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CROWD FUNDING
ABOUT EXTREME
Since 2014, we have created several brands; two in the crowd-funding space
CrowdMatrix - Angel Investing Portal
• Online, secure platform which connects technology startups with savvy and accredited investors
• A full-featured multi-role, multi-permission, audited, secure portal
CrowdFind - Analytics for Crowdfunding
• An analytics platform tracking tens of thousands of crowd-funding campaigns daily
• Tens of thousands of projects cataloged daily; millions of data points
What is Crowd Funding?
Enthusiasts and early adopters buy your product before it’s in the market place or even produced.
Investors buy shares in your company in exchange for cash.
Enthusiasts and early adopters buy your product before it’s in the market place or even produced.
Investors buy shares in your company in exchange for cash.
Creditors lend money to you or your company
Enthusiasts and early adopters buy your product before it’s in the market place or even produced.
Investors buy shares in your company in exchange for cash.
Creditors lend money to you or your company
Donors contribute to your cause
Enthusiasts and early adopters buy your product before it’s in the market place or even produced.
https://www.kickstarter.com/year/2014/datahttp://insights.wired.com/profiles/blogs/crowdfunding-statistics-analytics-for-film-video-in-2014#axzz3VP62VFYD
C D
https://angel.co/2014/investing
$529MM pledged towards 22,252 projects in 2014
https://www.kickstarter.com/year/2014/datahttp://insights.wired.com/profiles/blogs/crowdfunding-statistics-analytics-for-film-video-in-2014#axzz3VP62VFYD
C D
https://angel.co/2014/investing
$529MM pledged towards 22,252 projects in 2014
Just under $100MM in US only
https://www.kickstarter.com/year/2014/datahttp://insights.wired.com/profiles/blogs/crowdfunding-statistics-analytics-for-film-video-in-2014#axzz3VP62VFYD
C D
https://angel.co/2014/investing
$529MM pledged towards 22,252 projects in 2014
Just under $100MM in US only
https://www.kickstarter.com/year/2014/datahttp://insights.wired.com/profiles/blogs/crowdfunding-statistics-analytics-for-film-video-in-2014#axzz3VP62VFYD
Over $100MM raised by 243 startups from 2,673 investors
On average that is:
$400k per startup
$40k per investor
C D
https://angel.co/2014/investing
How To Leverage Crowd Funding
Market Research
Anonabox Router - 2014
Raised $600,000 in only 5 day
Shows the latent unmet demand in the market place for an anonymity and privacy online
Despite being banned by Kickstarter due to technical issues, this campaign’s engagement with potential clients is a clear indication for a market opportunity in this field.
Drones Drones Drones
5 drone projects raised over $5.6MM
Drones Drones Drones
v
Pre Selling
Pre-sell
Don’t set up manufacturing facilities before you have sold…
Don’t hire a development team before you have sold…
Don’t buy raw material before you have sold…
…the to-be finished product to paying customers.
v
Pebble Watch
In 2012, a Waterloo startup sold a
record-breaking $10MM on Kickstarter,
making crowd funding a popular
concept.
In 2015, Pebble Watch, raised the same amount in just over a day!
Financing
Traditional
Traditional
• Friends & Family
Most startups fail…
do you really want to risk your loved ones’ savings?
Traditional
• Friends & Family
Most startups fail…
do you really want to risk your loved ones’ savings?
• Angels, VCs, Private Equity, hedgefunds, etc etc
Access to capital can be very challenging early on
Accredited Angels Investors
• Individuals with financial assets over $1MM
• net worth over $5MM
• or income of over $200,000 per year ($300,000 combined with spouse)
• A wave of online tools are making it easier to connect with this kind of investor
Accredited Angels Investors
• Individuals with financial assets over $1MM
• net worth over $5MM
• or income of over $200,000 per year ($300,000 combined with spouse)
• A wave of online tools are making it easier to connect with this kind of investor
True Crowd Funding
• Pending regulatory approvals in most jurisdictions
• Proposed regulation in Ontario
• Startups can only raise up to $1.5M in any 12 month period
• Individuals may only invest up to $2,500/deal, capped at $10,000 per year
Equity Crowdfunding
Even a small fraction of a percentage would make billions of dollars available for startups…
… dwarfing the current Venture Capital investments in Canada ($1.9bn in 2014)
0.2% $13 bn
$6.4 Trillion
$32 bn
$64 bn
0.5%
1.0%
Canadian HouseholdNet Worth
Shift toinvestment
crowdfinance
Bringing It All Together
Crowd funded its seed round in 2013 on OurCrowd, raising $375,000.
Launched product on Kickstarter selling over $2.7MM in 2014.
Follow-on equity financing on OurCrowd in 2014, raised over 3.3MM within two weeks.
In summary…
• Take advantage of crowd funding…
• To identify and validate a market need, and…
• To make money selling before you spend money making, and…
• To find investors and investments which will super-charge your business.
VCs leverage crowd funding campaigns to make investment decisions
