video • Introduc&on to their project • Funding goal and needs • Deadline for campaign • Es&mated &meline for comple&ng project • List of rewards per dona&on • Images to elaborate • Updates to fans and funders.
Accelera&n
g Im
pact Project
Chris& Electris
11
Septem
ber 1
1, 2013
How most platforms work • Two basic funding models: • All-‐or-‐nothing: hit the goal, or receive no funding. • Flexible funding: if you don’t reach your goal, you can take what you raised (at a higher cost).
• You can exceed the goal with no penalty in either case. • Fees for using the plaKorm: • Percentage of earned money goes to plaVorm. • A fee for payment processing.
• In some cases, this is higher for nonprofits.
• Nonprofits: • Some plaVorms cater to nonprofits, giving discounts on fees and easy tax-‐deduc&ble dona&ons, i.e., Indiegogo.
• Others make no dis&nc&on on who is campaigning, i.e., Kickstarter.
Accelera&n
g Im
pact Project
Chris& Electris
12
Septem
ber 1
1, 2013
Comparing platforms
Accelera&n
g Im
pact Project
Chris& Electris
13
Septem
ber 1
1, 2013
Kickstarter Indiegogo Project Type Crea&ve projects, with an ever-‐
expanding defini&on. Crea&ve projects, causes, business ventures, entrepreneurs.
PlaKorm Fees
All or nothing campaigns: 5% fee if successful.
All or nothing op&on: 4% fee if successful.
Flexible funding campaign op&on – keep what you raise:
9% fee if goal not met.
Nonprofit Benefits?
No discount for nonprofits. Receive 25% discount on plaVorm fee. Dona&ons tax-‐deduc&ble. Only flexible funding campaigns.
Payment Processing
3-‐5% of dona&ons 3% of dona&ons for US campaigns
Comments Greatest name recogni&on, “cool” factor. Shows that you’re only going to do this project if campaign succeeds.
Growing popularity, as second largest plaVorm. Flexible campaign shows you’re going to do this work regardless.
Pros and Cons of Crowdfunding • Ability to reach large number of fans.
• Expand your fans & adver&se project / org.
• A way to gauge interest and support for a project.
• “Free money” • You can raise funds above your goal.
• If don’t hit your goal, you don’t owe any rewards (in all-‐or nothing campaigns).
• You keep 100% ownership of your work.
• If you don’t reach your goal, you get nothing (in all-‐or-‐nothing campaigns).
• If you fail, it may discourage fans and future funders.
• Money not really “free.” • It can be hard work to run a successful campaign.
• Rewards and fees can take a third of funds.
• Staff &me has been used, even if you fail.
• You must openly share your idea with the world.
Accelera&n
g Im
pact Project
Chris& Electris
14
Pros Cons
Septem
ber 1
1, 2013
Tool to support your value chain. • Exis&ng and needed businesses/projects within your value-‐chain can use crowdfunding to get start-‐up funds.
• Market-‐research – you can test buy-‐in from the community and poten&al customers before launching a new project.
• Opportunity to organize and step-‐up your outreach efforts to all stakeholders.
• Campaigning together can improve cohesiveness of your value chain.
• Growing support for one project is an opportunity to draw aKen&on to, adver&se, and even brand the en;re value chain.
Accelera&n
g Im
pact Project
Chris& Electris
15
Septem
ber 1
1, 2013
KICKSTARTER CAMPAIGN EXAMPLES
Accelera&n
g Im
pact Project
Chris& Electris
16
Septem
ber 1
1, 2013
FreshTruck – Mobile Farmers Market to address food deserts
• hKp://www.kickstarter.com/projects/1530126668/fresh-‐truck-‐mobile-‐farmers-‐market
Septem
ber 1
1, 2013
Accelera&n
g Im
pact Project
Chris& Electris
17
FreshTruck – Successful $30,000 campaign • Boston, MA. • Goal: $30,000. Raised $32,108. • Purpose: Purchase an eco-‐friendly school bus and retrofitng materials in order to launch Spring 2013.
• Timeframe: 50 days. • Backers: 316. • Fans: Over 1,360 “likes” on Facebook for KS page. Owner has over 900 Facebook friends.
