"Crowdfunding: market research, pre-sales and fundraising" - Extreme Innovations

CROWD FUNDING

ABOUT EXTREME

Since 2014, we have created several brands; two in the crowd-funding space

CrowdMatrix - Angel Investing Portal

• Online, secure platform which connects technology startups with savvy and accredited investors

• A full-featured multi-role, multi-permission, audited, secure portal

CrowdFind - Analytics for Crowdfunding

• An analytics platform tracking tens of thousands of crowd-funding campaigns daily

• Tens of thousands of projects cataloged daily; millions of data points

What is Crowd Funding?

Enthusiasts and early adopters buy your product before it’s in the market place or even produced.

Investors buy shares in your company in exchange for cash.

Enthusiasts and early adopters buy your product before it’s in the market place or even produced.

Investors buy shares in your company in exchange for cash.

Creditors lend money to you or your company

Enthusiasts and early adopters buy your product before it’s in the market place or even produced.

Investors buy shares in your company in exchange for cash.

Creditors lend money to you or your company

Donors contribute to your cause

Enthusiasts and early adopters buy your product before it’s in the market place or even produced.

https://www.kickstarter.com/year/2014/datahttp://insights.wired.com/profiles/blogs/crowdfunding-statistics-analytics-for-film-video-in-2014#axzz3VP62VFYD

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https://angel.co/2014/investing

$529MM pledged towards 22,252 projects in 2014

https://www.kickstarter.com/year/2014/datahttp://insights.wired.com/profiles/blogs/crowdfunding-statistics-analytics-for-film-video-in-2014#axzz3VP62VFYD

C D

https://angel.co/2014/investing

$529MM pledged towards 22,252 projects in 2014

Just under $100MM in US only

https://www.kickstarter.com/year/2014/datahttp://insights.wired.com/profiles/blogs/crowdfunding-statistics-analytics-for-film-video-in-2014#axzz3VP62VFYD

C D

https://angel.co/2014/investing

$529MM pledged towards 22,252 projects in 2014

Just under $100MM in US only

https://www.kickstarter.com/year/2014/datahttp://insights.wired.com/profiles/blogs/crowdfunding-statistics-analytics-for-film-video-in-2014#axzz3VP62VFYD

Over $100MM raised by 243 startups from 2,673 investors

On average that is:

$400k per startup

$40k per investor

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https://angel.co/2014/investing

How To Leverage Crowd Funding

Market Research

Anonabox Router - 2014

Raised $600,000 in only 5 day

Shows the latent unmet demand in the market place for an anonymity and privacy online

Despite being banned by Kickstarter due to technical issues, this campaign’s engagement with potential clients is a clear indication for a market opportunity in this field.

Drones Drones Drones

5 drone projects raised over $5.6MM

Drones Drones Drones

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Pre Selling

Pre-sell

Don’t set up manufacturing facilities before you have sold…

Don’t hire a development team before you have sold…

Don’t buy raw material before you have sold…

…the to-be finished product to paying customers.

v

Pebble Watch

In 2012, a Waterloo startup sold a

record-breaking $10MM on Kickstarter,

making crowd funding a popular

concept.

In 2015, Pebble Watch, raised the same amount in just over a day!

Financing

Traditional

Traditional

• Friends & Family

Most startups fail…

do you really want to risk your loved ones’ savings?

Traditional

• Friends & Family

Most startups fail…

do you really want to risk your loved ones’ savings?

• Angels, VCs, Private Equity, hedgefunds, etc etc

Access to capital can be very challenging early on

Accredited Angels Investors

• Individuals with financial assets over $1MM

• net worth over $5MM

• or income of over $200,000 per year ($300,000 combined with spouse)

• A wave of online tools are making it easier to connect with this kind of investor

Accredited Angels Investors

• Individuals with financial assets over $1MM

• net worth over $5MM

• or income of over $200,000 per year ($300,000 combined with spouse)

• A wave of online tools are making it easier to connect with this kind of investor

True Crowd Funding

• Pending regulatory approvals in most jurisdictions

• Proposed regulation in Ontario

• Startups can only raise up to $1.5M in any 12 month period

• Individuals may only invest up to $2,500/deal, capped at $10,000 per year

Equity Crowdfunding

Even a small fraction of a percentage would make billions of dollars available for startups…

… dwarfing the current Venture Capital investments in Canada ($1.9bn in 2014)

0.2% $13 bn

$6.4 Trillion

$32 bn

$64 bn

0.5%

1.0%

Canadian HouseholdNet Worth

Shift toinvestment

crowdfinance

Bringing It All Together

Crowd funded its seed round in 2013 on OurCrowd, raising $375,000.

Launched product on Kickstarter selling over $2.7MM in 2014.

Follow-on equity financing on OurCrowd in 2014, raised over 3.3MM within two weeks.

In summary…

• Take advantage of crowd funding…

• To identify and validate a market need, and…

• To make money selling before you spend money making, and…

• To find investors and investments which will super-charge your business.

VCs leverage crowd funding campaigns to make investment decisions

THANK YOUSahand Sojoodi

[email protected]

@ExtremeInnovate