Crowdfunding_Concept and Applications 2_EDU.pptx

Crowdfunding

1. CROWDFUNDING: CONCEPTS AND APPLICATIONS 2 PROFESSOR DR. MD. AMINUL ISLAM VISITING PROFESSOR EAST DELTA UNIVERSITY aminsazea @gmail. com WhatsApp: [phone] MY YOUTUBE CHANNEL: PLATFORM FOR RESEARCH AND DEVELOPMENT https://www.youtube.com/@ProfAminulIslam

2. Take Aways from the previous slides Using Video Campaign Starting with a Strong Team Ensuring that the Proposal is Written in Good English. Proofreading is the key here. “The First Impression is the Last Impression”. Creating stronger impact at the beginning with coordinated efforts and justified appeal. Using a good model (Female seemed to be working better)

3. The Challenge - The Mobile Revolution :: Mobile Social Interaction and sharing is the new deal Learning from the customer is crucial Social Networks are crucial for information distribution Traditional Users and developers still keep one foot in the non-mobile world A site must also work on a traditional desktop with mouse Many users do not appreciate too fast changes Smartphone users are more eager to find content fast Apps must be functional, simple and elegant Multi platform usage is preferable Changes Moving from desktops and laptops to smartphones is a challenge Responsive Web Design is used for many screen sizes Web sites must conform to both touch and non-touch screens

4. The Live Site Experiment :: Crowd Navigator Blogging with Wordpress Social media interaction Responsive Web Design Cross-platform coding with HTML & JavaScript Smartphone look PC browser look

5. How does crowdfunding work? The basic principle is that you set a target sum to raise and a timeframe within which to do it. You then place your project on a publicly available platform and encourage people to visit the page through an active and planned outreach program using tools like social media and email.

6. How does crowdfunding work? The intention is to appeal to as many of these visitors as possible so that they contribute funds to your project and share this news with their own network. You collect the financial pledges made with the intention of reaching the target set.

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9. Crowdfunding around the World

10. Crowdfunding around the world The crowdfunding industry keeps growing fast—the fastest in Asia, with 210 percent year on year growth ( Massolution 2019), driven by countries such as China (estimated between US$60 billion and US$100 billion), India (US$27.8 million), The Philippines (US$26.9 million), and Nepal (US$25.5 million) (Allied Crowds 2016). In Africa, crowdfunding platforms raised US$37.2 million in 2019 in Kenya, Rwanda, Tanzania, and Uganda (Allied Crowds 2019b).

11. CROWDFUNDING IN MALAYSIA

12. OVERVIEW OF CROWDFUNDING IN MALAYSIA The Malaysian crowdfunding industry is young.  It first made news in  2015 . The Deputy Finance Minister announced that 6 companies were approved by the SC Malaysia and could now provide crowdfunding services under the Bill regulating this niche.  Since that time,  RM199 million  have been raised benefiting  150  issuers through  159  campaigns. In the aftermath of the COVID-19 pandemic, the SC Malaysia took measures  to increase the investment demand on the alternative market s: granting of a limited tax deduction to individuals for amounts invested in ECF ventures the upper limit for ECF fundraising was increased to  RM10 million Companies with up to  10 million  paid-up capital got access to the crowdfunding market A secondary trading framework (secondary market) for ECF and P2P backers was launched to create exit opportunities for backers

13. OVERVIEW OF CROWDFUNDING IN MALAYSIA As a result,  RM631.04   million  were raised by issuers on ECF and P2P financing platforms in  2020  (to compare, in  2019, RM441.56 million  were raised. The regulator reports that  57%  were raised for business expansion while  97%  of financing issuers raised funds for working capital. Also, in  2020,  issuers shifted towards larger fundraising amounts, with  84%  of campaigns raised beyond  RM500,000 mark.  Speaking about p2p financing, since  2017, 2,801  issuers managed to raise a total of  RM1.14  billion through  15,862  successful campaigns,  77%  of which involved shorter-term financing.