• Needs: purchase an eco-‐friendly schoolbus that we have already iden&fied, as well as install all retrofitngs such as hardwood floors, foldout racks for produce, checkout counter, POS system, and exterior bus design.
• Ac;ons: More than 1700 people viewed the short link. Michael Pollan’s tweet drove over 700 people to the page.
Accelera&n
g Im
pact Project
Chris& Electris
18
Septem
ber 1
1, 2013
FreshTruck – Rewards • $1 thank you. • $5 digital thank you. • $25 tote bag. • $100 launch party. • $500 name inside bus. • $1,500 private dinner. • $5,000 name on outside of bus as sponsor for first year.
Accelera&n
g Im
pact Project
Chris& Electris
19
Septem
ber 1
1, 2013
Rose Mountain Butcher Shop–Flexible campaign earned $3,230
• Lansing, North Carolina, • Goal: $30,000. Raised $3,230. • Purpose: Equipment and renova&on for retail butcher shop.
• Timeframe: 42 days. • Backers: 23. • Fans: 92 “likes” on Indiegogo page, 256 “likes” for butcher shop.
• Needs: Walk-‐in freezer, meat saw, grinder/stuffer, a smoker and gas stove, for curing, small equipment, sinks, knives cutng boards and ingredients.
• The perks: $25 bumper s&cker designed specifically for donors; $100 T-‐shirts available only to donors; $1000 sausage named for you; $2,000 All of the above perks and online coupon.
Accelera&n
g Im
pact Project
Chris& Electris
20
Septem
ber 1
1, 2013
hKp://www.indiegogo.com/projects/rose-‐mountain-‐butcher-‐shoppe
Create Innovation Economy Opportunities in WV
hKp://www.indiegogo.com/projects/create-‐innova&on-‐economy-‐opportuni&es-‐in-‐wv
• Richwood, WV • Goal: $15,000. Raised $1,295 so far. • Purpose: Spark job crea&on in Appalachia by suppor&ng Create WV's effort to train and model innova&on, including building a solar energy
• Timeframe: 6 weeks (42 days) – 17 days to go! • Backers: 24 so far. • Needs: Innova&ve permanent solar panel “forest;” crea&ve community and innova&on economy development training; ar&sts/entrepreneur village experience; crowd-‐funding award grants for a statewide startup and social entrepreneurship innova&on contest
• Rewards: Create WV and conference-‐related items to share as a "thank you" for your support, including themed car magnets, t-‐shirts and even access to the Create WV 2013 conference
• West Virginia Community Development Hub Inc.
Accelera&n
g Im
pact Project
Chris& Electris
21
Septem
ber 1
1, 2013
Hoop house for year round harvest at Hand Picked Farm
hKp://www.kickstarter.com/projects/1205940715/hoop-‐house-‐for-‐year-‐round-‐harvest-‐at-‐hand-‐picked-‐f?ref=card
• Flemington, NJ • Goal: $1,000. Raised $1,610. • Purpose: Build hoop house to extend growing season and provide community with organic vegetables year-‐round.
• Timeframe: 14 days. • Backers: 314. • Needs: $1,000 covers all of the material to construct a 15'x65' hoop house, irrigate it using water-‐saving drip irriga&on, and cover all of the fuel cost for driving around getng all of this.
• Rewards: all small values, with crea&ve text, and varia&ons of visits and produce from the farm
Accelera&n
g Im
pact Project
Chris& Electris
22
Septem
ber 1
1, 2013
Sustainable ag projects • Kickstarter has become a boon for sustainable agriculture entrepreneurs, raising $15.81 million in funding for 1,334 food projects.
• Sustainable agriculture projects generally fall into Kickstarter’s food category, which is one of the smaller ones, making up only 3% of all projects.
• Study categorized food Kickstarter projects, and found largest category was value-‐added products, and made up a third of successful projects. • Subjects that sprang up more ozen than seemed logical were cupcakes, ice-‐cream, and bee keeping.
• Farming projects ozen have a community or educa&onal component (giving back in some way), or produce a product like cured meats or honey.
