Funding Funding EntrepreneurshipEntrepreneurship

C.J. CornellC.J. Cornell @cjcornell@cjcornell

Small BusinessSmall Business

High-Growth StartupsHigh-Growth Startups

Ideas -> Patents, IP etc Ideas -> Patents, IP etc

Social ImpactSocial Impact

INtrapreneurshipINtrapreneurship

ACTIVITIES RESULTSRESOURCES

Defining Entrepreneurship

Defining Entrepreneurship

Type of Entrepreneurship

Desired/Expected Outcome

Activities Resources Required / Available

Small Business(merchant, consultant, freelancer, franchisee)

Paycheck(s), Personal Satisfaction (lifestyle)

Business Operations: Legal establishment, managing employees etc.

Personal Funds, Bank Loans, SBA Assistance. “organic” (revenue funding)

Innovation(Scientist, researcher, inventor, artist …)

Patents, IP, Tech Transfer, Royalties

Institutional research, Documentation of IP

Government/Public Funding. Foundation and special private (patron) funding

Intrapreneurship(manager, employee)

Large company growth, new products, new processes…

“working the system”, aligning allies, persuading stakeholders

Internal, corporate resources, funding

Social Entrepreneurship(activist, advocates, patrons)

Solving or Impacting “causes” & societal issues. Awareness. Behavior change.

Marketing, petitioning, organizing. “empowering” others to do the same.

Foundation funding. Charitable/fundraiding. Patrons. Public funding.

“Vanguard” Entrepreneurship(technologists, ‘silicon valley’, opportunists, dreamers)

Growth; market making,.“Scalability”. Rapid Market domination.Wealth – personal and ‘community’

Rapid concept to product, to market. “pitching”, business models, acquiring “users” – particularly early adopters and influencers.

Personal funds.Angel fundingVenture capitalIPO

Type of Entrepreneurship

Desired/Expected Outcome

Activities Resources Required / Available

Small Business Paycheck(s), Personal Satisfaction (lifestyle)

Business Operations: Legal establishment, managing employees etc.

Personal Funds, Bank Loans, SBA Assistance. “organic” (revenue funding)

Innovation Patents, IP, Tech Transfer, Royalties

Institutional research, Documentation of IP

Government/Public Funding. Foundation and special private (patron) funding

Intrapreneurship Large company growth, new products, new processes…

“working the system”, aligning allies, persuading stakeholders

Internal, corporate resources, funding

Social Solving or Impacting “causes” & societal issues. Awareness. Behavior change.

Marketing, petitioning, organizing. “empowering” others to do the same.

Foundation funding. Charitable/fundraiding. Patrons. Public funding.

“Vanguard” Growth; market making,.“Scalability”. Rapid Market domination.Wealth – personal and ‘community’

Rapid concept to product, to market. “pitching”, business models, acquiring “users” – particularly early adopters and influencers.

Personal funds.Angel fundingVenture capitalIPO

FundingEntrepreneurship

FundingEntrepreneurship

Type of Entrepreneurship

Desired/Expected Outcome

Activities Resources Required / Available

Small Business Paycheck(s), Personal Satisfaction (lifestyle)

Business Operations: Legal establishment, managing employees etc.

Personal Funds, Bank Loans, SBA Assistance. “organic” (revenue funding)

Innovation Patents, IP, Tech Transfer, Royalties

Institutional research, Documentation of IP

Government/Public Funding. Foundation and special private (patron) funding

Intrapreneurship Large company growth, new products, new processes…

“working the system”, aligning allies, persuading stakeholders

Internal, corporate resources, funding

Social Solving or Impacting “causes” & societal issues. Awareness. Behavior change.

Marketing, petitioning, organizing. “empowering” others to do the same.

Foundation funding. Charitable/fundraiding. Patrons. Public funding.

“Vanguard” Growth; market making,.“Scalability”. Rapid Market domination.Wealth – personal and ‘community’

Rapid concept to product, to market. “pitching”, business models, acquiring “users” – particularly early adopters and influencers.

Personal funds.Angel fundingVenture capitalIPO

FundingEntrepreneurship

FundingEntrepreneurship

WHYWHY

ACTIVITIES RESULTSRESOURCES

Type of Entrepreneurship

Desired/Expected Outcome

Activities Resources Required / Available

Small Business Paycheck(s), Personal Satisfaction (lifestyle)

Business Operations: Legal establishment, managing employees etc.

Personal Funds, Bank Loans, SBA Assistance. “organic” (revenue funding)

Innovation Patents, IP, Tech Transfer, Royalties

Institutional research, Documentation of IP

Government/Public Funding. Foundation and special private (patron) funding

Intrapreneurship Large company growth, new products, new processes…

“working the system”, aligning allies, persuading stakeholders

Internal, corporate resources, funding

Social Solving or Impacting “causes” & societal issues. Awareness. Behavior change.

Marketing, petitioning, organizing. “empowering” others to do the same.

Foundation funding. Charitable/fundraiding. Patrons. Public funding.

“Vanguard” Growth; market making,.“Scalability”. Rapid Market domination.Wealth – personal and ‘community’

Rapid concept to product, to market. “pitching”, business models, acquiring “users” – particularly early adopters and influencers.

