With the explosion of sites modeled after Kickstarter and Indiegogo, and talk of U.S. style, equity-based crowdfunding coming to Canada, the time seems ripe for another discussion about crowdfunding and the direction it is taking.
Join us here at ITBusiness.ca for a Twitter chat on crowdfunding, slated for 2:00 PM EST on Thursday, June 27 at the hashtag #itbcrowdfund.
Update – Danae Ringelmann, co-founder of Indiegogo, and Cindy Gordon, national chair of Invest Crowdfund Canada, will be joining us for the discussion to share their thoughts – so feel free to tweet at them too!
If you’re looking for a sample of the kinds of things we’ll be discussing, check out the questions posted below. We’re excited to talk crowdfunding with you and get the discussion going. See you on Twitter!
Update number 2 – Just had our Twitter chat and we really enjoyed hearing from everyone who participated! Thanks to everyone for their insights, especially Danae Ringelmann of Indiegogo and Cindy Gordon of Invest Crowdfund Canada, who were kind enough to agree to come aboard as experts!
In case you missed our chat though, here’s a quick rundown of the things we discussed:
Questions we’ll be covering
1. Have you ever donated to a crowdfunding campaign or started one? What was your experience with that?
We had a few responses to this one from previous campaigners. Leor Grebler, who created the voice-activated, hands-free Ubi computer and then funded it through Kickstarter in 2012, originally aimed for $36,000 and ended up reaching about $230,000. Grebler called his money-raising experience “exhilarating.”
Cindy Gordon of Invest Crowdfund Canada said she also helped run a campaign for raising money for homelessness in Fredericton, N.B., coming up with $5,000 to give homeless people mittens as a quick campaign for the winter.
2. We’ve heard a few cautionary tales about potential scams. Who should be held responsible?
A2 – Obviously any scammers using #crowdfunding must be held accountable, but platforms hosting them also responsible #itbcrowdfund
— Brian Jackson (@brianjjackson) June 27, 2013
@itbusinessca A2: responsibility lies with everyone. The crowd can police, the platform can do due diligence, etc. #itbcrowdfund
— HiveWire (@HiveWireCA) June 27, 2013
Ringelmann also weighed in about some of the safety practices at Indiegogo, put in place to try to avoid fraudulent campaigns. She said as successful campaigns start with raising about 20 to 30 per cent of their funds from people they know, it’s natural to see them use social media to expand their funding circles to friends of friends and then strangers. Indiegogo also uses “trust and safety” algorithms, plus community flagging tools, to gauge whether a campaign looks suspicious.
3. What are some of the things you look for when choosing a campaign to support?
A3 – pt 1 – Great campaigns do 3 things well. 1st: amazing pitch, which includes: video, specific use of funds, & unique perks.#itbcrowdfund
— Danae Ringelmann (@gogoDanae) June 27, 2013
A3 – part 2: 2nd: Proactive sharing. Campaigns that update their funders every 1-5 days, raise 200+% more #itbcrowdfund
— Danae Ringelmann (@gogoDanae) June 27, 2013
@itbusinessca 1) person is sincere 2) it’s not a “store front” campaign 3) for tech, that their aspirations are in check #itbcrowdfund
— Wimoto Technologies (@WimotoTech) June 27, 2013
4. Any guidelines for people looking to start a crowdfunding campaign?
We had a wide variety of answers here, but many people said a great promo video introducing the product and pitching it in an appealing way was key. Also many said they believe it’s important to spend more time preparing for the campaign in advance, even more than the duration of the actual campaign itself.
5. What are the best ways to market a crowdfunding campaign, once it’s out there and launched?
@itbusinessca #itbcrowdfund 1) Tell everyone just before you launch 2) Press releases (we did 100+ in first 5 hours) 3) Use lots of photos
— Leor Grebler, UCIC (@grebler) June 27, 2013
@itbusinessca A5 know where relevant conversation is already happening and try to engage people thoughtfully vs spamming #itbcrowdfunding
— iFundSocial (@iFundSocial) June 27, 2013
@itbusinessca A3 Part 2 – monitor your marketing efforts and be ready to respond to the crowd and change your strategies #itbcrowdfund
— iFundSocial (@iFundSocial) June 27, 2013
@grebler @itbusinessca #itbcrowdfund Implementing multiple collateral engagement approaches is key,a story is impt;consistent messaging hook
— Cindy Gordon (@Helixcommerce) June 27, 2013
A5- a referral program is great at unleashing your funders into sharers. So offer extra perks 2 funders who get you pr. #itbcrowdfund
— Danae Ringelmann (@gogoDanae) June 27, 2013
6. Some say Canada shouldn’t follow after the U.S. with another JOBS Act or equity crowdfunding. Thoughts?
Some people on the Twitter chat were very gung-ho about bringing equity-based crowdfunding to Canada, while others were less sure.
A6: Regulator also wants an efficient market #crowdfunding gives market validation which is KEY! #itbcrowdfund
— HiveWire (@HiveWireCA) June 27, 2013
By contrast, Grebler of Ubi said selling equity is usually in exchange for money and guidance. With so many backers involved in crowdfunding, it is difficult to accept guidance from all of them.
Ringelmann added Indiegogo is waiting on hearing about final regulations from the government. Once those become more clear, Indiegogo will be checking back with its customers to see if they’d want the option of equity crowdfunding, she said.
7. With so many different crowdfunding sites popping up, what will the crowdfunding industry look like in a few years?
@itbusinessca #itbcrowdfund It’s going to get tough for the small guy to make it. Larger players will be coming in with bigger promotions.
— Leor Grebler, UCIC (@grebler) June 27, 2013
A8 – I think you’ll see crowdfunding sites that hone a niche well succeed, aggregators will pop up to list from multiple sites #itbcrowdfund
— Brian Jackson (@brianjjackson) June 27, 2013
A6 – The platforms that survive will be the ones that meet the needs of their customers the best. #itbcrowdfund
— Danae Ringelmann (@gogoDanae) June 27, 2013
8. What role do you feel crowdfunding will play in the future?
@itbusinessca #itbcrowdfund Crowdfunding will significantly reduce the risk for small startups. They will validate market interest.
— Leor Grebler, UCIC (@grebler) June 27, 2013
A9 pt 2: Traditional financiers will use CF to discover ideas. So there will be equal opportunity for path to discovery #itbcrowdfund
— Danae Ringelmann (@gogoDanae) June 27, 2013
@itbusinessca #itbcrowdfund A9: #crowdfunding is just part of the growing “participation” trend, along with #crowdsourcing. MORE to come!
— HiveWire (@HiveWireCA) June 27, 2013
