crowdfunding trieste april 2016 - units.it › ... › content › 1 ›...
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The bright side
https://www.kickstarter.com/projects/olo3d/olo-the-first-ever-smartphone-3d-printer/description
What crowdfunding is
Crowdfunding is the practice of funding a project or a venture by raising monetary contributions from a large number of people, typically via the internet in order to make the project (or the venture) succeed
What crowdfunding is not
• Philantropy 2.0
• A form of revenues
• The magic solution for the «funding/equity gap»
• A selling tool
• A trend
The pillars of crowdfunding
Community
Emotion
Trust
Money
... and Web
The aim of a crowdfunding campaign is to generate a particular type of
reaction from the audience
Backers invest in equity shares of innovative start-up.
Backers fund the projects and receive rewards
Backers donate some money for the NGO’s activities
Backers borrow an amount of money and receive some
interests
Crowdfunding Platform
Campaigns focused on start-up growthpotential
Campaigns focused on the project outcomes
Campaigns focused on NGO’s activities and mission
Campaigns focused on the request for a loan
DemandEQUITY
REWARD
DONATION
LANDING
OfferCrowdfunding Models
Equity vs. RewardFunding the equity gap of an innovative start-up (high risk)
Funding the organic growth of the start-up (market growth, product portfolio , diversification strategy)
Complex financial tool (could include also preferred shares)
Enterprise value estimation is needed (it requires the involvement of lawyers and financial experts)
Corporate governance andaccountability become more difficult with an increasing the number of shareholders
Funding a project promoted by firms,entrepreneurs, teams, individuals
Funding the market validation of aprototype (idea, event, service, product)
Rewards (products/services) has to beindustrialized and delivered
Communications investment (video,mailing, external agencies, etc.) is needed
Legitimation of the campaign, and itspromoter, is based on the ability toeffectively deliver the reward on time
The world of crowdfunding
The scope of crowdfunding
• A new crowdfunding project is created every 3 minutes
• 500 new projects created every day.
• Global crowdfunding is growing steadily, more than doubling every 60 days.
• All or Nothing campaigns tend to raise more: the average amount projects have raised successfully across platforms is $7,145.01, but that figure drops to $4,516.46 when you include flexible funding projects.
KickstarterSuccess Rate
38%
Source: Analisi delle piattaforme di crowdfunding italiane”
December2015(lastavailable update)
69 establishedplatforms12 platform inthelaunchingphase
What about Italy?
2005 2010 2011 2012 2013 2014 20152008
Produzionidal basso Smartika
BuonaCausaIodono
PrestiamociRete del Dono
CineamaCom-Unity
LetsdonationMusicraiser
SmartikaStarteedEppela
CommoonDeRevFidalo Ginger
Micro CréditArtistique
ProposizioneTerzo Valore
Werealize
Assiteca CrowdBeCrowdyBookabook
FunditalyInnamorati della culturaProgetto Civibanca 2.0
School RaisingStarsUp
UniversitiamoUpspringer
VizibolWithYouWeDo
CrowdfundmeCubevent
Giffoni Innovation HubMecenup
Next Equity SportSupporter
Tip VenturesTriboom
WOOP food
Source: Analisi delle piattaforme di crowdfunding italiane”
Italian Crowdfunding System31
13 13
3
8
10
5
10
15
20
25
30
35
Reward Donation Equity Lending Reward-Donation Donation-Lending
ModelN. of
projects received
N. of projects
published
Successfulprojects(>100%)
Fundedprojects(<100%)
Unsuccessful
projects
Successfulrate
Total value
Reward 23.314 2.327 1.151 575 704 49% 7.104.340Donation 2.650 2.090 240 1.047 615 12% 1.356.410
Equity 360 21 7 2 9 33% 1.637.631Lending 67.400 10.100 4.325 0 0 43% 22.824.000
Reward+Donation 7.200 6.843 659 1.097 5.687 10% 3.630.034Donation+Lending --- --- --- --- --- -- 20.230.324
Total 100.924 21.381 6.382 2.721 7.015 30% 56.782.740
The Equity Crowdfunding Italian System
Consob has approved 19 equity-based platforms:
• 18 (ordinary)
• 1 (special)
12 platformsareeffectivelyworkingUnicaseedStarsup
AssitecaCrowdNextEquityCrowFundMeInvesti-re
TipVentures
The most famous ‘quasi-equity’ plaform is Siamosoci.com, that is a sort of club for professional investors (not an equity platform)
Fragmented.Ofcourse
Equity-Based campaignsOverall, 38 equity-based campaigns in Italy (during 28 months).
15 succesfully funded
http://www.finanzaaziendale.polimi.it/equitycf/equitycf.html
N.ofprojects
Equitycollected
Equity and Lending in UK
The UK Alternative Finance Industry Report 2014 - Nesta
The weak side of the Italian context
• Limited crowdfunding culture
• Digital Divide (technological and cultural)
• Limited knowledge of English language
• Relatively low use of online payment system
• “I pay my taxes every year. The State has to support entrepreneurs, start-ups, social and cultural initiatives. Not me”
• Scarce support from public and private (financial) institutions
• Economic crisis
Something I learned about crowdfunding
• Crowdfunding is an excellent pre-market test for the launching of new products and services
• Crowdfunding is not suitable for everyone and everything
• Crowdfunding is not for free
• Crowdfunding campaign cannot be improvised
• Money doesn’t fall from the sky. Promotion and commitment are essential
• Crowdfunding campaign is really useful for its comments and feedback also when it doesn’t achieve the funding goal. And it’s possible to try again (and again)
Do you think that a good idea is enough to make crowdfunding succeed?
Tips for the campaign1. Sustainability of the overall project
2. Budget definition
3. Target analysis
4. Identification of your stakeholders
5. Other funding sources (essential to generate “trust”)
6. Team for the crowdfunding campaign
7. Length (30-45-60-90 day) and period of the campaign
8. Existing platform or DIY?
9. Rewards generation
10. Project description
11. Video
12.On-line and off-line promotion
13.Feedback/community management
Go back home, choose a crowdfunding platform,
explore the projects, fund a project you like
or you find it worthy to be implemented
Homeworks
Contacts and moremail
twitter@bbalbon
Papershttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2430463
http://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2015-uk-alternative-finance-
benchmarking-report.pdfhttps://www.nesta.org.uk/sites/default/files/understanding-
alternative-finance-2014.pdf