CrowdFunding Presentation.pdf

CrowdFunding Presentation.pdf - Introduction to...

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Introduction to Crowdfunding Dr. Denis Schweizer Associate Professor of Finance Director of the Van Berkom Small-Cap Investment Management Program Manulife Professor in Financial Planning John Molson of Business, Concordia University Office: MB 11.305 Phone: +1(514)-848-2424, ext. 2926 E-Mail: [email protected]
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Page 2 What is Crowdfunding? A new form of fundraising via the Internet , whereby groups of people pool money , usually (very) small individual contributions in form of donation , or in exchange for some form of reward and/or voting / cashflow rights (i.e., equity) in order to support initiatives for specific purposes .
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Page 3 Types of Crowdfunding 1) Donation-Based Funders expect no direct return for their donation. 2) Reward-Based Funders (backers) receive a reward for backing the project (different rewards for different contribution amounts). 3) Equity Crowdfunding (Crowdinvesting) Investors invest money and receive an equity stake in the company. 4) Lending-Based (Debt Crowdfunding) Funds are offered as a loan, with the expectation of some rate of return on capital invested (interest payments).
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Page 4 Types of Crowdfunding continued 4) Real Estate Crowdfunding Funders invest in real estate (equity or debt). 5) Health Crowdfunding Backers donate for health treatments.
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Page 5 Crowdfunding and Politics Crowdfunding is rewriting the campaign finance playbook. A donor is a voter! The Idea: Financing a campaign with a large group of small donors. Advantages: People who donate are more likely to show up to the polls on election day see Brexit-referendum !?! Small donors are more likely to do campaign volunteer work compared to large donors. People are no longer required to travel to a fundraiser in order to donate to their candidate.
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Page 6 Crowdfunding and Politics continued The historic presidential campaign of Barack Obama in 2008, raised more than $750 million over a 21 month period. More than 80 percent of this money came in as small donations of less than $200. After becoming his party's nominee, Obama declined public financing and the spending limits that came with it, making him the first major-party candidate since the system was created to reject taxpayers' money for the general election.
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Page 7 Crowdfunding and Politics continued Sanders urged everyone to visit his website and make a donation “whether it’s 10 bucks, or 20 bucks, or 50 bucks.” By the end of next day, the campaign had collected $8 million. In total, Sanders raised over $226 million with more than 90 percent of it coming in as small donations of less than $200. “I am going to hold a fundraiser right here, right now, across America” Bernie Sanders (after winning New Hampshire primary, Feb. 2016)
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Page 8 Crowdfunding Market vs. VC vs. Angel Investors A study commissioned by the World Bank projected that the crowdfunding industry would hit the $93 billion mark by 2025.
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