CrowdFunding_Group25_SMM

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Crowd fundingGroup 25

Chandana Munipalle www.chandanamunipalle.com

Harsh Kanchan www.harshkanchan.com

Manmeet Ahluwalia (FT13239 )www.msmanmeet.com

Harish Krishnan (FT13134 ) www.harishkrishnan.info

Jonaki Basu (FT13226)www.jonakibasu.com

What is Crowd funding

Collective effort of individuals who network and pool their money to support efforts initiated by other people or organizations

Used to support various activities like, disaster relief, citizen journalism, support of artists by fans, start-up company funding, scientific research etc

Can be viewed as an alternative method to raising finance for a business, project or idea

Crowd funding platforms

More than 450 crowd funding platforms like kickstarter, IndieGoGo, Mobcaster, crowdtilt etc.

The platforms create organizational systems and conditions for resource integration among all the players

Most platforms don’t charge for publishing a pitch

Some might take a 5% commission if you reach your target investment. If you don’t reach your target, you don’t need to pay a penny!

Classification of platforms

Classification of platforms based on the type of return people get

Platforms in brief

Reward based platform: People make donations to projects with the expectation of a reward, both material (product pre-order) or intangible (mention on the website)

2/3rd of all platforms are of this type.

Equity based platform: Project initiators and partner platforms define a time period and target amount. The target is then divided and offered via the platform as equity shares at fixed prices

After the target is reached investment phase begins.

Microfinance:

Micro lending is provision of financial services to low-income clients, who lack access to banking and related services. Money gathered is managed by a local intermediary. Kiva follows this popular model.

Peer-to-peer lending and borrowing occurs directly between individuals. No intermediation of any financial institution. Example: Zopa, LendingClub etc.

QUICK GLANCE - KICKSTARTER

70,000 projects created

$373,000,000 raised in funding

$333,000,000 raised for successful campaigns

$40,000,000 returned back to donors

44% of all projects successfully funded

KICKSTARTER STATISTICS

How it works?

1. Artist/activist lists the idea on Kickstarter.

4. Project owner sets rewards for various levels of contributions

3. Once Kickstarter approves the project, the

owner must set a funding target and time-

line

2. Project has a defined goal and fits into one of the 15 categories

5. Showcase your project to donors by creating a video or slide-show

7. Update your funders on a regular basis about your progress

6. Enter the crowd funding community

8. Funds will be released when target is met.

KivaAn online platform which allows people to lend money via the Internet to people in developing countries through its

partner microfinance institutions

MFI lends money

Microfinance Institution

View person profile on

Kiva.org and lend

Social Investor

Kiva allows MFI partners to raise capital at 0% from individual

investors across the globe. An astounding 99% repayment rate

Kiva moves money

• Lenders choose a person to lend to based on his profile

• An MFI gets the money from Kiva at 0%

• The MFI lends the money to borrower at 30%

• The borrower repays the MFI

• The MFI repays Kiva• Kiva repays the

lenders

Who are Kiva Lenders?Kiva is connecting everyday individuals to the microfinance industry

Kiva Lenders

• 500,000 lenders majorly from US. Average amount loaned: $120• 100+ countries across the world •50% of Kiva lenders are above 40

• Only 9% of Kiva Lenders consider themselves as being “very knowledgeable” about microfinance. Hence it is easy to lend

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What is Kiva?Kiva is a significant new source of loan capital for MFI partners

Total Loan Capital Raised on Kiva to DateKey Stats• Size: Provided MFIs with over $95M+ in new loan capital

since launch.• Growth: $1M loans / 5K new lenders every week.• User satisfaction: <10% of repaid loans withdrawn.• Brand awareness: > 40K visit per day/ +100M brand

impressions/ lenders from over 150 countries.

Kiva allows MFI partners to

raise 0% capital from

individual lenders across the

globe.

What makes Kiva work?

Need exists everywhere Millions of small business in the world cannot access funding Small businesses create growth in economy and provide

livelihood for many people

Kiva’s mission is to be a truly global company: people from any part of the world can participate

Can have a larger impact than just providing capital for MFIs: Increase awareness about microfinance & need

Source of referral for MFIs for potential clients

Growth of industry thanks to low cost capital

.

Rang De is a pioneering, web-based social

initiative with a mission to provide cost effective

microcredit to low income households in India.

Through an online micro lending platform called

RangDe.Org, Rang De enables individuals to

participate in microcredit by lending as little as

Rs. 100.

