INITIATE: Crowdfunding Summit, Sydney

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UPDATE: This event is only a few days away now!  Leave a comment if you would like to have a $15 discount on ticket prices. I’ll send you the promo code by email. Anna

I am looking forward to a fantastic day at the first full-day summit on crowdfunding held in Sydney. As you can see above it’s Monday 8 September at the State Library.

The program looks pretty exciting – and yes, I’ll be part of it! The organiser, Simon Clegg, ran a successful event in New Zealand last year and since then I’ve been hoping the Sydney event would happen soon.

The line up so far for INITIATE: Sydney is great and includes Rick Chen from Pozible, Lloyd Perry from Indiegogo, Tom Dawkins from StartSomeGood, Prashan Paramanathan from Chuffed, Stuart Fox from VentureCrowd, Chris Gilbert from Equitise, Dean McEvoy from IconPark, Richard Briggs from Sportaroo, Paul Niederer from ASSOB, John Kluver, Corporations and Markets Advisory Committee – and more!

The prices are reasonable, the location is handy and with that line up of brains about crowdfunding in Australia it should be a fantastic day. I’m pretty darn excited!

Also, on a more personal note, the third edition of Crowdfund it! arrived from my publisher yesterday. There is nothing like boxes of books to make me happy!

Crowdfundit! Edition3Arrival

You can buy directly from my Publisher Editia Books – in all formats, both digital or print. Otherwise it is available at just about all ebook retailers!

Hope to see you at INITIATE: Crowdfunding Summit Sydney!

Anna Maguire, August 2014.

 

 

 

CLA Seminar on Crowd Sourced Equity Funding – ASSOB

CLA Seminar On EquityCrowd Sourced Equity Funding was explored from many different angles at the Commercial Law Institute of Australia half-day seminar on Friday 25th July 2014.

It was an interesting and informative day, introduced and chaired by Dr Terry Cutler, Principal, Cutler and Company; Chair, CSIRO Chile. You can read the full program of the day in this post here.

I left the seminar with a few thoughts:

 

  • Crowd Sourced Equity Funding WILL be legislated in Australia! It is just the detail that needs to be worked out.
  • The CAMAC report was considered well researched and thought out, but they also had time pressures on delivery. John Kluver, Executive Director of CAMAC would have liked more time to liaise with the start up community.
  • There are various opinions on the recommendations in the CAMAC report in terms of regulations and how restrictive they are.
  • The New Zealand approach is forward thinking, but CAMAC believe that the requirement of full disclosure in their report is a better approach.
  • It is important that when crowd sourced equity funding legislation is introduced that it goes well. If it doesn’t, then not only does it get bad press but people will lose faith in this great source of funding.

There was so much covered on the day, that this post will merely cover the first presentation of the day. Future posts will look at the NZ approach and the CAMAC report.

ASSOB history of equity raisings and the effect of ASIC regulations

We had the benefit of hearing from one of the world’s experts on the subject – Paul Niederer, CEO of the Australian Small Scale Offerings Board. We should remember in the rush of excitement about this ‘new’ source of funding that ASSOB have been operating for around seven years with unlisted companies and therefore have a unique understanding of dealing with retail (or unaccredited) investors, as well as sophisticated investors.

Some key stats:

  • ASSOB has raised over $139 million for early stage and growth companies.
  • Over that time, they have funded 310 pitches which had an average equity offered of 21%.
  • The average number of investors was 14.
  • The average percentage of retail/unaccredited investors for pitches was 60%.

A more recent entrant, CrowdCube, has been operating for around three years and is around 1/3 of ASSOB’s dollar volume.

I liked how Niederer compared reward crowdfunding with crowd sourced equity funding. Reward crowdfunding gives you more ‘instant gratification’ – the time period to receive ‘return’ in terms of a reward is set out clearly. It’s true however that there was a lengthy wait with the Pebble Watch! But with equity it is ‘hope’. The hope of the investor is that they will get a return on investment. The period of expectation is stretched out to three years. It’s not expected to be an instant return.

Without the ability – or should I say, means – to be registered with ASSOB as an investor, I found it very interesting to see the backend of the system. Maybe I’m just nosy, but I particularly enjoyed seeing a profile page of a company seeking investors. Like we are familiar with in reward crowdfunding, the issuers prepare a video pitch, along with updates and key investment documents.

Niederer also explained about six degrees of separation – or, as in the example of LinkedIn, three degrees of separation. With equity funding from the crowd, there will be the capital raising team and three more degrees removed from the team.

The capital raising team comprises of Founders, shareholders, directors, management etc.

1° The first tier of investors are friends, family, fans and followers (of the issuer).

2° This next level would comprise the friends of the first investment team.

3° The third level are those investors with no connection to the issuer. These may be angel investors, accredited and professional investors.

CLA-Seminar-Crowd-Sourced-Equity-ASSOBIt was interesting, and logical, to hear that the 1° investors had a more emotional reason to invest, while the 3° investors did so for rational reasons. Niederer reported that on average 50% of a raise came from 1°, with the remaining spilt evenly over 2° and 3°.

