It’s all about the crowdfunding video*

*Ok, it’s not only about the crowdfunding video, but find out why you should put your efforts into understanding how important your crowdfunding pitch video is to engaging potential supporters.

ItsAllAboutTheVideoSSWhile most crowdfunding platforms still say it is not imperative to include a video with your project pitch, we should all know by now that your chance of success will hugely improve if there IS a video.

Surely increasing your crowdfunding success is the only reason you need to make a video?  In this post I delve into research by Jess Milne about what constitutes a great crowdfunding video.

 

Having a crowdfunding video increases your chance of success and the amount of money you may raise.

 

The image below is the widely quoted Indiegogo stat – a video increases your chance of success by 115%.

Indiegogo Crowdfunding Video

Surely increasing your crowdfunding success is the only reason you need to make a video. But don’t just make an ok video. You need to make the best pitch video for your project that you possibly can. So what are the ingredients needed to make a great crowdfunding video pitch?

Research on crowdfunding videos

Recently I came across some research undertaken by Jess Milne about the importance of videos in a crowdfunding pitch. Jess is a Video Producer and Motion GFX Artist and has spent a lot of time researching what constitutes a crowdfunding video that is so good that those who watch it feel motivated to support a crowdfunding campaign.

Jess collected both quantitative data by a survey with 199 respondents, and also qualitative data from a focus group. The study incorporates the ability to capture emotional engagement by use of MindSight – an applied neuroscience test developed by Forbes Consulting Group.

You can read more in the article that will be published as an AFTRS occasional paper series to be launched by the school on April 30 2015. I will insert the link when live! From the paper Jess said:

What happens when we are exposed to an image? We recognise within ¼ of a second the salient features. For example, if it’s an animal, a child, a natural scene, etc. After ¾ of a second, we experience an emotional response: “Oh, that puppy is cute” or “That beach is so peaceful.” This window of time is considered the emotional discovery window. We have one second to have an emotional reaction before our logical analysis reaction kicks in. This is important to keep in mind because of the small amount of time (15-30 seconds) that can either help make or break your pitch video. Jess Milne, From the Heart to the Hip Pocket – Pitching for Successful Crowdfunding

Here is a great infographic from Jess that explains the ten basic ideas. You can click on the infographic for it to open up in a new window at a larger size.

The essential ingredients for your crowdfunding video pitch

Click image to view the infographic in a new page

I found point 3 an interesting one – ‘A touch of dynamics including the professionalism of the presentation.’  Over the four years that I’ve been writing, talking and teaching about crowdfunding there has been a big shift in the quality of crowdfunding videos. One important point that the research showed was that if your crowdfunding video is merely average you are much less likely to attract supporters.

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JessMilne

Thank you very much to Jess Milne for talking to me about her research. You can contact her through her LinkedIn profile to find out more. The Occasional Paper  referred to in this post will be published on the AFTRS website at the end of April 2015.

 

 

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INITIATECrowdfundingVideoAwards1In related news, INITIATE Crowdfunding held their Auckland crowdfunding summit in March 2015 and ran a Crowdfunding Video Awards – the first in the world as far as they know! You can find out more here.

 

 

Anna Maguire, April 2015

OzCrowd brought Jordan Home

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BringJordanHomeScreenshot

Aussie crowdfunding platform OzCrowd has been instrumental in bringing young Queensland man Jordan Darney home after suffering a terrible accident in Prague. While OzCrowd is one of the more recent entrants into the local crowdfunding market, unlike some others, it offers a variety of funding models. This was a huge advantage to friends and family of Jordan when his insurance company refused to pay his medical expenses due to the fact he’d been drinking when he had his accident. The Sunshine Coast community rallied around Jordan and amazingly enough raised over A$30,000 to help pay expenses to bring him home.

The quick facts

OzCrowd is open to a range of crowdfunding projects, ranging from causes or social enterprises, to business projects, creative to entrepreneurial. OzCrowd operate both All or Nothing OR Keep All (Flexible Funding). Their administration fee is 2.9% and For All or Nothing campaigns the fee is charged only if the funding goal is met.  Credit card fees charged by the payment provider are also passed on – 2.5% plus $0.30. 

OzCrowd enables users to discover projects under Personal or Business Projects. Personal projects currently have categories of animals and pets; babies and family; charity; education and schools; holidays; medical; memorials; music and film; sports; technology and weddings. They also list a ‘catch-all’ category of other. Business projects have the categories of adult; entertainment; new business ideas; retails/shops and video games. They also list an ‘other’ category in the business section.

OzCrowd have entered what is now becoming an established crowdfunding market, but believe they have several points of difference to appeal. I spoke to Director Nick Karolidis to find out more about their platform.

Crowdfund it: What made you want to launch a crowdfunding platform?

