Presentation at Skovde Business Week in Sweden in Oct 2015, http://skovdebusinessweek.se/

1. Crowdfunding
-------
New forms of financing
ROBIN TEIGLAND & CLAIRE INGRAM
STOCKHOLM SCHOOL OF ECONOMICS
OCTOBER 2015
ROBIN.TEIGLAND@HHS.SE

2. Banking is essential,
but banks are not.
Bill Gates

3. The FinTech space is growing….
Tech
Big Data
IoT
Internet
Infrastructure
Mobile
Technology
OpenAPI
Artificial
Intelligence
Cloud
Robotics
Bitcoin
protocol
Private
banking
Fin
Commercial
banking
Investment
banking
Securities
Asset
Management
Insurance
Fraud
Algorithms
FinTech
Payments
Raising funds
Virtual currencies
Advice
Foreign
exchange
Real estate
3

4. FinTech in Stockholm
Company Founded Business
Klarna 2005 E-commerce payment services
MyLoan 2006 Loan broker
Trustly 2008 Online payments
TrustBuddy 2009 P2P lending
iZettle 2010 Mobile payments
FundedByMe 2011 Crowdfunding, crowd equity
Kivra 2011 Digital mailbox
Tink 2012 Personal finance
Safello 2013 Cryptocurrency exchange
KnCMiner 2013 Cryptocurrency mining equipment
Toborrow 2013 P2P lending for companies
Cryex 2014 Cryptocurrency clearing house

5. Local Stockholm success story:
Flippin’ Burgers
Money raised:
SEK 36,502 /
€4,000
Number of
investors: 186
Date funded:
September 2011
Sector: Food

6. Enabling local, small-scale solutions
http://travel.cnn.com/best-americana-restaurants-europe-023346

8. What is crowdfunding?
Accumulation of small investments in individual
projects by large number of individuals (the
“crowd”) via or with help of Internet and social
networks (De Buysere et al., 2012)
Picture: FundedByMe

9. Crowdfunding is enabled through peer-to-peer (P2P)
transactions on multi-sided Platforms (MSPs)
http://sloanreview.mit.edu/article/strategic-decisions-for-multisided-platforms/

10. A system that activates the untapped value of
all kinds of assets through models and
marketplaces that enable greater efficiency
and access.
- Botsman
The Sharing Economy
Harvard Business Review, 2014
The Sharing Economy: Embracing Change with Caution
http://www.slideshare.net/eteigland/sharing-economy-webb

11. Four forms of crowdfunding
Form Benefits for funders
Donation-
based
Donation Intangible benefits.
Reward-based
Donation or pre-
purchase
Rewards in addition to intangible
benefits.
Equity-based Investment
Return on investment if company
does well. Rewards sometimes also
offered and intangible benefits may
motivate too.
Debt-based Loan
Repayment of loan with interest.
Alternatively intangible benefits if
loan given interest-free.
Ingram & Teigland 2013

12. Crowdfunding across the EU

13. Crowdfunding growth 2012-2015
USD 34 bln E

14. How big can crowdfunding be?
By 2025 global crowdfunding could reach
USD 90 to 96 bln
1.8 times today’s global VC industry)
Growth potential greatest in emerging
markets?
USD 50 bln in China by 2025?

15. P2B lending in Sweden

16. Toborrow.se

17. Crowd equity

19. Ingram & Teigland 2013
Why crowdfund?
Difficulty in raising funds from traditional sources
Test market or establish user base
Marketing & publicity for your product or service
Faster time to market
Funding (may not be large amount of money though)
Screening device for investors
Access greater pool of investors: further afield or
people without right “connections”
Skills, connections, and other resources?

20. For all ages - including teenagers
http://www.indiegogo.com/projects/afripreneurs-and-the-leapfrog-effect

21. Measuring demand in advance

22. “It’s not just about the money.”
685 people talking
about product on
social media
Australia’s “Major Disaster Department”
World’s largest telecom

24. One step in the financing chain

25. Nesta

26. How to succeed?
Choose right platform– and crowdfunding form
Going global or local?
What do you give in return (thank you, reward, pre-
purchase, shares)?
Keep in mind platform fees
Define the concept
Make it easily understood
Make it personal?
Feed the crowd
Ensure initial critical mass (social media, newspapers)
Keep followers up to date
MAGIC

27. http://www.slideshare.net/eteigland/crowdfunding-in-sweden

28. Robin Teigland
robin.teigland@hhs.se
www.slideshare.net/eteigland
@RobinTeigland
If you love knowledge, set it free…
If you like this presentation and would like to contribute to our research, we
accept bitcoins: 14hs4JbnQLXE87GGzu84uXGaspmxmnLpwC.
Thank you!!!!!

29. Appendix

30. Who are the funders?
Educated experts(?)
University degree
Knowledge and previous experience in same field
“In-crowd”
“Entrepreneurs”
Risk lovers
Skoglund & Stiernblad 2013

31. Who are the funders?
Educated experts(?)
85% respondents have university degree (vs 16%
women/22% men in general population, 2013)
42% had knowledge in same field as project they
funded
49% reported to have been better at judging project
quality due to previous experience
“In-crowd”
47% of “the crowd” classified themselves as
entrepreneurs – compared to only 7% of Swedish
population (2012)
77% never bought shares in unlisted company before
41% risk loversSkoglund & Stiernblad 2013

33. http://www.fundable.com/blog/crowdfunding-infographic---the-jobs-act-explained

34. Going global? Going local?
Reward-based? l Niche product or
service?
l Global appeal?
l What are rewards?
l How do you reach
international audience –
and stand out?
l Community-specific
product or service?
l Local appeal?
l What are rewards?
l Does community know
about you – can you
reach them?
l Local benefits
Equity-based? l Looking to scale up?
l How much equity?
l How to value your
project?
l Looking to establish
foothold?
l How much equity?
l How to value your
project?
l Local benefits –
experience, connections
etc?
Lots to think about....

35. Trends in crowdfunding
Peer to peer lending
Niche
Community
Hybrid platforms
Enterprise sponsored
Internal corporate crowdfunding
LIVE!
Economic development
Celebrities
…

36. Crowdfunding for research

37. Strategic partnership
+

38. Celebrities entering the scene
Executive Producer Robert Redford
Narrated by Jodie Foster
Donald Trump’s crowdfunding site
Open to anyone

39. Internal corporate crowdfunding
iFundIT
More than 300 participants
Entry-level workers to VPs
Given $2,000 to invest over 8 week period
Choose internal projects in which to invest

40. Enabling entrepreneurs anywhere
Ushahidi of Kenya
Kenya

41. Venture capitalists are the
travel agents of yesterday –
here today, gone tomorrow.
Venture capitalist
in Silicon Valley –
June 2013

42. What’s next?