Understand what is crowdfunding, what are the best practices, what to take under consideration when developing a crowdfunding campaign and why is this important!

1. Kristina Kapanova 2012

2. CROWDFUNDING is specific type of
crowdsourcing where creators raise funds through
crowdfunding platforms.
The objective is “the financing of a project of a
venture by a group of individual instead of
professional parties” (Larralde,B., Schwienbacher, A.
2010).
Crowdfunding occurs without any intermediary:
artists/entrepreneurs approach the crowd to raise
money directly from individuals
“The audience, now more than ever, can directly put
their money where their preferences lie, instead of
relying on an institution to make decisions for them.”

3. JOACHIM HEMER in his paper "A snapshot on
Crowdfunding“ identifies several types of
crowdfunding:
1. Crowd donation – altruistic donation, where the
donor expects nothing in return.
2. Crowd Sponsoring – the entrepreneur and the
donator agree on a predetermined reward the
former one is to give the sponsor after completion
of the project.
3. Crowd preselling – through crowdfunding
something is to be produced – book, movie,
music, product or software, etc. The rewards is
early delivery of the produced product.
4. Crowd Lending – the investor lends money to the Hemer, Joachim, (2011), A snapshot on
entrepreneur and expects to receive his lending crowdfunding, No R2/2011, Working
money and any possible interest . Papers "Firms and Region", Fraunhofer
5. Crowd Equity – crowdfunder invest in shares in a Institute for Systems and Innovation
venture, receiving dividends, voting rights, etc. Research (ISI)

4. 1. Raise funding bypassing the 8. Direct access to audience
traditional channels. 9. New aspects of the relationship
2. Involving people during the early between artist and audience
stages of development – engages 10. Through Crowdfunding you can test,
supporters. promote and market the product.
3. Raise awareness for the 11. Your funders become your most
work/product. active advertisers.
4. Retain full creative control
5. Keep 100% copyright.
6. Choice and flexibility
7. Gain better understanding of
consumers’ tastes.

5. Kikstarter IndieGoGo Rockethub
The biggest crowdfunding For funding projects in the creative For funding projects in the
platform. fields – from photography, film, creative fields – from
For funding projects in the creative publishing to technology. photography, film, publishing to
fields – from photography, film, You can choose between Fixed or technology.
publishing to technology. Flexible funding. With fixed, you After the project deadline has
Your campaign needs to be receive the funding only if the passed, you can keep all the
successful in order to keep the campaign was successful, while raised funds.
funds. with flexible, you keep whatever Rockethub has also crowdfunding
have been raised. section for science projects.

6. Music Non-Profit Equity Platforms
Crowdfunding Platforms, allowing Crowdfunding platforms that try to help Equity crowdfunding will allow
musicians to raise money to social entrepreneurs change the world. entrepreneurs to sell shares
produce, record ,distribute their Kiva - people make charitable, interest- directly to investors.
music, make concerts, etc. free loans to entrepreneurs from After the passing of JOBS act,
SelllABand – complete flexibility in developing countries many equity crowdfunding
funding plans, no right holding 33needs: for social enterprises platforms are expected to launch
ArtistShare – have to be approved, Advert Activist-U.K.-based platform that in the near future.
not clear funding model helps fund advertising campaigns for
PledgeMusic – All or Nothing funding social causes.

8. 1. How much money do you want to
raise?
2. How many days do you need and
when do you want to run your
campaign?
3. What platform do you want to run
your campaign on?
4. What is the fee of the crowdfunding
platform, if you use one
5. What is the transaction fee from you
financial institution
6. What is the cost of your perks
including production and shipping

9. When choosing a crowdfunding platform –
be aware of its strengths and weaknesses.
Benchmark your project against similar
campaigns in your chosen category.
Take advantage from advice from other
crowdfunders – their insight is invaluable.
Build clear and strong call to action. Create a
sense of urgency around your campaign.
Establish early on what makes your product
unique and compelling enough that people
would want to put their money into it!

10. Understand your target audience How often are you posting updates?
Generally your pitch will consists of: Video and Can backers easy and successfully share your project
Written Introduction. to their social networks?
Decide on the type of approach you will take to Do you have clear and exciting reward tier? Are they
introduce your message - humorous, serious, quirky, various tier levels backers to choose from?
imaginative, straightforward, etc.
Would you develop a website/blog for the project
Test how easy it is to read your proposal and whether where you can post updates, relevant information,
all the key details and features are described. etc.
Is the pitch confusing or easy to grasp even if the
backer is skimming your message?
Decide on the advertising and marketing activities to
promote your project. What are the most suitable
social media channels to be utilized?
Reference: Steinberg,S.DeMaria,R. Kimmich,J. Migicovsky,E. (2012)The Crowdfunding Bible:
How to Raise Money for Any Startup, Video Game or Project. READ.ME

12. Email
kkapanova@gmail.com
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Twitter
@k_kapanova
Google+
Kristina Kapanova
Blog
www.sfkpublishing.com/blog