Accelera&n
g Im
pact Project
Chris& Electris
23
Septem
ber 1
1, 2013
Successful examples • Farm CSA Moving from VT to Maryland ($10k goal, raised $14,510). • Raise the Barn educa&onal farm expansion ($75k goal, raised $86k). • Automated milking system for raw milk goat dairy (raised $2,625). • Aging room to cure meat on PA farm. ($25k goal, raised $48,003). • Know thy food local organic market (goal $25,000, raised $30,854). • Food Hub -‐ farmers aggrega&ng product to take to market ($3,500 Flexible Funding)
• “Organic To-‐Go” vegan pop-‐up in Appalachia ($8,000, raised $8,370).
• Honey Farm bee yard expansion ($1,800 goal, raised $3,102). • Williams Community Forest Project ($9,951 Flexible Funding) • Appalachia ginseng documentary ($2,000 goal, raised $2,180). • Biofuel for everyone ($2,000 goal, raised $7,294). • Building wind turbines for a school ($600 Flexible Funding).
Accelera&n
g Im
pact Project
Chris& Electris
24
Septem
ber 1
1, 2013
Keys to success
• Specific project defined.
• Strong pitch (video, images, links to your other pages).
• Offer three to seven perks.
• Achievable funding goal.
• Outreach to fan base prior to launch.
• Gecng the media to cover it.
• Sustained outreach throughout campaign.
• Campaign for shorter periods to create urgency.
Accelera&n
g Im
pact Project
Chris& Electris
25
Septem
ber 1
1, 2013
Statistics of success • 44% of all Kickstarter projects launched have succeeded. • That means that 56% have failed. • General rule of thumb: smaller projects are more successful than larger ones.
• Two thirds of successful campaigns were in the $1,000-‐$10,000 range. • 54% of successful food category campaigns were in this range.
• The sweet spot for food projects was around $5,000 to $15,000. • Nearly 16% of successful food campaigns were $20,000-‐$100,000.
• Research similar campaigns before launching yours. hKp://www.kickstarter.com/help/stats
Accelera&n
g Im
pact Project
Chris& Electris
26
Septem
ber 1
1, 2013
Need strong following before launching • Crowdfunding is a way of organizing your tribe of followers, not a way to build a following.
• A decent set of Facebook friends is a prerequisite to a successful campaign.
• With food projects, failed Kickstarter campaigns have an average of 385 Facebook friends, compared to 427 for successful ones.
• Start connec?ng with your stakeholders early and o@en. Accelera&n
g Im
pact Project
Chris& Electris
27
Septem
ber 1
1, 2013
START PLANNING YOUR CROWDFUNDING CAMPAIGN
1. Define your project. 2. Set your funding goal. 3. Who are your fans, where are they?
Accelera&n
g Im
pact Project
Chris& Electris
28
Septem
ber 1
1, 2013
1. DeBining your project • Every campaign should be a project. • Must be a focused and well-‐defined project with a clear beginning and end.
• Only finite projects are allowed on Kickstarter. • Precisely defined goal establishes the scope of the project for the creator.
• Allows poten&al backers to judge how realis&c the project’s goals are and the creator’s ability to complete them.
• Consider the needs of an exis?ng business or missing link in your value chain.
Accelera&n
g Im
pact Project
Chris& Electris
29
Septem
ber 1
1, 2013
2. Setting your goal & deadline • Research your budget • Amount you need to achieve project? How much through crowdfunding?
• Factor in cost of producing and delivering rewards. • Be as transparent as possible.
• Set goal as amount you need to complete project as promised. • Set project deadline. • Projects las&ng 30 days or less have our highest success rates.
• Consider your network • How much momentum do you think you can gain from your audience, friends/family, broader social networks and strangers on the web?
Accelera&n
g Im
pact Project
Chris& Electris
30
Septem
ber 1
1, 2013
3. Building your fan base • Important to have a strong following before launching the campaign.
• Draw upon those fans for early support and for spreading the word of your campaign to their networks.