14. TOP MALAYSIAN CROWDFUNDING COMPANIES To help you better research the Malaysian market and define your competition in a particular niche or business model, we’ve gathered a few crowdfunding platforms there. Check out the most popular crowdfunding companies from Malaysia. CapBay  – a crowd lending company, the provider of p2p business loans to businesses of all sizes who can obtain short-term financing and banks and investors who want to participate in high-quality financing deals. Funding Societies Malaysia   – another company operating in the area of business lending. The company supports SME owners  by providing access to funding from individual and institutional investors. pitchIN  is a registered operator in Malaysia offering companies to raise funds from the general public and investment community. MyStartr  is the leading fundraiser for creative projects in Malaysia.  GiveMy  is the online fundraiser helping educational projects get the necessary funding.

15. TOP MALAYSIAN CROWDFUNDING COMPANIES Ethis Group  – an Islamic equity crowdfunding company operating in several markets (Indonesia, Malaysia, and Dubai). The company brings entrepreneurs and the community of investors together.  Ata Plus  is a blockchain enhanced Equity Crowdfunding online platform matching world-class businesses and investors. Crowdo  –  a digital financial solutions platform powered by Neobank technology for SMEs in emerging markets. Eureeca  is a multi-regulated equity crowdfunding platform offering high-yield potential investment opportunities from the Middle East, Europe, and Southeast Asia. Fundnel  is operating as a private investment platform leveraging technology and data for new opportunities in growth & pre-IPO companies.

16. CROWDFUNDING REGULATIONS IN MALAYSIA There are guidelines and requirements for different market players including investors, issuers and platforms. Here’s a brief overview of the rules that Malaysian crowdfunding platforms and other players are expected to follow and be aware of: Platforms should: operate in a fair and transparent manner manage risks associated with crowdfunding activity protect investors and their interests make sure there are necessary people, tech and capital resources allowing platforms to act as middlemen control the fundraising and investing limits

17. CROWDFUNDING REGULATIONS IN MALAYSIA There are guidelines and requirements for different market players including investors, issuers and platforms. Here’s a brief overview of the rules that Malaysian crowdfunding platforms and other players are expected to follow and be aware of: Issuers should: comply with the registration rules raise up to  RM3 million  within a  12-month  period, the total maximum amount of funds raised is  RM10 million disclose business and financial information not advertise their offerings except through the crowdfunding platform

18. CROWDFUNDING REGULATIONS IN MALAYSIA There are guidelines and requirements for different market players including investors, issuers and platforms. Here’s a brief overview of the rules that Malaysian crowdfunding platforms and other players are expected to follow and be aware of: Investors should: comply with the investment limits, they’re different for different types of backers: sophisticated (no limit), angel (max –  RM500,000  within a  12-month  period;), individuals (max –  RM5,000  per issuer) The SC Malaysia regulates P2P financing platform operators by registering them as Recognised Market Operators. Regarding the regulatory environment in Malaysia , the majority ( 80% ) of platforms reported that the current regulation was adequate and appropriate.

19. GLOBAL CROWDFUNDING PLATFORMS

20. Choose your platform

21. Choose your platform Each will have their own processes for setting up – but you’ll basically need to have username and password and then you can get started. US based ones such as Kickstarter and Indiegogo , most well known with vast international audiences. There are few UK based like Buzzbank , or Spacehive .

22. Choose your platform IndieGogo is Open to any kind of project, anywhere in the world. IndieGogo offers a lot of tools and support to track your project. It’s also helpful in that it offers the opportunity to keep money raised from campaigns that do not reach their goal. Smooth integration into social media and individual websites and a robust set of analytics tools to track your progress round out its benefits. Fees: IndieGogo features two funding plans: • Flexible. 4% if you meet goal, 9% if you don’t, but you keep your money in either case. • Fixed. 4% if you meet goal, no fees if you don’t and you get nothing in the latter case – donations are returned to contributors. Goals: Flexible or fixed plan. In flexible, you get whatever you earn. Fixed, meet goal or nothing, but you can keep anything you earn past the goal.