Personal funds.Angel fundingVenture capitalIPO

The Funding GapThe Funding Gap

Concept to Product to Growth

Concept to Product to Growth

$$ $$ $$$$

Concept to Product to Growth

$$Entrepreneur IPO

Concept to Product to Growth

$$Entrepreneur IPO

$$Entrepreneur IPO

$$

Venture Capital

Concept to Product to Growth

$$Entrepreneur IPO

$$Entrepreneur IPO

$$

Venture Capital

$$Entrepreneur IPO

$$

Venture Capital

$$

Angels,accel & incub

Concept to Product to Growth

$$Entrepreneur IPO

$$

Venture Capital

$$

Angels,accel & incub

CrowdfundingCrowdfunding

$$$$

Concept to Product to Growth

$$Entrepreneur IPO

$$

Venture Capital

$$

Angels,accel & incub

CrowdfundingCrowdfunding

$$$$

CrowdfundingCrowdfunding$$

Concept to Product to Growth

$$Entrepreneur IPO

$$

Venture Capital

$$

Angels,accel & incub

CrowdfundingCrowdfunding

$$$$

CrowdfundingCrowdfunding$$

CrowdfundingCrowdfunding$$

Concept to Product to Growth

$$Entrepreneur IPO

$$

Venture Capital

$$

Angels,accel & incub

CrowdfundingCrowdfunding

$$$$

CrowdfundingCrowdfunding$$

CrowdfundingCrowdfunding$$

CrowdfundingCrowdfunding$$

Crowdfunding

Soliciting & Collecting relatively small amounts Soliciting & Collecting relatively small amounts of money (of money (fundingfunding) from a large number ) from a large number ((crowdcrowd) of people) of people

What is Crowdfunding

• Derived from Collective Intellgence• Convergence of ecommerce, venture funding,

social media, social networking • Online and Offiline• Debt, donation, equity and other• ROI, ROE

What is Crowdfunding

What is Crowdfunding

What is Crowdfunding

What is Crowdfunding

What is Crowdfunding

What is Crowdfunding

What is Crowdfunding

What is Crowdfunding

Crowdfunding Concepts

• Debt Crowdfunding– microloans– P2P lending

• Donation Crowdfunding– Charity/Causes– Kickstarter Model– Rewards Based– Pre-Order/Presumer

• Equity Crowdfunding – JOBS act

Equity Crowdfunding - JOBS• Eliminates ban on general solicitation and general advertising in connection with

private offerings to accredited investors under Regulation D (Rule 506) and to qualified institutional buyers under Rule 144A.

• Exemption from Securities Act registration “crowdfunding” transactions (involving access to small amounts of capital through the internet).

• Exemption to allow issuance of up to $50 million of securities in any 12-month period, up from the current $5 million threshold

• An increase in the number of shareholders a company may have before being required to register its common stock with the SEC and become a public reporting company from 500 to 2,000 total shareholders (including up to 500 “unaccredited” shareholders)

• Amount each person may invest in offerings of this type, tiered by the person's net worth or yearly income.

“THE KICKSTARTER MODEL”Rewards-based, Donation Crowdfunding:

ALL OR NOTHINGALL OR NOTHING

Perks &Perks &RewardsRewards

Updates (and Blogging)Updates (and Blogging)

Updates (and Blogging)Updates (and Blogging)

Comments & EngagementComments & Engagement

http://www.kickstarter.com/projects/hop/elevation-dock-the-best-dock-for-iphone

• The iPhone-friendly Pebble watch earned $7.6 million more than its $100,000 goal.

• And the Galileo iPhone platform closed its Kickstarter campaign at $702,000, far surpassing its $100,000 goal.

• Ouya raised $2 million in one day for a new Android gaming console (it’s raised more than $5 million to date),

• the Nifty MiniDrive, external memory for Apple MacBooks. The tiny storage company is more than 2,000% above its $11,000 goal with 15 days left in the campaign.

REWARDS & PERKS = “WHY”Rewards-based, Donation Crowdfunding:

http://trendwatching.com/trends/infographics/presumers/

Rewards Crowdfunding

• Incentives & perks• Pre-Orders• Pre-Sumers

• Market Validation

Rewards don’t have to worth $$

SO, WHY WOULD ANYONE …??Rewards-based, Donation Crowdfunding:

Directed by

Patrick Million

Executive Producer

CJ Cornell

a Patrick Million FILM

American Grandmaster

WHY Crowdfunding?

• Passion– For the technology– For the industry– For the cause– For the product

• Affinity– For the Entrepreneur– For the region, industry etc

• Connection• Every reason BUT R.O.I. …

Lessons from Ethan Mollick’s “The Dynamics of Crowdfunding: Determinants of Success and Failure”

emotional rate of return.

Not financial ROI

UH OH …The Kickstart Model..

Crowdfunding sites

• Kickstarter• Indiegogo• • • • • Propel Arizona

• Equity Crowdfunding sites (not legal, not operating)

• Specialty niche Crowdfunding sites

• Micro loan, cause/charity funding sites.

HOW to Crowdfund?

1. PRE - Preparing

2. PUSH - Running the campaign

3. POST – Delivering on your Promise

HOW to Crowdfund?

1. PRE - Preparing– Build Credibility– Sharpen Pitch & Post– Perks and Rewards– Timefames & $$

HOW to Crowdfund?

PUSH - Running the campaign• Social Media• Comments & Updates• Networking• Personal Pitches

Social Engagement

– Transparency & TrustTransparency & Trust– Social Proof & Viral FXSocial Proof & Viral FX

– Engagement & “The Fundamentals”Engagement & “The Fundamentals”– TwitterTwitter– FacebookFacebook– BloggingBlogging

HOW to Crowdfund?

POST - campaign• Thanks …• Perks and rewards• Updates• Completing your goals !!

www.propelarizona.com

Introducing … Introducing …

Crowdfunding Arizona Entrepreneurs

Crowdfunding Arizona Entrepreneurs

Jumpstarting Innovation & Economic GrowthJumpstarting Innovation & Economic Growth

• Brave Souls • White Knights• Superstars• Supernovas• Etc …

• Pitch Events• Contests• Workshops• Mentoring

www.propelarizona.com