Investing in the Crowd

www.sustaingroup.net I www.sdgp2015.com I [email protected]

Investing in the crowd How can not-for-profits and civil society organisations take advantage of

the rise in crowd funding?

Matthew Tukaki, CEO and Chief Social Investor of the Sustain Group

Twitter: @tukakimatt

http://www.sustaingroup.net/

http://www.sdgp2015.com/


What’s my return on investment for being

here listening to this?

Revenue lines are already under pressure because of pressure on Government funding – the age of austerity

Increase in competition across the civil society and not-for-profit sectors when it comes to the “available” “pot”

Confusion from the consumer end about who to support – who to invest in

The rise of tier 3 and 4 not-for-profits

No likely consolidation in the number of organisations “springing” up who ultimately seek Government funding within the first 12-18 months of operation

Traditional methods work – but as we move more into the online world we need to take advantage of the very social media platforms we ourselves populate with messages


“I need to diversify my revenue

base if I am going to fund the

projects we need investment

for”


About me

I am the CEO and Chief Social Investor of Sustain Group: I am considered to be a

global expert when it comes to sustainable development. He has been active in the

field for many years and has also led project teams dealing specifically with the

evaluation and assessment of social impact across a number of developing countries.

From 2010 until 2013 I was Australia’s Representative to the United Nations Global

Compact and in May of 2013 the Secretary General appointed him to the Global Board

of the UNGC. I have been responsible for leading the reform agendas of a number of not

for profit organisation with a view to building organisational capability, capacity and

resilience. That includes seeking new and creative ways to fund projects, diverse

income away from traditional sources and seeking out new “investors” to help us

deliver to various work programs. I am a businessman who through entrepreneurship

and a sense of innovation is out to make a social difference with firm realisation that in

order to do it we need the money and partnerships to pay for it.


A quick check of the facts around

crowd funding No point in diving into something unless you know the value of the deep

dive!


Well – the facts will amaze you… The global crowd funding market grew 80% to a total of $2.67 billion of funds raised.

Reward based platforms accounted for $1.4 billion or 52% of total funds raised.

The US crowd funding market was $1.6 billion (60%), Europe was $945 million (35%)

while the rest of the world accounted for $125 million (5%).

The number of crowd funding platforms (CFP’s) worldwide grew 17% from 452 to around

530. This growth is slowing as the market matures and will start going negative once

the industry enters a consolidation phase. Once the industry leaders are established

M&A activity starts to increase.

Indiegogo is the No.2 CFP with 0.8% of the total crowd fund market (or 1.3% of rewards

based market).

30% of crowd funding platforms are generalized or broadly focused in terms of the

types of projects hosted.

70% of crowd funding platforms are specialized or tightly focused on specific industries

or niche projects.


Still quite amazed…. Kickstarter received over $319 million of pledges from over 2 million backers for over

40,000 projects.

Over 18,000 Kickstarter projects were successfully funded (44%) raising over $270

million in capital

Only 8% of projects with targets of $100,000 or more were successful (large projects

are very hard)

Pebble Inc who make a wearable computing product raised a new Kickstarter record of

over $10,000,000

Only 17 projects raised $1+ million – that is 0.04% of all projects and 0.09% of all

successful projects (most of these were either in Games, Technology or Design)

Games is the most successful Kickstarter category with $83 million in pledges

(Technology is 2nd)

Music is the most popular category with over 5000 projects (Art, Publishing, Film all

had over 1000 projects)

- See more at: http://sasminstitute.com/crowdfunding-facts/#sthash.rUnxc44N.dpuf


Now … if I asked you for money? Its one thing to jump into the crowd … but, why would people believe me

and want to invest?


If I asked you for money would you give it to

me?

Very rarely will someone part with their hard earned income unless they have

to. People part with money based on:

The additional generation of wealth

The fact they have to because the court “said so”

Emotional attachment – to an issue or a challenge facing a family member or friend

Inherent religious belief

So – if I told you that my dog needed an operation would you help me pay for

it?

If I told you my sick child needed an operation would you help me pay for it?

If I told you I wanted to go out on Friday night and needed to fund said

adventure would you help me out (oh, can I have cab fare as well?)


Things I know!

People are willing to invest if there is an attachment to your story

If there is proof in your existence – and therefore credibility

If there is an obvious endgame and that will produce something for a benefit

-a social benefit primarily

Many people don’t have hundreds of dollars – those willing to invest more

than $100 per project will be rare – therefore the majority will be likely

under $100


Stepping through on activating your

campaign Lets look at some of the key considerations


Step one: develop the product or

initiative you want to have

funded – treat the process as if

you were developing a business

plan or business case for

something completely new…


Step two: “always underestimate what you need

instead of overestimating – remember, a lot of money raised through Crowd Funding will only cover a period in time – remain vigilant around diversification.”


Step three: “understand the

demographic and target market

you want to raise the most from

e.g. test the case of why they

would invest?”


Step four: “what current networks and assets do you have

access to in order to promote this? Do you have a current

social media strategy in place and if so is there a formula for

how to monetise it?”


The basics Its not rocket science


“you need to ensure there is a

market of willing people

wanting to invest, you cannot

assume the market is there”


“You can’t just throw something

onto a crowd funding site and

hope they will come to you – you

need to have a strategic

engagement plan ready to go”


“That plan must include those

you have never interacted with

before, but are indirectly

connected to you through social

and professional media”


“That plan must include those

you have never interacted with

before, but are indirectly

connected to you through social

and professional media”


“Always make sure that the

outcomes are clear and the

timelines involved – there has to

be confidence that through my

social investment the project

will be successful”


Monetising social media

Using Facebook “likes” and “followers” to share your pasts – thereby creating

an additional and indirect market for your crowd funding project

Using Linkedin in the same way – but more targeted to postings in groups

Using Twitter: make sure you have a #tag ready to go – own that #tag! E.g.

getting people to invest into a water project in africa #waterforafrica – own

the tag, get to a point of trending and use the twitterverse as a way of re-

tweeting thereby creating another market or sector

Make sure the campaign is sustained and not just once off


Imagery

Always use imagery that will support your cause as well as stories and

narratives that enable your intended investor audience to buy into it – make

sure it is credible -always use real images and not those sourced from stock

or through a random Google search

A picture will always beat a thousand words


Lets look at

the use of

imagery and

why two

campaigns

that appear

the same end

up raising

different

amounts of

money


Incentivise your investors

Don’t over complicate recognition of an investors contribution – KISS – keep it

simple sam

It could be an honour roll on your website showing recognition

It could be a certificate of thanks – I am a big advocate of provider a social

shareholder certificate in the same way you provide a share certificate when

investing into a company

Incentivise your investors to the point that the cost is minimal allowing

maximum investment into the project outcome itself


But wait there is more! In order

to go through the full workshop

get in touch with

[email protected] and

arrange our Chief Social Investor

to call on your organisation!

mailto:[email protected]


Get in touch …

[email protected] or log onto www.sustaingroup.net

mailto:[email protected]

http://www.sustaingroup.net/

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Investing in the Crowd