KarolidisWe have been following the industry for quite a while, having pledged towards many projects and working in a number of other crowd-based online models. Personally, the decision to enter the crowdfunding industry was off the back of a number of years of exposure to the start-up industry as well as a background in the legal profession dealing with clients in both start-up mode and non-for-profits seeking funding. We were eager to develop an Australian crowdfunding website which would be a one-stop-shop for those seeking funding for personal, business or charitable purposes and provided service that Australian expect but find little of these days!

Crowdfund it: Isn’t Australia, for our population size, already well served by existing platforms?

KarolidisWhilst we acknowledge that there are crowdfunding options for Australians with recent entry by the international giants, we identified a clear gap in the market which we are servicing.

Firstly, as our name suggests, we are 100% Australian owned and operated, exclusively for the benefit of Australian projects. Most of our clients are in love with our name and Aussie focus and it tends to fit either their business model and/or personal preferences. Separately, we noticed that most crowdfunding platforms are either US/UK focused, very picky with their application process, only cater to a particular segment of the market or a combination of the three. This is why subject to legality, OzCrowd allows all Australian personal causes or Australian businesses on our site.

The other key point of differentiation is the service we provide. Whilst our fees tend to be lower than most of the market, we provide personalised feedback and one-to-one support for campaigns. We contact all our clients to assist with campaign creation, marketing and general guidance. All campaign creators also receive the direct and/or mobile number for their OzCrowd personal campaign manager – which we feel really sets us apart and gives our clients the best chance of raising the funds they’re after.

Crowdfund it: You run both keep all and flexible funding. Why did you choose to run both types of funding?

KarolidisAs evidenced by the millions raised using both models – they both have advantages and are suited to different types of campaigns. Given we allow people to crowdfund for personal causes – such as medical expenses or weddings, flexible funding allows people to keep funds which will obviously help them along. Fixed funding is also advantageous for products or start-up businesses that need the goal amount to accomplish the project they are seeking funding for and also provide the rewards people are contributing towards. We discuss and guide our campaign contributors towards the model most suited based on our expertise in the industry.

Crowdfund it: With some projects you will donate up to five per cent towards a project. Can you explain how you select projects to support?

KarolidisWe have no fixed criteria in terms of supporting campaigns – similar to other corporates and organisations, we contribute towards campaigns we believe are worthy of the support, and at the end of the day it is quite subjective. We would love to fund all our projects but unfortunately, the practicalities of life mean we have a limited (but growing!) budget.

Crowdfund it: Social media validation is important when you decide to support a stranger’s crowdfunding project. I noticed that not all of your projects are currently linking – is this on the roadmap?

Karolidis: At the moment users can create an account by using Facebook to login or creating an account separately. Those that choose Facebook are “FB verified” and links are posted.

We will be implementing some changes in this space, but we believe the biggest validation and credibility a campaign can get is contribution and support from their friends, family and network. From our understanding, this support is what tends to give the public comfort about the validity of a project.

Crowdfund it: Can you tell us about the campaign on OzCrowd that has, to date, raised the most money?

Karolidis: We’ve had quite a few very successful campaigns since we launched in July 2014, the most successful has to be “BringOzCrowd-Bring-Jordan-Home Jordan Home” which was a donation-based campaign and raised over $10,000 in 24 hours and over $33,500 in a week! “Bring Jordan Home” is a campaign that helped 21-year-old Jordan’s family pay for expensive medical bills and flights to bring him home after having an accident overseas and suffering serious injuries.

The campaign is a great example of the community coming together to support one another, and has been featured on channel 7, WIN and numerous newspapers both home and abroad. Other than funding, the campaign has helped bring the community together and educate many Australian’s about the limitations of travel insurance. Personally it’s great to be running a platform that helps causes such as Jordan’s and reading the messages from all his supporters to help him recover is very encouraging.

Crowdfund it: How do you think we can encourage innovation in Australia? 

Karolidis: There are a number of key structural changes we can make to further innovation as well as keep it here post-establishment. Our tax system is likely the most significant, given the comparatively high tax rates we impose on start-up and technology-based companies, compared to countries which understand the importance of encouraging innovation. Our top tax rate presently sits at 49%, which is excessive and discourages entrepreneurs and innovators from basing their operations here particularly when selling out of a venture might incur a cost of almost half the value. Separately, given the global economy it is very easy to change your domicile to a jurisdiction that has encouraging tax rates and legal structures.

Legalising equity crowdfunding is also an obvious idea which will breathe life into ideas and innovation that otherwise would have limited chances of success under traditional funding sources.

Personally, I’d like to see more government action and funds in the tech start-up space, particularly given other industries have been taking a hit in recent times and the resulting increase in unemployment. Australia has a great opportunity to become a tech-hub with some changes in government policy and tax rates and this brings with it job numbers and standard-of-living increases across the board!

Crowdfund it: What do you hope is the future of crowdfunding in Australia for 2015 and beyond?