23. Choose your platform Kickstarter is the biggest of the crowdfunding sites . It has raised approximately $100 million in funding in 2011, and is on-track to raise upwards of $250 million or more in 2012. Kickstarter is open to any kind of project, anywhere in the world – but although anyone can be a funder, to create a campaign, you must have a U.S. presence and, theoretically, tax ID. Approval is required to launch campaign. Kickstarter provides many levels of support from the time you begin developing your campaign until after it is completed. The site offers smooth integration into social media and individual websites, great online help, an analytics dashboard that helps you track your project progress and see where your pledges are coming from, and a post-campaign survey tool. Goals: Meet goal or get nothing. You can keep anything over your goal, though fees still apply

24. Choose your platform Kickstarter  charges a 5% fee from the project’s funding total if it is successful, as well as an additional 3-5% for payment processing. (Tip: set your project goal to include these additional costs). The fees are 5% of the cost of the project (before any additional fees are added). If projects fail to raise the money they need, there are no charges. All fees are calculated automatically and are built into the total project cost. Fees are transparently displayed both in the Project Promoter's dashboard and in the "costings tab" on each project page.

25. Choose your platform GoFundMe Monthly Traffic Estimate: 2.3M US. Funding: You will get the funds earned for projects, regardless of whether the project reaches its goal. Fees: Free to sign up. 7.9% + $0.30 per donation [5% (GoFundMe)] + [2.9% (Stripe) + 0.30Euros/donation] or 9.25% total fee for non-profit projects. Categories: National News & Events, Accidents & Emergencies, Animals & Pets, Babies, Kids, Family, Business, Celebrations, Community, Competitions, Creative Arts, Dreams, Education, Funerals, Medical, Missions, Non-Profits, Charities, Sports, Travel, Volunteer, and Weddings. Project Duration: No deadlines unless you choose an All-or-Nothing campaign.

26. Choose your platform Spacehive Spacehive’s founder describes it as “an online funding platform for neighborhood improvement projects” – and primarily for those based in England at that. Approval is required to launch a campaign. Fees: Scale with size of project. Money is in English Pounds. Goals: Meet goal or get nothing. You can’t earn more than the goal you set.

27. Choose your platform Ulule European/international focus, default funding in Euros, but supports other currency options. Also focused on projects that are “for the betterment of society.” People can additionally “like” projects and the number of likes is displayed with the project listing. Approval required to launch a project. Fees: 5% on funded projects plus 3.4% commission to PayPal and $0.25 per transaction. No charges for projects that are not fully funded. Goals: Meet goal or get nothing. You can earn an unlimited amount past the initial goal.

28. Choose your platform Crowdcube Based in the United Kingdom, serves as a platform for small investments in UK businesses and startups. Each project runs for 90 days. Equity in the company is given in exchange for donations. Incentive rewards are also recommended. Must be 18 or older and be legally able to create a UK based limited company to utilize. Fees: £250 (currently waived) plus 5% of realized goal. Also £1750 in legal fees. No charges if the project fails to meet its goal. Goals: Minimum £10,000 goal. No maximum. All or nothing

29. Choose your platform 33Needs This crowdfunding service differs in several ways from other crowdfunding sites. Its primary strength comes in the form of profit sharing: In exchange for donations, backers are promised a percentage of profits for a set amount of time. This is especially relevant to entrepreneurs starting new ventures who are willing to share profits with backers (Equity Crowdfunding) , who are betting on the project’s success and end up with a strong stake in the outcome. The focus is on business startups as opposed to other sites, which tend to be more project-oriented. Fees: 5% plus transaction fees. Goals: All or nothing. Can earn more than goal .

