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Funding Entrepreneurship lecture, CJ Cornell
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Funding Funding EntrepreneurshipEntrepreneurship
C.J. CornellC.J. Cornell @cjcornell@cjcornell
Small BusinessSmall Business
High-Growth StartupsHigh-Growth Startups
Ideas -> Patents, IP etc Ideas -> Patents, IP etc
Social ImpactSocial Impact
INtrapreneurshipINtrapreneurship
ACTIVITIES RESULTSRESOURCES
Defining Entrepreneurship
Defining Entrepreneurship
Type of Entrepreneurship
Desired/Expected Outcome
Activities Resources Required / Available
Small Business(merchant, consultant, freelancer, franchisee)
Paycheck(s), Personal Satisfaction (lifestyle)
Business Operations: Legal establishment, managing employees etc.
Personal Funds, Bank Loans, SBA Assistance. “organic” (revenue funding)
Innovation(Scientist, researcher, inventor, artist …)
Patents, IP, Tech Transfer, Royalties
Institutional research, Documentation of IP
Government/Public Funding. Foundation and special private (patron) funding
Intrapreneurship(manager, employee)
Large company growth, new products, new processes…
“working the system”, aligning allies, persuading stakeholders
Internal, corporate resources, funding
Social Entrepreneurship(activist, advocates, patrons)
Solving or Impacting “causes” & societal issues. Awareness. Behavior change.
Marketing, petitioning, organizing. “empowering” others to do the same.
Foundation funding. Charitable/fundraiding. Patrons. Public funding.
“Vanguard” Entrepreneurship(technologists, ‘silicon valley’, opportunists, dreamers)
Growth; market making,.“Scalability”. Rapid Market domination.Wealth – personal and ‘community’
Rapid concept to product, to market. “pitching”, business models, acquiring “users” – particularly early adopters and influencers.
Personal funds.Angel fundingVenture capitalIPO
Type of Entrepreneurship
Desired/Expected Outcome
Activities Resources Required / Available
Small Business Paycheck(s), Personal Satisfaction (lifestyle)
Business Operations: Legal establishment, managing employees etc.
Personal Funds, Bank Loans, SBA Assistance. “organic” (revenue funding)
Innovation Patents, IP, Tech Transfer, Royalties
Institutional research, Documentation of IP
Government/Public Funding. Foundation and special private (patron) funding
Intrapreneurship Large company growth, new products, new processes…
“working the system”, aligning allies, persuading stakeholders
Internal, corporate resources, funding
Social Solving or Impacting “causes” & societal issues. Awareness. Behavior change.
Marketing, petitioning, organizing. “empowering” others to do the same.
Foundation funding. Charitable/fundraiding. Patrons. Public funding.
“Vanguard” Growth; market making,.“Scalability”. Rapid Market domination.Wealth – personal and ‘community’
Rapid concept to product, to market. “pitching”, business models, acquiring “users” – particularly early adopters and influencers.
Personal funds.Angel fundingVenture capitalIPO
FundingEntrepreneurship
FundingEntrepreneurship
Type of Entrepreneurship
Desired/Expected Outcome
Activities Resources Required / Available
Small Business Paycheck(s), Personal Satisfaction (lifestyle)
Business Operations: Legal establishment, managing employees etc.
Personal Funds, Bank Loans, SBA Assistance. “organic” (revenue funding)
Innovation Patents, IP, Tech Transfer, Royalties
Institutional research, Documentation of IP
Government/Public Funding. Foundation and special private (patron) funding
Intrapreneurship Large company growth, new products, new processes…
“working the system”, aligning allies, persuading stakeholders
Internal, corporate resources, funding
Social Solving or Impacting “causes” & societal issues. Awareness. Behavior change.
Marketing, petitioning, organizing. “empowering” others to do the same.
Foundation funding. Charitable/fundraiding. Patrons. Public funding.
“Vanguard” Growth; market making,.“Scalability”. Rapid Market domination.Wealth – personal and ‘community’
Rapid concept to product, to market. “pitching”, business models, acquiring “users” – particularly early adopters and influencers.
Personal funds.Angel fundingVenture capitalIPO
FundingEntrepreneurship
FundingEntrepreneurship
WHYWHY
ACTIVITIES RESULTSRESOURCES
Type of Entrepreneurship
Desired/Expected Outcome
Activities Resources Required / Available
Small Business Paycheck(s), Personal Satisfaction (lifestyle)
Business Operations: Legal establishment, managing employees etc.
Personal Funds, Bank Loans, SBA Assistance. “organic” (revenue funding)
Innovation Patents, IP, Tech Transfer, Royalties
Institutional research, Documentation of IP
Government/Public Funding. Foundation and special private (patron) funding
Intrapreneurship Large company growth, new products, new processes…
“working the system”, aligning allies, persuading stakeholders
Internal, corporate resources, funding
Social Solving or Impacting “causes” & societal issues. Awareness. Behavior change.
Marketing, petitioning, organizing. “empowering” others to do the same.
Foundation funding. Charitable/fundraiding. Patrons. Public funding.
“Vanguard” Growth; market making,.“Scalability”. Rapid Market domination.Wealth – personal and ‘community’
Rapid concept to product, to market. “pitching”, business models, acquiring “users” – particularly early adopters and influencers.