Niederer has stated before (for example, in this post) that he believes that a lot of the CAMAC report was structured around the 3°. A lot of start-ups will raise money from the 1° and 2° tier. If the Australian government adopt the recommendations that only 20 of the unsophisticated investors, over a twelve month period, can contribute over $2,500, then it will restrict a company from reaching the required amount to start up. Many, Niederer included due to his experience with the stats on ASSOB, would like to see this raised to 50 or even 100 unsophiscated investors. Or for that matter, even, 49 – to keep it under 50 for the Pty Ltd companies.

I also recommend reading this post from Niederer, written before the final CAMAC report was received.

Two other interesting things came out in the question session after this presentation.

Q: What increases credibility when pitching?

Paul Niederer: Three things!

1. The Story. Do people want to know more?

2. The Team. Is the team balanced and credible?

3. The Followers. Does the company and/or concept resonate with people out there?

Q: What trends and changes has ASSOB and you (Paul Niederer) seen over time?

Paul Niederer: One is that before 2008, a company would be going for a raise of $1.5 to $3 million. Over time, with cloud computing, outsourcing etc the amount needed is a lot less. So the volume of each raise has been reduced.

For information about fees charged to use ASSOB, see this link.

There was a lot more discussed, but these are my top line thoughts from this part of the discussion at the Commercial Law Institute of Australia half-day seminar on Friday 25th July 2014.

I’ll be reporting on the presentations from the NZ perspective and the CAMAC report soon.

Learn about crowd sourced equity funding

Crowd sourced equity fundingAlthough creative and entrepreneurial crowdfunding projects tend to receive the most media coverage, when it comes to people-powered business, equity-based crowdfunding has attracted much interest.

The Australian Government’s Corporations and Markets Advisory Committee (CAMAC) took in feedback for a discussion paper about crowd sourced equity funding and held meetings with respondents in the first quarter of 2014. In May 2014 they released their report and this is available from their website. Continue reading

Crowdsourcing Entrepreneurs

Crowd Entrepreneurs

Crowdsourcing was an early example of the power of the crowd. We have some noteable success stories here in Australia including Matt Barrie from Freelancer.com. Doing business online has become the norm and building trust no longer requires meeting in person at the early stages. People find love on the internet after all, as well as ‘suppliers’ – as varied as babysitters to design or just about anything else you can think of. We put our faith in crowdfunders to deliver on our dream – or theirs.

If you want to find out more about Crowdsourcing then this great post will inform you! Jo Sabin from DesignCrowd pulled together some brilliant examples and showed that Australians have been crowdsourcing since 1901. You can read her post here.

Crowdsourcing can also be used as a ‘business matching’ service. If you are an entrepreneur looking for like-minded people then you need to meet them first! We’ve all spent a lot of time at various events where ‘our kind’ hangout – but what if you had the option to short-track the process?

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IconPark – a world’s first in crowdfunding restaurants and bars

I am so happy that Australia has recently launched a ‘world’s first’ by combining crowdfunding with investing in the people behind restaurants and bars. Super happy!

IconParkBlogPostCrowdfunding

So imagine this….

You’re a talented chef, bartender, barista, sommelier, or anyone involved in the food and beverage industry. You often dream about “When I open my own place…”. But the hard cold reality is you need to lease real estate, fit it out, pay staff and then give your life over to the chance that you’ll be a success and re-coup the funds – let alone the blood, sweat and tears.

 Bar Restaurante entrance

In what could be described as a “Hospitality Fight Club” IconPark uses the fundamental rules of reward-based crowdfunding to allow people to pledge their pre-orders or other rewards for six shortlisted food and beverage concepts.  The winner gets access to the fully-fitted out IconPark location in Stanley Street, a split of the net profits, loads of pre-orders for their three-month run and a lot of mentoring through the vetting process. And let’s face it – crowdfunding is just as much about marketing as about raising funds so the process builds the profile of each of the shortlisted teams!

To find out more about IconPark, watch the video below as it explains it in more depth.

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Wishing you a wonderful holiday season

ScallopAndStarfishXmasTreeKobunecraft

Whatever part of the world you are in, I hope that you have a wonderful, peaceful holiday season.

Thank you to all of the blog subscribers – I will be bringing you another year of crowdfunding content after the holiday season. Here in Australia it is time for relaxing, eating some of the beautiful food that our land produces and spending time with family and loved ones. Although it’s rainy and cool in Sydney today, I’m sure we will also get to enjoy some of our wonderful beaches, swimming in the ocean or time in the bush.

I have no doubt that 2014 will be another groundbreaking year for crowdfunding and I look forward to sharing news and developments with you as they unfold.

Enjoy this special time of year and I look forward to more interaction with you through the blog, Facebook or Twitter!

 

Anna Maguire
25 December 2013

Your Christmas Crowdfunding Guide

ScallopAndStarfishXmasTreeKobunecraftAs we venture closer to Christmas we face the inevitable task of dolling out huge amounts of cash for Christmas presents. If you’re anything like me then at some stage of the process you may feel a bit uneasy about spending so much money when there are serious issues of inequality in the world.

