personal initiative at Higher Institute for Administrative Development (HAID) for Entrepreneurship Finance Course.

1. Eng. Mohammad Alyan

2. Agenda
• Introduction
• What’s CrowdFunding?
• Crowdfunding Models or types
• How does it work?
• Crowdfunding Platforms
• Crowdfunding Statistics
• How Crowdfunding Currently Works
• Arab experience
• Important Facts
• Tips for Success

3. Everything is Different Now

4. The World’s Changing
The Internet
Facebook
Mobile Phone Apps
&
Now
CrowdFunding

5. What’s CrowdFunding?

6. “CrowdFunding is the practice of
funding a project or venture
by raising monetary contributions
from a large number of people,
typically via the Internet.”
One financial expert describes it as
“large groups of people combining their
economic power to support an organization,
company or project they believe in.”

7. Crowdfunding Definition
“the practice of funding a project or venture by
raising many small amounts of money from a
large number of people,
typically via the
Internet.”
– Forbes

8. Crowdfunding actors
The crowdfunding model is fueled by three types of actors: the
project initiator who proposes the idea and/or project to be funded;
individuals or groups who support the idea; and a moderating
organization (the "platform") that brings the parties together to
launch the idea.

9. Crowdfunding Principle

10. Crowdfunding Principle

11. Crowdfunding Principle

12. Crowdfunding Models or types
• Rewards-based crowdfunding.
• Start-up equity crowdfunding.
• Debt-based crowdfunding.
• Good-cause crowdfunding.
• Pre-order crowdfunding.

13. Rewards-Based Crowdfunding
•Reward-based crowdfunding has been used for
a wide range of purposes, including motion
picture promotion, free software development,
inventions development, scientific research, and
civic projects.
•two types of reward-based crowdfunding were
identified:
–Keep-it-All (KIA)
–All-or-Nothing (AON)

14. Start-Up Equity Crowdfunding
This new model allows large numbers of
“regular” people to invest small amounts
online to fund early start-ups.

15. Debt-Based Crowdfunding
• Sometimes called micro-financing or peer-to-
peer (P2P) lending:
– start-ups borrow money from a number of people
online and pay them back after the project is finished.

16. Good-Cause Crowdfunding
• People invest (donate) money to a
project that has good moral/ethical value.
• Most companies using this model are
not-for-profits.

17. Pre-Order Crowdfunding
• Investors make online pledges to pre-buy the
product for later delivery (if it is ever built).
• No financial return should be expected other
than the product.

18. Different models
£%
Equity based: Enables the crowd to invest for equity, or
profit/revenue sharing in businesses or projects. This form of the
model has been the slowest to grow due to regulatory
restrictions that relate to this type of activity.
Lending based: Projects or businesses seeking debt apply
through the platform uploading their pitch, with members of the
crowd taking small chunks of the overall loan.
Reward based: Enables people to contribute to projects
and receive non–financial rewards in return, usually operating a
tiered system where the more you donate the better the reward
you receive.
Donation based: Allows charities, or those who raise
money for social or charitable projects, to gather a community
online and to enable them to donate to a specific project.

19. Donation Model
Online campaigns generate hundreds
of small donations to achieve a financial
goal.
Reward Model
Supporters make monetary
contribution through donations. The
receiver then gives some kind of reward
to the supporter either in tangible or
intangible form.
Equity Model
Investors receive an interest in the
profits that they help fund.

20. Traditional funding vs CrowdFunding

21. How it works?

22. How it works?

23. How it works?

24. How it works?

25. How it works?

26. How it works

27. Crowdfunding Platforms

28. The rise of the platforms

29. Major Unique Crowdfunding Platforms
Kickstarter is a platform where creative projects raise donation-based
funding for domains like films, games, music, art, design and technology.
Since their launch in 2009, they have raised $ 819 Million in funding for
49,000 creative projects.
Indiegogo allows donation-based fundraising campaigns for different
projects related to personal finance needs and charities. Since its inception
in 2008, they have had great international growth because of their flexibility
and broad approach to industries.
Crowdfunder allows start-ups and small businesses to raise funds by selling
equity, debt and revenue-based securities, while attracting angel investors
and venture capitalists to your company. The company has localized
crowdfunding and investment to help develop entrepreneurial ecosystems
and access to capital outside Silicon Valley.
A wholesale market providing funding and distribution for the best new
apps to platforms and stores. It offers a chance to let the backers fund the
apps that are currently on sale or in the stage of development, but
backers could earn back their money by backing the app!