• Loca&on: urban outreach maKers. • One Kickstarter-‐wide study noted that successful projects were clustered around tradi&onal crea&ve hubs, such as New York and Los Angeles
• Food projects likely follow the same paKern, with the top 5 ci&es – New York, Los Angeles, San Francisco, Portland, Detroit – corresponding with sustainable agriculture hubs around the country.
Accelera&n
g Im
pact Project
Chris& Electris
31
Septem
ber 1
1, 2013
Small group exercise: Three questions 1. Define your project:
Should create a new tangible good/service. The more specific the beKer.
2. Set your funding goal: What’s the minimum required to get the project off the ground? What’s achievable with your network?
3. Who are your fans, where are they? In your town or spread out na&onally? Groups in your value chain or community of prac&ce that can support your campaign?
Accelera&n
g Im
pact Project
Chris& Electris
32
Septem
ber 1
1, 2013
GROUPS REPORT BACK
Accelera&n
g Im
pact Project
Chris& Electris
33
Septem
ber 1
1, 2013
HOW TO BUILD YOUR CAMPAIGN
Crazing your Crowdfunding Pitch and Rewards
Accelera&n
g Im
pact Project
Chris& Electris
34
Septem
ber 1
1, 2013
The Pitch: Title, Image, Description • Title should be simple, specific, memorable (60 characters). • Focus on &tle of specific project. • Avoid words like “help,” “support,” or “fund.”
• Project image • Will be used to represent your project on Kickstarter and web.
• Looks nice and accurately reflects project. • Short blurb (135 characters) • Appears in your project’s widget. • Quickly communicate your project idea. • Stay focused and clear on project aims.
Accelera&n
g Im
pact Project
Chris& Electris
35
Septem
ber 1
1, 2013
Tips on your pitch • Funding goal: Be conserva&ve and realis&c. • Funding dura;on: think about right campaign length to create urgency and viral .
• Your “story” and rewards should be limited, simple and clear.
• A reward’s language, value, es&mated delivery and interna&onal shipping fees are unchangeable once a reward is selected.
• Be social, and show the value you’re providing. • Talk to people about your product, both online and in person. • Poten&al backers won’t trust the product unless they trust the person selling the product first.
Accelera&n
g Im
pact Project
Chris& Electris
36
Septem
ber 1
1, 2013
A video is important to success • Video is the best way for a poten;al backer get a feel for the emo;ons, mo;va;ons, and character of a project.
• Videos demonstrate effort; are a good predictor of success. • Projects with videos succeed at a much higher rate than those without (50% vs. 30%).
• Most videos are just someone telling their story straight into the camera. Crea&vity counts, but is not necessary.
• Keep it short! 3 minutes or less. • Don't be afraid to put your face in front of the camera and let people see who they’re giving money to.
Accelera&n
g Im
pact Project
Chris& Electris
37
Septem
ber 1
1, 2013
What to include in your video • Who you are. • The story behind your project. Where'd you get the idea? What stage is it at now? How are you feeling about it?
• Come out and ask for people's support, explaining why you need it and what you'll do with their money.
• Talk about your great rewards, using any images you can. • Explain what happens if you don't reach your goal (you'll get nothing, and everyone will be disappointed in All-‐or-‐Nothing campaigns, etc.)
• Thank everyone!
• Note: Do not include copyrighted music or other material.
Accelera&n
g Im
pact Project
Chris& Electris
38
Septem
ber 1
1, 2013
Rewards – What to offer • Amount, descrip&on, limits, est. delivery date, shipping details. • Primary rewards should be things made by the project itself. • Rewards for higher dona&on levels increase in value, and ozen include combine rewards from lower dona&on levels.
• Four common reward types: • Copies of what you’re making: a print from the show, product from the farm/factory, CSA membership.
• Crea?ve collabora?ons: a backer appears in the film, everyone gets painted into the mural.
• Crea?ve experiences: a phone call from the author, tour of the creamery, dinner for a group of friends on the farm.
• Crea?ve mementos: limited edi&on promo&onal materials, Polaroids sent from loca&on, thanks in the credits.
Accelera&n
g Im
pact Project
Chris& Electris
39
Septem
ber 1
1, 2013
How to price rewards • Price fairly, offer value. • Manufactured items should be priced what they would cost in a retail environment.
