Crowdfunding 101 for Farms & Food-Based Businesses
•
0 likes•2,755 views
What is crowdfunding, anyway? This umbrella term refers to a number of innovative fundraising techniques – online and otherwise – in which you raise small amounts of money from a large number of people, and many of these models can be helpful for farms and farm-based businesses. In this session we’ll cover the many forms of crowdfunding – including online fundraising platforms (such as Kickstarter and IndieGoGo), peer-to-peer lending, community supported pre-sales models (such as CSAs, subscription offerings and gift certificates), direct public offerings (DPOs), and more. Come away with a basic understanding of how the different forms of crowdfunding work, the laws that apply in each case, which crowdfunding opportunities might be a good fit for your own unique situation, and tips for success. Presented by Elizabeth Ü at PASA's 23rd Annual Farming for the Future Conference: Letting Nature Lead. State College, PA. February 7, 2014
Recommended
Recommended
More Related Content
Recently uploaded
Recently uploaded (20)
Featured
Featured (20)
Crowdfunding 101 for Farms & Food-Based Businesses
- 1. Crowdfunding 101: Understanding the Many Forms of Fundraising from the Masses Elizabeth Ü Founder & ExecuAve Director, Finance for Food Author, Raising Dough: the Complete Guide to Financing a Socially Responsible Food Business PASA’s Farming for the Future Conference February 7, 2014 in State College, PA
- 3. Peer-‐to-‐Peer Lending Small dollars Millions $$$ Inexpensive Expensive Quick Takes more Ame LiRle paperwork Lots of paperwork Do it yourself Requires professional help Easy to manage Care and feeding over Ame Good for introverts Takes community organizing Lower credit score OK Good credit required www.financeforfood.com
- 4. Peer-‐to-‐Peer Lending Plaorms www.financeforfood.com
- 6. Kiva Zip Trustees in PA www.financeforfood.com
- 7. Online Fundraising Plaorms www.financeforfood.com
- 8. Online Crowdfunding Small dollars Millions $$$ Inexpensive Expensive Quick Takes more Ame LiRle paperwork Lots of paperwork Do it yourself Requires professional help Easy to manage Care and feeding over Ame Good for introverts Takes community organizing Lower credit score OK Good credit required www.financeforfood.com
- 9. Helpful to Have… • • • • • • A retail business Lots of customers that know and love you A mailing list / e-‐newsleRer ConnecAons to tradiAonal media Social media savvy + lots of followers & “likes” Someone who can focus on campaign full Ame www.financeforfood.com
- 10. Crowdfunding: 3 Different Types! 1. SoliciAng gigs 2. Pre-‐selling / Community Supported models 3. Selling securi'es to a large number of investors who expect a financial return www.financeforfood.com
- 11. 2 Crowdfunding Models 1. All-‐or-‐Nothing (eg, Kickstarter) – – – “Risk” Less expensive More moAvaAng 2. Keep What You Raise – – – Less risky PotenAal laziness Graveyard of sorry projects? www.financeforfood.com
- 12. Crowdfunding: 3 Different Types! 1. SoliciAng gigs 2. Pre-‐selling / Community Supported models 3. Selling securi'es to a large number of investors who expect a financial return www.financeforfood.com
- 13. Design your reward scheme www.financeforfood.com
- 14. EnAce Backers with Rewards Primal Pastures Farm’s reward scheme: • $5+ à “Thank You” • $15-‐50+ à Name on Founder’s Wall, doodads • $75+ à “Local Pack” (doodads + meat & eggs… or just the non-‐perishables) • $110+ à Apron • $250+ à Year’s supply of chicken www.financeforfood.com
- 15. Get CreaAve! More Primal Pastures Farm rewards: • $350+ à Doodads + farm tour • $500+ à Doodads + Mentor Day • $1200+ à Breakfast on the Farm • $5000+ à Golden Egg: Own flock of chickens Limited ediAon or first-‐come-‐first-‐save rewards www.financeforfood.com
- 16. Gig Raising – CauAons • Easier for nonprofits or groups of farmers working together • Beware “crowdfunding faAgue” • Gig Taxes: $14k max per person per year before giver owes taxes • Make sure you will make money! www.financeforfood.com
- 17. Community Supported Models www.financeforfood.com
- 18. Crowdfunding: 3 Different Types! 1. SoliciAng gigs 2. Pre-‐selling / Community Supported models 3. Selling securi'es to a large number of investors who expect a financial return www.financeforfood.com
- 21. Pre-‐Selling Online –Rewards • Single products • Product packs • Product line subscripAons • CSA memberships www.financeforfood.com
- 22. Pre-‐Selling Online – Reward Tips • Offer discounts to early backers • Consider rewards relevant to your wholesale customers • Set appropriate pricing • Take delivery costs into consideraAon www.financeforfood.com
- 23. Pre-‐Selling Online – CauAons • Note your state’s laws around gig cerAficates • Cash flow consideraAons – Stagger start dates – Offer discount on total purchase instead of straight gig cerAficates • Make sure you will make money! www.financeforfood.com
- 24. How Much Can You Raise? www.financeforfood.com
- 25. How Much Can You Raise? www.financeforfood.com
- 26. Asking the Public for Loans www.financeforfood.com
- 27. Crowdfunding: 3 Different Types! 1. SoliciAng gigs 2. Pre-‐selling / Community Supported models 3. Selling securi'es to a large number of investors who expect a financial return www.financeforfood.com
- 28. Direct Public Offerings Small dollars Millions $$$ Inexpensive Expensive Quick Takes more Ame LiRle paperwork Lots of paperwork Do it yourself Requires professional help Easy to manage Care and feeding over Ame Good for introverts Takes community organizing Lower credit score OK Good credit required www.financeforfood.com
- 29. Direct Public Offerings (DPOs) • Not a form of security; it’s a way for a company to offer a security www.financeforfood.com
- 30. Equity Financing Small dollars Millions $$$ Inexpensive Expensive Quick Takes more Ame LiRle paperwork Lots of paperwork Do it yourself Requires professional help Easy to manage Care and feeding over Ame Good for introverts Takes community organizing Lower credit score OK Good credit required www.financeforfood.com
- 31. Equity Financing • You sell stock in your company. Investors become shareholders, and they want their money back at some point. • …they usually also want some control over how you run the company in the meanAme. www.financeforfood.com
- 32. Equity InnovaAons • Non-‐voAng preferred stock • Stock doesn’t appreciate in value as company grows • Investors receive fixed dividend www.financeforfood.com
- 33. Pop Quiz! What are the 3 Different Types of Crowdfunding? www.financeforfood.com
- 34. Pop Quiz! What are the 3 Different Types of Crowdfunding? 1. SoliciAng gigs 2. Pre-‐selling 3. Selling securiAes www.financeforfood.com
- 35. What Worked / Didn’t Work for You? QuesAons? elizabeth@ financeforfood.com 415.891.9194 @foodfinance