Crowdfunding allows individuals and organizations to raise money for projects or causes via the internet. It pools money from a large number of people who network and donate small amounts online. The document discusses different crowdfunding models, elements that make campaigns successful, potential pitfalls, and examples of crowdfunding platforms like Kickstarter and Indiegogo that have funded thousands of projects and raised hundreds of millions of dollars. Crowdfunding provides a new source of capital for ideas and projects that may otherwise not receive funding.

1. Crowdfunding,
the fast and simple head-start
By Sohail Abbasi (@SohailAbasi)
www.khoshfekri.com @khoshfekri

2. What is Crowdfunding, anyway?!
• Crowd + Funding
• People + $$$
• Pooling money by large group of people via the
Internet for a specific targeted project/cause
• Wisdom of the Crowd
• Revolutionized in 2009 by Kickstarter.com

3. Crowdfunding in Iranian Culture
•
• Donations to set Non-intentional financial crime
prisoners free
•
• Donation to buy dowry for the bride
•
• Donations for Renovating Schools, Public
baths, mosques,…
•
• School construction charity organization, annual
Conferences

4. Crowdfunding Placement
Crowdfunding
Crowdsourcing
Social Networks
Web 2.0
The Internet

5. Why should I care about it?
• Making Ideas happen needs Capital
• Bad Economy
• Low investment risk tolerance
• Difficult to get bank loans
• Decrease in Gov. funding and/or supports
• New “1st Money” for ventures ($10k - $50k average)
in other countries
• Crowdfunding Campaigns are Viral

6. Why Crowd Fund?
• Micro-donations will make hundreds of projects
possible, projects that otherwise would have to wait
for funding or not be funded at all.
• Projects that are limited in scope and time and for
which small amounts of money are required, can
be made possible
• Entrepreneurs will gain more visibility, connect with
a wider audience of donors and enhance public
knowledge of their work/products

7. Need more reasons?
• Funds from donors can speed the process of
investigation and lead to faster and better
innovations and Economic effects
• The general public has an easy and cost-effective
way to advance and help ideas / projects that
personally appeals to them.
• People can be more engaged with innovations, by
learning about and funding an Entrepreneur and
his/her startup company.

8. How does it work?
• Needs a Platform
• Money target for the campaign
• Campaign length
• Compelling story
• Video
• Rewards
• Plan to get people to the campaign

9. USP of Crowdfunding
• New source of capital
• Social networks
• A tribe of angels
• Future customers
• Proof of concept
• Global visibility

10. Forms of Crowdfunding
• Debt Crowdfunding
o microloans
o P2P lending
• Donation Crowdfunding
o Charity/Causes
o All or Nothing Crowdfunding, is Standard Model
o Rewards Based (Today’s Model)
o Perks and Rewards = Pre-Order/Presumer
• Equity Crowdfunding , which is Still Far away

11. Donnation Model: SellaBand

12. Lending Model: KIVA

13. Donation Model: Obama Campaign

14. The Motivation for Crowdfunding
• Passion
o For the technology
o For the industry
o For the cause
o For the product
• Affinity
o For the Entrepreneur
o For the city, industry, etc.
• Connection
• Return of Emotions NOT R.O.I.

15. Success Stories
• 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.

16. Elements of successful campaigns
• They already have fan bases
• They build from something familiar
• They are simple
• They are (usually) NOT about the founders
• They appeal to a specific interest
• They are about emotion
• Make the donor:
o Feel being part of the cool group
o Feel like s/he is important
o Feel powerful and Influential

17. Potential Pitfalls
• Some worry that only projects with splashy
campaigns will be funded
• Easier to generate interest in fancy and attractive
projects than simple and efficient ones
• Lack of Peer Review
• Less disruptive innovations to appeal to the general
public

18. Two Leaders
• Kikstarter
• Indigogo

19. Kickstarter
• Supports creative projects of all sorts
• Over $350 million has been pledged by more than
2.5 million people, funding more than 30,000
creative projects
• All-or-nothing funding
• Rewards for funders
• http://www.kickstarter.com

20. Kickstarter Statistics 2011
• Launched Projects: 27,086
• Successful Projects: 11,836
• Dollars Pledged: $99,344,382
• Rewards Selected: 1,150,461
• Total Visitors: 30,590,342
• Project Success Rate: 46%

21. Indiegogo
• Flexible funding
• “All about allowing anybody to raise money for any
idea”
• Offers “perks” for funders
• http://www.indigogo.com

22. Resources
• Crowdfunding: Transforming Customers into
Investoes Through Innovative Service Platforms
[Andrea Ordanini, Lucia Miceli, Marta Pizzetti, A.
Parasuraman]
• A Framework for European Crowdfunding [Kristof De
Buysere, Oliver Gajda, Ronald Kleverlaan, Dan
Marom]
• A Snapshot on Crowdfunding [Joachim Hemer]
• Crowdfunding - a report [Adeoluwa Adeniyi]
• Crowdfunding in a Canadian Context [Canada
Media Fund]

23. Thank You!
Presented by Sohail Abbasi (@SohailAbasi)
www.khoshfekri.com
www.facebook.com/khoshfekri
www.twitter.com/khoshfekri