• Actual value considers more than just s&cker price. If it’s a limited edi&on or a one-‐of-‐a-‐kind experience, there’s a lot of flexibility based on your audience.
• Prepare 3 to 6 reward levels to start with. • Small reward levels are important to the campaign success: • Projects without a reward of $20 or less succeed 28% of the &me. • Projects with a reward of $20 or less succeed 45% of the &me.
• Most popular KS pledge is $25. Average is $70. • Something fun for $10 or less is always a good idea.
• Budget any shipping costs and hidden costs (like packaging or &me spent) into the reward price.
Accelera&n
g Im
pact Project
Chris& Electris
40
Septem
ber 1
1, 2013
Prohibited approaches Kickstarter has the following rules: • May not give rewards not directly produced by the creator or the project itself.
• No financial incen&ves, coupons, discounts, or cash-‐value giz cards.
• Cannot raise money for causes. • Cannot sell equity or solicit loans. • Cannot buy real estate. • Cannot promise to donate a por&on of funds raised or future revenue to a cause.
Accelera&n
g Im
pact Project
Chris& Electris
41
Septem
ber 1
1, 2013
Building your campaign • Small Group Discussion: • The pitch: &tle, descrip&on, image, video. • Define rewards.
• Revisit your original plan if needed.
Accelera&n
g Im
pact Project
Chris& Electris
42
Septem
ber 1
1, 2013
GROUPS REPORT BACK
The pitch: &tle, descrip&on, image, video. Define rewards.
Accelera&n
g Im
pact Project
Chris& Electris
43
Septem
ber 1
1, 2013
CREATING A SUCCESSFUL CAMPAIGN Pre-‐, During, and Post-‐Campaign and Ac&ons
Accelera&n
g Im
pact Project
Chris& Electris
44
Septem
ber 1
1, 2013
Crowdfunding is built on digital communications • Get prepared before you start campaign. • Create email lists. • Constant Contact or Ver&cal Response.
• Build your social media presence. • Facebook, TwiKer, Google+, LinkedIn. • Use aggregators like Hootsuite and Tweetdeck to simplify your life.
Accelera&n
g Im
pact Project
Chris& Electris
45
Septem
ber 1
1, 2013
How to build momentum • Finding your “tribe” and connect with them. • Local community members. • People that have lez the community but want to stay connected. • People with an interest in the type of project you will launch. • Find online communi&es, bloggers, etc., who would be suppor&ve of your work and engage them to build your fan base.
• Reach out to poten&al funders and promoters to spread the word using social media and your prepared email lists.
• Connect in person with your community. Accelera&n
g Im
pact Project
Chris& Electris
46
Septem
ber 1
1, 2013
Projects that raise the most start with 1st and 2nd degree contacts, and build momentum into 3rd.
Accelera&n
g Im
pact Project
Chris& Electris
47
Septem
ber 1
1, 2013
Source: Rockethub.com
Outreach steps Before and During Campaign Launch: • Ac&vate your network of friends and give them a sense of ownership. Engage them well ahead of launch. • Ask for (and listen to) friends’ advice. • Offer them sneak peaks no one else gets. • Throw a party to build excitement and momentum.
• Create a media list and target it efficiently (blogs, local news). • Gather a group of most loyal supporters to contribute immediately upon launching campaign.
• Prepare outreach emails ahead of &me, ready for launch day. • Preschedule to go out on launch day. • Segment friends to ensure appropriate messaging. • Ask friends to support and share your campaign.
Accelera&n
g Im
pact Project
Chris& Electris
48
Septem
ber 1
1, 2013
Project Updates During/After During: • Project updates serve as your project’s blog. • An update can be public for all to see, or it can be private for only your backers.
• When campaign is live, keep backers informed and inspired to help you spread the word.
• Celebrate success, including reviews, press, and photos, with everyone involved.
Aher: • Take &me to say “Thank You” to your funders. • Once funded, share the progress of your project with the backers. You can even ask for feedback.
• You have a chance to keep these funders as your loyal customers.
