Introduction to Crowdfunding

Merolla Consulting • Luca Merolla • luca@merollaconsulting.com
Introduction to
Crowdfunding
Luca Merolla

SPEAKER
Luca Merolla
Management, Business & Technology consultant
■ PG Business Certificate in International
Business
■ Master in Business Administration (MBA)
■ Diploma in Managerial Economics
■ Diploma in Management of Technological
Innovation
■ Diploma in Management of Information Systems
■ B.Sc. Information Technology Engineering
linkedin.com/in/lucamerolla
@lucamerolla
facebook.com/luca.merolla
lucamerolla
lucamerolla.wordpress.com
luca.merolla@gmail.com
luca@merollaconsulting.com

INTRODUCTION TO CROWDFUNDING
PART I

TOPICS
Overview
PART I
■ What is crowdfunding?
■ How does it work?
PART II
■ Who can benefit from crowdfunding?
■ Advantages and disadvantages

WHAT IS CROWDFUNDING?
A possible definition of
crowdfunding
"use of online communities to collect capital
from groups of people with common interests in
order to fund a project or an initiative"

History and evolution
○ "Self-made" (Wikipedia - crowdsourcing
and crowdfunding)
○ Crowdfunding platforms (CFPs)
■ Kiva - (2005) - Micro-lending
■ Kickstarter, Indiegogo - 2008 - Reward based
■ GrowVC (2010), Symbid (2011) - Equity based

Innovations introduced compared to
a "self-made" solution
○ integration with social media and social
networks
○ more viable and less expensive
○ simplified bureaucracy
○ experience and know-how of CFPs

CF and its evolution from the web
■ crowd, people get together in groups, associations,
cooperative, etc...
■ proliferation of social media and social network
■ knowledge sharing (ideas, projects, etc...)
■ Make usage of:
○ virtual environments
○ transparency
○ "viral effect"

The importance of the social media
○ transparent communication
○ easy to obtain information on the activity of the
company
○ can reach a high number of contacts at a relatively
"lower cost"
○ maximize the "viral effect"
○ keep the "fans" updated

Different types of CFPs, based on:
■ Business Model
■ Nature of exchange and relations
between investors and entrepreneurs
■ Localization
■ Target (Niche sectors, Generalist, etc...)

The 3 CF models
■ Donation/Reward based
■ Equity based
■ Lending based (micro lending)

Donation/Reward and Equity based are
often divided into 2 sub-categories
■ All or nothing - Pledged money is
collected only if the goal is met.
■ Keep it all - The funds are collected
regardless if the goal is met or not.

Despite the model, CFPs are identified by
the nature of the accepted projects
■ Specialized - for a specific sector (i.e.
SellABand for music)
■ Activity-specific - for different sectors and
industries but focalized on certain kind of
projects (Kickstarter only for creative
projects)
■ Generic - they have no specific restrictions
(start-up, artists, no-profit, etc...)

HOW DOES IT WORK?
CFPs user roles
■ Entrepreneurs - publish the CF projects and
all the relative information
■ Investors - invest/donate money to the CF
projects in order to obtain a monetary or
non-monetary reward

HOW DOES IT WORK?
Common characteristics of CFPs
■ online procedure (almost entirely)
■ time frame limit for the CF campaign
■ limits of national legislation (especially for
equity)
■ rewards (monetary or non-monetary)
■ commissions based business model

HOW DOES IT WORK?
Main advantages of using crowdfunding
platforms
■ community
■ social media integration
■ typically big number of investors/donators
■ reduced costs and bureaucracy
■ useful for pre-sale, test marketing and
eventually pricing strategy
■ feedback and interaction with potential future
customers

HOW DOES IT WORK?
The process for Publishing Projects
■ chose the CFP
■ define the details/aims of the projects
■ set a realistic funding goal
■ set the time limit of the CF campaign
■ define the rewards
■ keep investors/donators informed on the
activities. Provide constant updates to
engage with them
■ loyalty

The investment process for an equity
project
1. user sign up (also with social media profile)
2. chose the project/idea where to invest
3. transfer funds on an electronic wallet (not
always necessary)
4. if the campaign does not reach the funding
goal within the time limit, funds are not
transferred to the entrepreneurs.
HOW DOES IT WORK?

HOW DOES IT WORK?
The investment process for an equity
project
5. if the project reach 100% of the funding goal
the funds are transferred to the company
6. the investors obtain equity shares of the new
company
7. entrepreneur and investors can cooperate
and communicate through the CFP

INTRODUCTION TO CROWDFUNDING
End of
PART I

Introduction to Crowdfunding

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (8)

Similar to Introduction to Crowdfunding

Similar to Introduction to Crowdfunding (20)

More from Luca Merolla

More from Luca Merolla (6)

Recently uploaded

Recently uploaded (20)

Introduction to Crowdfunding