Karolidis: We hope and expect that the industry will continue to grow at a very rapid rate, as the Australian market become accustomed to the model and the associated efficiencies and opportunities crowdfunding provides. In particular, with the pending reforms to provide for equity crowding in 2015 Australia has a great opportunity to become a leader in the crowdfunding space. Together with the Crowdfunding Institute of Australia, OzCrowd will be advocating for changes which allow businesses to access this new funding model in an efficient way, whilst still providing for investor protections.

Thanks Nick!

You can find out more about OzCrowd on their website, on their Facebook page, or by following them on Twitter.

Anna Maguire, January 2015

You may also like to read:

Crowdfund it! CoverTo read more details about how to Crowdfund, purchase a copy of Crowdfund it!  directly from the publisher website from $9.99. It is also available on AmazonKobo, iBookstore, Google Play, and Tomley and other retailers. Available in print and ebook.

Seasons Greetings and Happy Crowdfunding in 2015

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Wishing you all a safe holiday season and good times with friends and family.

2014 was another big year and I wanted to think about some of the highlights for me.

  • Edition 3 of Crowdfund it! published. A lot of work goes into updating and my thanks to my Publisher Charlotte Harper from Editia in her continued support and work on this title.
  • I’ve had the pleasure of being asked to speak about crowdfunding at some amazing and interesting events including:
  • Being excited about the developments in crowdfunding, both worldwide and in Australia.

I found much less time to blog this year between working on crowdfunding, teaching and talking about digital publishing and managing the two tiny terrors (my foster children) and the unreasonably short school or pre-school hours.

Due to the fact that the youngest of the tiny terrors will finally be starting school, I will, for the first time in nearly six years have part of five days a week free. Woohoo! That gives me two extra (short) days a week and therefore I have some 2015 resolutions!

  • Continue to support Aussie crowdfunding platforms and developments.
  • Blog more often than I managed to do in 2014! And that includes the FIRST blog of 2015 on OzCrowd as I’ve been meaning to do this for ages! My thanks in the meantime to Nick Karolidis, Director over at OzCrowd for his patience in waiting for the post and also for letting me know any information on the platforms page that needs updating. Much appreciated Nick!
  • To write a list of all the current and emerging Aussie platforms focussing on crowdsourced equity funding.
  • To promote and participate in The Crowd Funding Institute of Australia. If you don’t know about CFIA, then head on over to the website or Facebook Page and find out more.
  • To work with selected crowdfunders on their campaigns to give them the best chance of success. Due to limited time I can only cherrypick those projects that meet my criteria of social change or publishing.

If you are interested in crowdfunding then you may want to contribute to the discussion paper being prepared by Treasury with input required by February 2015.

Happy Christmas and a safe and fun start to 2015!

Anna Maguire, December 2014. 

Crowdfunding by RipeNearMe at #StartingGood Digital Summit!

The lovely people over at StartSomeGood asked me to be part of their #StartingGood Digital Summit in October 2014.

#StartingGood2014-RipeNearMe

I was really excited to interview Alistair Martin from RipeNearMe – a brilliant initiative. This crowdfunding project to create change has to be one my favourite ones – it makes so very much sense. The concept behind RipeNearMe is simple – we buy our fresh food from supermarkets and frankly, the food isn’t that fresh is it? No matter the slogan. After growing and picking there is a lot of time before it actually appears in the supermarkets. Trucking. Storage. Retailing. While in theory I really want to grow more fresh food, my vegetable and herb growing commitment falters between a busy life. Sadly the weeds have a stronger commitment.

RipeNearMe maps edible plants growing on public land & food grown by ordinary citizens. Find, share, swap, buy or sell. They ran a crowdfunding campaign on StartSomeGood that raised over A$25,000 to help support their initiative.

To view our chat at the #StartingGood Digital Summit, click on the Google+ link below.

The video runs for just over 26 minutes, so if you’re short of time you can also read the #Storify of our chat.

Find out more about RipeNearMe on their website, Facebook or Twitter. Support, populate, propagate. Do Good, StartSomeGood.

PS: Let me know if you have any problems with viewing the video on G+. At this stage, that was the only place I could upload easily such a large file. Any suggestions welcome as to best manage large video files!

Anna Maguire, November 2014.

Win a copy of Crowdfund it! on Goodreads

If you’re a reader, then you may well be familiar with book community and reading recommendation site GoodreadsOften described as the Facebook for book lovers it enables readers and authors to create bookshelves, reviews and recommendations.

With edition three of Crowdfund it! published last month, a full box of books and a generous spirit I’ve decided to giveaway some copies! Goodreads choose the winners but it’s open to all.

Please enter the giveaway and spread the word if you know of anyone who would love to win a copy! The giveaway is running now and closes 18 October.
 

Goodreads Book Giveaway

Crowdfund it! by Anna Maguire

Crowdfund it!

by Anna Maguire

Giveaway ends October 18, 2014.

See the giveaway details
at Goodreads.

Enter to win

Anna Maguire, October 2014

INITIATE: Crowdfunding Summit, Sydney

INITIATE: CrowdfundingSummit Banner

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?

Continue reading

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.

Continue reading