30. Top 3 Crowdfunding Sites

31. http://socialmediagroup.com/2012/04/25/crowdfunding-steroids-social-media/

32. Different sectors
Business
Community and
voluntary
sector
Public
services’
Education and
research
Arts

33. ARTISTS FILM MAKERS TECHNOLOGISTS
Top funded industries

34. Empower
people to fund
what matters
to them
We all want to be part of
something meaningful

35. Crowdfunding Web sites are Internet
platforms that support the collective
cooperation, attention and trust by
people who network and pool their
money and other resources for
projects initiated by other people or
organizations.
Sources:
CrowdFunding Statistics

36. “A New Economy”
The World Bank just issued a study
that predicts CrowdFunding worldwide
will have the ability:
“To deploy up to $96 billion yearly
by 2025”

37. Crowdfunding Legislation
U.S.A.
• April 2012, Obama
passed the JOBS Act
• Eased federal laws to
encourage small business
and startup funding
• Businesses can accept
small contributions from
citizens without making
IPO
CANADA
• Investment (equity)
model not legal in
• No national securities
regulator (implemented
at provincial level) then
coordinated through CSA
• Gov’t wants to take a
“wait-and-see” approach

38. How Crowdfunding Currently Works?
Donation-
Based Rewards
Pledges Toward Goal
Details about the
Project. The more
information the
greater the
chances of
funding
Open area
comment
section.
Where
backers can
ask
questions.
All or Nothing Financing

39. What does Social Media Integration Mean?

40. 1) Fraud Check
• Your Name, Address, Social Security.
• Company Name
• What problem does your product/service solve?
• How does it make money?
• How much money do you need?
• How will you use the funds?
• How far will those funds get you?
• How much equity are you willing to give up for this
capital?
2) Business Plan

41. This is what Social Media Gets you ...
Q:Hi Woodie -- I like your idea. Any data to back up your
theory that kids don’t like medicine? I know mine doesn’t
but that doesn’t mean they all don’t.
A:Hi Christina. Great question. There’s a really good study
on pediatric compliance that was done by the American
Academy of Pediatrics in 2007. It showed that taste was
the main factor why children don’t take their medicine.
Here’s a link to the article:
www.aap.com/pediatric_compliance.
93% Approve, 7% Disapprove
My kids don’t like their medicines.
I’ve got one that does and another that hates it
As a pharma rep - i hear this all to often
especially as it relates to augmentin.
Questions from the
crowd
Answers from the
entrepreneur

42. Campaign Length
– 30-60 days
Target Amount
– Covers expenses
– In line with expectations
Live Fundraising/Pitching
– Meet & Greet / Demos

43. Keys to Remember
• Build your network before the campaign
• Be flexible and responsive
• Know your media targets
• Integration

44. Arab experience
• Zoomaal : The Middle East’s newest crowdfunding
platform, launched at Jun 2013.
• Aflamnah :Started in July of 2012 Aflamnah -- which
simply translated means "our films" in Arabic -- It is
based in Dubai or UAE. It is aimed at filmmakers
from the Arab world, but it also accepts science
inspired projects and any form of creative ideas.
Aflamanah doesn’t use all-or-nothing funding; project
creators keep all funds raised and they fees a fixed 100$
upload fee to post the project to their site, then they ask for a
6% commission on the money raised and don't penalize those
who haven't reached their target goal with extra fees.

45. Arab experience
• Shekra: is drawn from the Arabic phrase “sherik fekra” in
Arabic, which means “share an idea.” The platform was
launched in Cairo, in order to fully support startups,
Shekra provides many activities before and after funding.
Shekra works by asking its network of investors to offer
small amounts of capital in order to fund a startup or a
specific project, thus mitigating investment risk and It had
been said that they have only had 70 in total some from
Egypt and others from around the region and globe.

46. Arab experience
• Yomken: a non-profit crowdfunding Arab platform based
in Egypt.
• Eureeca: the first crowdinvesting (equity crowdfunding)
platform in the region, connecting SMEs (small &
medium enterprises) with investors. Registration for
entrepreneurs and investors is free, Businesses are
required to set a funding target and are provided a
standard 90 day period to raise funds from investors on
the website. If the funding target isn’t reached within that
period the funds will be returned to the investors.

48. zoomaal

49. zoomaal
Abdallah Absi

50. guidelines

51. guidelines

52. How it works

53. Fee

55. Macdoos

56. Macdoos

57. Important Facts
• The degree of funding success will come down to
transparency, communication, disclosure and
connectivity
• People will only back those ideas they think are
worthy and with dollars they are willing to invest
• $1 in .... 8 years later .... $36.40 out
• Most importantly ...

58. Crowdfunding is NOT

59. Crowdfunding is NOT

60. Build out your team
Campaigns with a team raise 339%
more than campaigns that run solo
Indiegogo lab: http://slidesha.re/1uwj2wu

61. Higher Goal ≠ More Money
People want to give
to
succe$$ful projects
87% of campaigns that hit their goal exceed it.

62. 30-45 days. TOPS
Indiegogo lab: http://slidesha.re/1uwj2wu

63. Campaigns with a pitch video raise
370% more compared to ones
without.
1:27
Indiegogo lab: http://slidesha.re/1uwj2wu

64. Successful marketing = successful crowdfunding

65. “Crowdfunding is about
building and connecting
with your community. The
money part comes AFTER
you succeed with the
connecting part.”
one thing
Eli Regalado

66. Remember what the
famous motivational
speaker Zig Ziglar said?

67. “If you help enough other
people get what they want,
you will get what you want”