Rang De is a registered non-profit trust and is

head quartered at Chennai. The organization is

funded and supported by the CSO Partners and

ICICI Foundation.

Rang De

VISION

To 'Make Poverty History in India'

VISION

To 'Make Poverty History in India'

MISSION

To enable individuals in India and the world to connect

with low income households by participating in

microcredit in a holistic and sustainable manner through

an online platform that is transparent and

accountable.

MISSION

To enable individuals in India and the world to connect

with low income households by participating in

microcredit in a holistic and sustainable manner through

an online platform that is transparent and

accountable.

How Rang De Works

RangDe.Org partners with MFIs & NGOs to identify borrowers.

The partner organization posts the profile of the borrowers on the website.

Any investor can access online the profiles of the borrowers for the required

loan.

The investor can pay either a part or the entire loan amount to the borrower.

When the entire loan amount is raised, the partner receives the money and

disburses it to the borrower.

Raising Capital

Individual social Investments

Any individual can lend as little as Rs.100

by simply registering online and choosing

a borrower of his/her choice.

Corporate social investments

A corporate can participate by allocating a

budget from their CSR funds. The funds

will be deployed as loans to micro-

entrepreneurs.

Rang De Partners

Rang De partners are grass root level non-profit organisations (NPOs) and Microfinance Institutions (MFIs), having strong presence in the community.

The partners are taken on board after a thorough due diligence process.

Due diligence process involves review of financial and other records followed by a field visit by Rang De staff.

Rang De partners act as disbursement and collection agents and cannot levy charges other than prescribed by Rang De and agreed as per the agreement.

Currently, Rang De has 18 Field Partners with operations in 10 states.

Rang De Loans

Loans for Businesses

These loans are facilitated at a rate of 8.5% flat.

Loans are for income generation activities.

Around 150 different activities funded so far.

Micro Enterprise Loans

These loans will be facilitated at a rate of 10% flat.

Loans will be facilitated for small businesses.

Loan size in excess of Rs.25,000

Partner : 5%

Social Investor : 2%

Rang De : 1%

Contingency Fund : 0.5%

Contingency Fund : 1%

Rang De : 2%

Partner : 3%

Social Investor : 4%

Rang De Loans

Loans for Primary & Secondary Education

Loans are facilitated at a rate of 5% flat.

Loans are facilitated to fund school fees, stationery, uniform and other expenses.

Loans are facilitated in the form of Education Vouchers.

Schools accept education vouchers in lieu of fees, uniforms and other expenses.

Loans for Job Guaranteed Vocational Education

Loans are facilitated at a rate of 8.5% flat.

Loans are provided to unemployed youth from rural India.

Training and placement is provided by our strategic partner.

Partner : 4%

Social Investor : 0%

Rang De : 1%

Contingency Fund : 0%

Partner : 5%

Social Investor : 2%

Rang De : 1%

Contingency Fund : 0.5%

Rang De- Latest Statistics

Borrowers Impacted 10,127

Social Investors 2,906

Corporate Social Investors 9

Loans raised Rs. 5,38,67,100

Loans repaid Rs. 3,37,88,672

As on 6rh September 2011

1997- The idea of crowd funding began in music industry when American Fans underwrote an entire US tour of British group Marillion. They raised $60,000 through a Donation driven internet campaign.

2004- French Film ‘Demain la Veille’ raised $50,000 in 3 weeks through crwodfunding.

2006- The term crowdfunding was coined by Michael Sullivan. He states ‘ Many things Are important but funding from the crowd is the base of which all else depends onand is built on.

2012- Compnay’s like Kickstarter averages 1.1Million visitors per month majority of which are below the age of 40.

Facts and future outlook

Age % of Visitors

0-17 1%

18-24 8%

25-34 27%

35-44 35%

45-54 16%

55-64 10%

64+ 2%

Facts and future outlook

Facts and future outlook

Help for Small Business

Small business in US generate 65% of net jobs, yet they are always in desperate need ofMoney.

Without accredited investors, bank loans are the only option but post 2008 there has beena sharp decline in loans being approved.

These small business are 99.7% self owned, pay 44% of total US private payroll and hire 43% of hi-tech workers.

Funding- 1% of US population is represented by accredited investors and VC’s which demand huge fees and reject 95% of the business plans.

Angel investors, friends and family do provide help and support but figures are vague.

Crowdfunding can thus provide better access to capital for small business and entrepreneurs.

It erases the barriers that VC’s and accredited investors impose.

Serves as a free marketing tool to expose your idea to thousands of users.

Provides support and consulting to promote their project.

Thank You