the crowd funding revolution what it is and why it matters

The Crowd Funding Revolution

What it is and Why it Matters

About me

President + Co-Founder at FundableCrowd funding platform for small businesses.

Founder at IdeaBuyer.comOnline marketplace for intellectual property.

President + Founding Team at Startups.co400,000 Members, 20,000+ Active Accredited Investors

Eric Corl

Our Company

• Crowdfunding Platform for Businesses

• Funding at Scale

• 22 Employees

• ESPN for Startups

• Office Made for Entrepreneurs

Our Vision

Quick Tour

Why Is Entrepreneurship Important?

- Pay 45% of All Private US Payroll- Create 90% of the new jobs in America- Create 4,000 new jobs on an average day- Hire 40% of high tech workers- Provide 55% of all jobs.

Important But Neglected

Less than 1/3 of professional investments are at the seed stage.

Most companies cannot raise money from professional sources until they no longer need it.

Big delta in the impact small businesses have and the funding available to them.

Traditional Funding Options

Friends & Family Venture CapitalAngel Investments Bank Loans

Funding Options

$60bb $20bb

Funding Options

$60bb $20bb $20bb

Funding Options

$60bb $20bb $20bb $14bb

Friends & Family

Pro’s Con’s

Quick to attain Potential Losses

Typically hands off Strained Relationships

Angel Investments

Pro’s Con’s

Larger Checks Business Involvement

Sophistication Answering to Someone

Additional Value 90-120 Day Close

91 out of Every 10,000 co’s

Venture Capital

Pro’s Con’s

Large Checks Lost Control

Inside Baseball Heavy Dilution

Earning Handcuffs

4 out of Every 10,000 co’s

Industry Limited

Rarely Seed Stage

Bank Loans

Pro’s Con’s

No Dilution Debt Service Costs

Quick Closing Personally Guaranteed

Rare for Startups

Brick & Mortar Centric

Funding Options

57%$17k

.0091%$230k

.0004%$800k

.016%$145k

Why Are They So Low?

• Geographically & Industry Limited

• Impersonal, Weighted Risk

• Biggest – Restrictions on the Public

Biggest Issue

• It is illegal for the average person to invest in a private company.

• Prohibited by SEC restrictions.

• Millions of Potential Investors Cannot Invest

How Is This Changing?

• Advent of Crowdfunding

• The Passage of the JOBS Act

• Re-Introducing the consumer into the funding process.

What is Crowdfunding?

crowd funding -

the practice of funding a project or venture by raising money from a number of people, typically via the Internet.

Crowdfunding

Pro’s Con’s

Validate Your Business Competitor Exposure

Build Traction

Build Social Proof

Publicity

Gain Investor Interest

No Dilution

Crowd Funding Now

$1.4 BB2011

$2.8 BB

Types of Crowdfunding

Rewards Equity

• Offer pre-orders• Typically raising < $50k• Anyone can back you• No equity dilution

• Offer equity stake in company• Typically raising $50k to $10MM• Accredited investors only.• Must issue stock in company.

The History

History

The Internet

The Legislation

The JOBS Act

Jumpstart Our Small Business Act

Signed into law April 2012 ("the crowdfunding act“)

Aims to decrease barriers to entry for startups

Passed 73-26 in the SenatePassed 380-41 in the House

Two Main Impacts

1. It Removes the Ban on General Solicitation

2. It Gives Most Americans the right to invest in private companies.

General Solicitation

Before: Pitching equity raises could only be done privately to accredited investors or within entrepreneurs' personal, private networks

After:General solicitation of equity raises is permitted.

Effect:Entrepreneurs visible to thousands more investorsMore investment opportunities for everyoneAnyone can own a piece of a company and diversify how they invest

Accredited Investors

Fact:3.4mm N. Americans = accredited investors in 2010

Approximately 233.7mm N. Americans = accredited investors after JOBS Act

The #’s In Perspective

Americans Gambled Over $550 Billion Last Year

American Public Has a Net Worth of $50 Trillion+

What It Does

Will Democratize Funding for Entrepreneurs

Open Up Trillions In New Funding

Will Bridge the Funding Delta

How It Impacts You

Helps more great companies get started and grow, regardless of where they are based.

States Like WV will have a competitive advantage.

Examples of CrowdfundingCompanies Raised Time

Fleksy $900,000 3 Months

Training Mask $20,162 30 Days

3D-Vision $24,878 30 Days

Seeds $25,000 60 Days

Fleksy

• Problem• Solution• Market Size• Traction• Team

BodBot

• Problem• Solution• Market Size• Traction• Team

Start Crowdfunding

- Elevator Pitch & Description

- Funding Goal

- Compelling Rewards

- Profile Visuals

Marketing

- Friends & Family

- Community

- Industry Bloggers & Journalists

- Social Media Networks

It Isn’t Just About Funding

- Market Validation

- Meet Potential Partners

- Invaluable Press

- Social Proof

- Meet Potential Investors

Resources

Eric@Fundable.comLinkedIn: Linkedin.com/in/ericcorlTwitter: @ericcorl

2012 Funding ReviewJOBS Act Infographic

the crowd funding revolution what it is and why it matters

bb slide

cos slide

public slide

crowd funding eric corl

seed stage slide

friends family eric

businesses funding

practice of funding

Documents

the other it crowd - lita annual forum 2010

franz dietrich and christian list what matters and how it...

benq because it matters - cnet content · 2015. 10. 6. ·...

your watershed - it matters!

topics two models of history 7 biblical truths why it...

nfp: why it matters

seo & why it matters

yes, it matters!

bcos- it matters broncheictasis- copd overlap syndrome it...

why it matters!2

marketing matters - solutions property management€¦ ·...

why it matters

thinkfin crowd sourced it research

conclude doha: it matters!

evolution: why it matters

processes - it matters

¿eres una marca?: just crowd it!

it matters

perception matters... it matters a lot!

sell it to the crowd