Accelera&n
g Im
pact Project
Chris& Electris
49
Septem
ber 1
1, 2013
Next Steps • Decide whether crowdfunding is right for your funding goals. • Which plaVorm to use? Kickstarter vs. Indiegogo? Others? • Gather missing pieces. • The average successfully funded creator spends nearly two weeks tweaking their project before launching.
• Check out other projects to get ideas for your campaign. • Develop full text and media to go with pitch. • A thoughVul and methodical approach can pay off.
• Finalize your campaign and launch! • Then start sharing your campaign with friends and family. • Get feedback and assistance if needed.
Accelera&n
g Im
pact Project
Chris& Electris
50
Septem
ber 1
1, 2013
CROWDFUNDING LOANS
0% interest loans through Kiva Zip and Community Sourced Capital
Accelera&n
g Im
pact Project
Chris& Electris
51
Septem
ber 1
1, 2013
Crowdfunded loan products • 0% interest loan product. • Funded en&rely via online crowdfunding $25 per person. • Trustee-‐backed.
• 0% interest loan product. • CSC sells squares for $50, up to 5 per customer. • CSC support.
Accelera&n
g Im
pact Project
Chris& Electris
52
Septem
ber 1
1, 2013
Community Sourced Capital Squareholders fund 0% loans • Businesses chosen with at least a year of proven revenue in their books can apply. • Must have strong communi&es willing to fund the project. CSC helps deepen those rela&onships.
• Look at Profit and Loss statements, balance sheet, and indicators of social capital and community involvement.
• Minimum and maximum loan amounts chosen. • Payback as percentage of revenues. • CSC charges flat fees to businesses for services. • $250 to be listed, and if funded, $100/month during repayment.
• CSC provide support in developing your pitch, managing your Squareholders.
• Squares purchased to support a specific business with capital, not to make money from an investment.
• Currently expanding outside WA state area. • Planning to develop larger loans, pre-‐payment model, and investment returns in the future.
Accelera&n
g Im
pact Project
Chris& Electris
53
Septem
ber 1
1, 2013
Accelera&n
g Im
pact Project
Chris& Electris
54
Septem
ber 1
1, 2013
hKp://www.communitysourcedcapital.com/adriz/
– Reinventing small business borrowing
• 0% interest loans to small businesses not otherwise qualified for conven;onal loans. • Roughly 80% of 27 million small businesses using credit cards to provide working capital.
• Designed specifically for financially excluded, socially impacVul entrepreneurs who need small starter loans up to $5,000.
• Subsequent loan size can increase up to $50,000 based on repayment. • Character-‐based lending approach. • 3 months to raise funds -‐ must raise full amount requested – no par&al funding.
• Lower cost of lending through using PayPal. • Directly connects borrowers with a ready community of lenders who they can turn into fans and advocates.
• Partnering with groups like Etsy, Zaarly, Michigan Corps, others.
Accelera&n
g Im
pact Project
Chris& Electris
55
Septem
ber 1
1, 2013
How it works: Victor in SF
Accelera&n
g Im
pact Project
Chris& Electris
56
Septem
ber 1
1, 2013
Character-‐based lending with three levels of participation • Trustee – vets the business and vouches for the borrower • Organiza&ons or individuals sign up online as a Trustee and complete online Trustee Profile (one &me form).
• Iden&fy eligible and deserving borrowers for 0% interest loan and work closely with small entrepreneurs.
• No financial risk if the endorsed borrower does not pay, but their own reputa&on is &ed to the borrowers’ performance.
• Borrower – individual or small business • Complete online applica&on provided azer Trustee endorsement.
• Lender – Kiva members, ozen lending in $25 increments • No interest earned. All money goes to the borrower.
Accelera&n
g Im
pact Project
Chris& Electris
57
Septem
ber 1
1, 2013
Kickstarter vs. Kiva Zip
Accelera&n
g Im
pact Project
Chris& Electris
58
Septem
ber 1
1, 2013
Kickstarter/Indiegogo Kiva Zip Must be a project that has an end result. KS cannot be used for causes such as tui&on, or charity.