30. Prons and Cons of Platform

31. What can I fundraise for? Pilot projects Capital projects Equipment Feasibility Studies Community events Temporary uses Festivals

32. Why is crowdfunding growing? Making a public call to fundraise from the crowd is not a new idea but crowdfunding as we now understand it has grown very quickly for a number of reasons since its emergence in the 1990s. These include: Technological developments - The emergence of wide and low-cost access to the internet and communication tools like social media mean it is easier and cheaper for us to reach out to much more widely dispersed and larger groups of people. Societal changes - These technical changes have also empowered us to take on new activities which were once controlled by gatekeepers. We can see this in the was people write and publish books, publish music, writing blogs, and the general sharing of our lives online.

33. Why is crowdfunding growing?

34. The Benefits of Crowdfunding From tapping into a wider investor pool to enjoying more flexible fundraising options, there are a number of benefits to crowdfunding over traditional methods. Here are just a few of the many possible advantages, which we’ll cover in greater detail later in this guide: Reach  – By using a  crowdfunding platform  like Fundable, you have access to thousands of accredited investors who can see, interact with, and share your fundraising campaign. Presentation  – By creating a crowdfunding campaign, you go through the invaluable process of looking at your business from the top level—its history, traction, offerings, addressable market, value proposition, and more—and boiling it down into a polished, easily digestible package. PR & Marketing  – From launch to close, you can share and promote your campaign through social media, email newsletters, and other online marketing tactics. As you and other media outlets cover the progress of your fundraise, you can double down by steering traffic to your website and other company resources.

35. The Benefits of Crowdfunding

36. What makes crowdfunding different from other funding? Crowdfunding reaches widely by using technology and reduces the size of funding each individual contributor has to come up with. Making it easy for a wider group of people to support a business or project. This means that there is a range of reasons why people might support you, and not simply for a financial return. Because the process of crowdfunding is a very public one and involves many people it can, and does, bring many more advantages than simply money. It can be a powerful campaigning tool , it can build networks, validate an idea, build awareness and many other things, all of which can be very valuable and useful.

37. What makes crowdfunding different from other funding? For some entrepreneurial projects, it has the advantage of accelerating the process of setting up a business by allowing the entrepreneur to run in parallel a series of processes like market research, publicity and marketing and fundraising, which have often traditionally been seen as sequential.

38. Crowdfunding: What are the advantages?

39. Crowdfunding: What are the advantages? What money it does bring can be very different from traditional investment – funds raised through crowdfunding are unrestricted and can be used for all elements of your project. It can be quick – as you are in control you are able to work quickly to start raising funds. You will also produce a very valuable asset for you or your organization as you run a campaign and that “crowd asset” can be a very useful and enduring resource – people who support your project are also likely to support your group.

40. What are the disadvantages?

41. But is it worth it? (from – Capital Crowdfund Advisors Report on 73 campaigns) Does Crowdfunding produce sales? Yes. Across all methods (rewards, debt and equity). Average quarterly increase in sales (not including the revenue raised through crowdfunding) of 24%. For equity-based raises an average of 341% increase in post crowdfund quarterly sales. 2. Does Crowdfunding create jobs? Yes, it does, though not in large numbers. 39% of respondents hired an average of 2.2 new people after crowdfunding. An additional 48% reported the intent to use the crowdfunding proceeds to create additional jobs. (Source: http://www.forbes.com/sites/cherylsnappconner/2014/01/21/new-report-the-roi-of-crowdfunding/#11eb81225cd8 )

42. But is it worth it? (from – Capital Crowdfund Advisors Report on 73 campaigns) 3. Does Crowdfunding deter follow-on investment? No. Within three months of successful crowdfunding, 28% had completed rounds of traditional investment with angels or traditional venture capitalists. An additional 43% were in talks with institutional investors. 4. What is the ROI of Crowdfund Investing? Every hour invested in a crowdfund campaign returned $813 on average. Source: http://www.forbes.com/sites/cherylsnappconner/2014/01/21/new-report-the-roi-of-crowdfunding/#11eb81225cd8

43. Reflections …. What next?

44. Reflections …. What next?

45. Reflections …. What next?