That is why I feel so passionately about crowdfunding for social ventures and not-for-profits. Today we’re featuring StartSomeGood, powered by passion to change the world.

If you want to feel good about the Christmas presents you buy (or ask for) then consider the StartSomeGood Christmas Guide. It means your expenditure will have meaning – the guide features products from current and past campaigners and you will know “you’ve helped passionate changemakers create a better future for their communities.”

StartSomeGood--Crowdfunding-Christmas-GiftGuide

Featuring gifts as diverse as ethical clothing, a beautiful calendar that deserves to have each image framed for lifelong enjoyment, a cookery book, inspirational cards, jewellery – I want it all!

In other news, I’ve been watching with interest the partnership of StartSomeGood and social media hub IndigenousX. Their aim is not only to crowdfund, but also extend their support base for a variety of Indigenous launched initiatives. Their first campaign was for the film Vote Yes that raised just over their funding target of $20,000. “Vote Yes aims to contribute to the conversation about equality in Australia by telling the story of the 1967 referendum on Aboriginal rights.” Well done to both StartSomeGood and IndigenousX on this fantastic crowdfunding effort. I look forward to seeing more Indigenous projects on SSG.

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Your Crowdfunding Project Page

Today on Crowdfund it! we are featuring a guest post by Camille McClane.
You can find out more about Camille at the bottom of the post.

Crowdfundit-Your-Crowdfunding-Project-Page

Setting up a crowdfunding project page isn’t terribly difficult. In fact, a lot of the third-party crowdfunding sites make it incredibly easy for you to do so.

What’s not so straightforward is getting people to initially take notice of your crowdfunding page. The amount of attention you drive to your crowdfunding page will have a huge impact on whether anyone will donate to your project or not.

With that being said, how you market your campaign and how you plan to get it in front of potential donors’ eyes is extremely important, especially when it comes to content.

Not only is it a matter of people seeing the project’s page, but it’s a matter of them becoming interested and engaged in it as well. It’s a tough sell to ask people to invest their own money into your personal project, but when done correctly, it can yield some incredible results.

So when you setup your crowdfunding page, consider the following qualities, as they’re sure to help you get more attention and engagement from other people:

1. Novelty and a unique message

In an age where unsolicited information is at an all-time high, a crowdfunding campaign isn’t going to get anywhere without a unique premise and mission statement.

You’ve got to keep in mind that people are constantly being bombarded by internet campaigns and a variety of solicitations, crowdfunding or otherwise. In order to avoid falling into the category of internet white noise, your crowdfunding campaign needs to have a novel idea at the root of it, as well as a unique message that will set you apart from all the rest.

In your message, you’ll want to be able to provide your audience with the story behind your campaign and answer these questions:

  • Why should they invest in your project?
  • Why is this project important to you?
  • Why choose you to deliver on the project?

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Subscription Crowdfunding Growth

Global crowdfunding platform Pozible  announced the beta launch of their subscription crowdfunding model.

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Pozible-Subscription-Crowdfunding

I’m pretty excited about the subscription model as it appears to address the challenge of ongoing support that projects may need. Wary of continually going back to their networks to ask for more money, crowdfunders may find this option a way for their supporters to offer daily/weekly/monthly/annual financial backing. What is also pleasing to see is that Subscription crowdfunding can be offered alongside the standard one-off crowdfunding rewards. For the right crowdfunding project I could definitely be encouraged to support monthly for a year, and feel happier in the wallet versus a larger one-off charge. The subscription will continue until the supporter opts out – so this can last for as long or short a period as they choose.

What sort of projects could use subscription crowdfunding? 

Subscription-Crowdfunding-Suitable-For?

According to Pozible, there are lots of crowdfunding projects that could use the benefit of subscriptions. From their website:

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Chuffed Crowdfunding Christmas

There’s a new platform in Australia aimed at not-for-profits and social enterprises and it’s got a hard-to-beat angle:  Fee Free Crowdfunding. With Chuffed immediately taking an average of 5 per cent off the costs to crowdfunders this is sure to gain a lot of attention from those in the target market.

Chuffed-Crowdfunding

The quick facts
Chuffed is aimed at social enterprises, not-for-profits and community organisations. They run both all or nothing as well as keep all campaigns. They do not charge any fees to use the platform, but there will be transaction costs of 1.4 per cent plus 30c per transaction. There is an optional donation as well, allowing crowdfunders to choose what amount they are willing to contribute towards the administration side of Chuffed

Chuffed-Christmas-Promotion

If you are passionate about being a social entrepreneur, then you may feel like getting into the Christmas feeling early. Chuffed are encouraging social enterprises and not-for-profits with a nice Christmas promotion.

The Chuffed Christmas promotion is open to Australian social enterprises and not-for-profit organisation to run crowdfunding campaigns with the potential to win cash prizes.  

The promotion is running now until Christmas Eve and a total of $5,000 is being given away:

  • The first 8 campaigns to raise $5,000 win $250;
  • The first campaign to raise $10,000 wins $1,000;
  • The first campaign to raise $20,000 wins $2,000.

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