Must be an exis&ng or new business with a business plan.
Anyone can put up a page as long as it meets the qualifica&ons of crowdfunding plaVorm.
Must be low or moderate income individual. Borrowers must be veKed by Kiva Zip Trustee.
Successful campaigns 4-‐6 weeks. All campaigns 3 months long.
Don’t have to pay back funds.
Have 10 – 24 months to pay back loan. Must pay back the money.
5% of funds collected are paid to KICKSTARTER, and 3-‐5% fees to payment processor.
0% interest and no fees collected by site. No collateral required – only your reputa&on is on the line.
Must offer rewards to contributors. No rewards for contributors.
No updates required, but desired. Updates important part of plaVorm.
Crowdfunding for value chains Next steps: • Evaluate what gaps in your value chain might be appropriate for crowdfunding dona&ons or loans.
• Consider your needs and audience and pick a plaVorm. • Get assistance and feedback from others to develop and launch.
If there’s enough interest, we would be happy to work with value chains to find/provide more assistance to get your projects going.
Contact Info: Chris& Electris Accelera&ng Impact Project Tellus Ins&tute [email protected]
Accelera&n
g Im
pact Project
Chris& Electris
59
Septem
ber 1
1, 2013
Additional successful examples • Raise the Barn educa&onal farm expansion (goal $75k, raised $86,531).
hKp://www.kickstarter.com/projects/1753949925/raise-‐the-‐barn?ref=category • Automated milking system for raw milk goat dairy ($2,625).
hKp://www.kickstarter.com/projects/1490431691/automated-‐milking-‐system-‐for-‐raw-‐milk-‐goat-‐dairy • Aging room to cure meat on PA farm. ($25k goal, raised $48,003).
hKp://www.kickstarter.com/projects/847634712/north-‐mountain-‐pastures?ref=category • Know thy food local organic market (goal $25,000, raised $30,854).
hKp://www.kickstarter.com/projects/knowthyfood/know-‐thy-‐food-‐lets-‐open-‐a-‐local-‐and-‐organic-‐food-‐m • Biofuel for everyone ($2,000 goal, raised $7,294).
hKp://www.kickstarter.com/projects/1579413688/biofuel-‐for-‐everyone • Homestead Honey Farm bee yard expansion ($1,800 goal, raised $3,102).
hKp://www.kickstarter.com/projects/1314442579/homestead-‐honey-‐farm-‐apiary-‐expansion-‐and-‐honey-‐st • Appalachia documentary about ginseng ($2,000 goal, raised $2,180).
hKp://www.kickstarter.com/projects/manman/roots-‐and-‐hollers-‐a-‐ginseng-‐documentary • Food Forest project on Reserva&on (mul&ple successful campaigns)
2011 hKp://www.kickstarter.com/projects/olceri/pine-‐ridge-‐food-‐forest-‐growing-‐food-‐security-‐on-‐th?ref=search 2012 hKp://www.kickstarter.com/projects/892430421/pine-‐ridge-‐reserva&on-‐food-‐forest-‐2012-‐0?ref=search
• “Organic To-‐Go” Vegan pop-‐up in Appalachia ($8,000, raised $8,370) hKp://www.kickstarter.com/projects/37593464/organic-‐to-‐go-‐a-‐vegan-‐pop-‐up-‐in-‐appalachia?ref=search
• Food Hub – local farmers aggrega&ng product to take to market hKp://www.indiegogo.com/projects/north-‐sound-‐food-‐hub-‐at-‐bow-‐hill/x/3387102
• Williams Community Forest Project ($9,951 Flexible Funding) hKp://www.indiegogo.com/projects/willams-‐community-‐forest-‐project/x/3387102
• Victoria Farm ($7,255 Flexible Funding) hKp://www.indiegogo.com/projects/victoria-‐farm/x/3387102
• Building wind turbines for a school ($600 Flexible Funding) hKp://www.indiegogo.com/projects/crea&ng-‐renewable-‐energy-‐for-‐high-‐schools/x/3387102
Accelera&n
g Im
pact Project
Chris& Electris
60
Septem
ber 1
1, 2013
Related Documents