Personal funds.Angel fundingVenture capitalIPO
The Funding GapThe Funding Gap
Concept to Product to Growth
Concept to Product to Growth
$$ $$ $$$$
Concept to Product to Growth
$$Entrepreneur IPO
Concept to Product to Growth
$$Entrepreneur IPO
$$Entrepreneur IPO
$$
Venture Capital
Concept to Product to Growth
$$Entrepreneur IPO
$$Entrepreneur IPO
$$
Venture Capital
$$Entrepreneur IPO
$$
Venture Capital
$$
Angels,accel & incub
Concept to Product to Growth
$$Entrepreneur IPO
$$
Venture Capital
$$
Angels,accel & incub
CrowdfundingCrowdfunding
$$$$
Concept to Product to Growth
$$Entrepreneur IPO
$$
Venture Capital
$$
Angels,accel & incub
CrowdfundingCrowdfunding
$$$$
CrowdfundingCrowdfunding$$
Concept to Product to Growth
$$Entrepreneur IPO
$$
Venture Capital
$$
Angels,accel & incub
CrowdfundingCrowdfunding
$$$$
CrowdfundingCrowdfunding$$
CrowdfundingCrowdfunding$$
Concept to Product to Growth
$$Entrepreneur IPO
$$
Venture Capital
$$
Angels,accel & incub
CrowdfundingCrowdfunding
$$$$
CrowdfundingCrowdfunding$$
CrowdfundingCrowdfunding$$
CrowdfundingCrowdfunding$$
Crowdfunding
Soliciting & Collecting relatively small amounts Soliciting & Collecting relatively small amounts of money (of money (fundingfunding) from a large number ) from a large number ((crowdcrowd) of people) of people
What is Crowdfunding
• Derived from Collective Intellgence• Convergence of ecommerce, venture funding,
social media, social networking • Online and Offiline• Debt, donation, equity and other• ROI, ROE
What is Crowdfunding
What is Crowdfunding
What is Crowdfunding
What is Crowdfunding
What is Crowdfunding
What is Crowdfunding
What is Crowdfunding
What is Crowdfunding
Crowdfunding Concepts
• Debt Crowdfunding– microloans– P2P lending
• Donation Crowdfunding– Charity/Causes– Kickstarter Model– Rewards Based– Pre-Order/Presumer
• Equity Crowdfunding – JOBS act
Equity Crowdfunding - JOBS• Eliminates ban on general solicitation and general advertising in connection with
private offerings to accredited investors under Regulation D (Rule 506) and to qualified institutional buyers under Rule 144A.
• Exemption from Securities Act registration “crowdfunding” transactions (involving access to small amounts of capital through the internet).
• Exemption to allow issuance of up to $50 million of securities in any 12-month period, up from the current $5 million threshold
• An increase in the number of shareholders a company may have before being required to register its common stock with the SEC and become a public reporting company from 500 to 2,000 total shareholders (including up to 500 “unaccredited” shareholders)
• Amount each person may invest in offerings of this type, tiered by the person's net worth or yearly income.
“THE KICKSTARTER MODEL”Rewards-based, Donation Crowdfunding:
ALL OR NOTHINGALL OR NOTHING
Perks &Perks &RewardsRewards
Updates (and Blogging)Updates (and Blogging)
Updates (and Blogging)Updates (and Blogging)
Comments & EngagementComments & Engagement
http://www.kickstarter.com/projects/hop/elevation-dock-the-best-dock-for-iphone
• The iPhone-friendly Pebble watch earned $7.6 million more than its $100,000 goal.
• And the Galileo iPhone platform closed its Kickstarter campaign at $702,000, far surpassing its $100,000 goal.
• Ouya raised $2 million in one day for a new Android gaming console (it’s raised more than $5 million to date),
• the Nifty MiniDrive, external memory for Apple MacBooks. The tiny storage company is more than 2,000% above its $11,000 goal with 15 days left in the campaign.
REWARDS & PERKS = “WHY”Rewards-based, Donation Crowdfunding:
http://trendwatching.com/trends/infographics/presumers/
Rewards Crowdfunding
• Incentives & perks• Pre-Orders• Pre-Sumers
• Market Validation
Rewards don’t have to worth $$
SO, WHY WOULD ANYONE …??Rewards-based, Donation Crowdfunding:
Directed by
Patrick Million
Executive Producer
CJ Cornell
a Patrick Million FILM
American Grandmaster
WHY Crowdfunding?
• Passion– For the technology– For the industry– For the cause– For the product
• Affinity– For the Entrepreneur– For the region, industry etc
• Connection• Every reason BUT R.O.I. …
Lessons from Ethan Mollick’s “The Dynamics of Crowdfunding: Determinants of Success and Failure”
emotional rate of return.
Not financial ROI
UH OH …The Kickstart Model..
Crowdfunding sites
• Kickstarter• Indiegogo• • • • • Propel Arizona
• Equity Crowdfunding sites (not legal, not operating)
• Specialty niche Crowdfunding sites
• Micro loan, cause/charity funding sites.
HOW to Crowdfund?
1. PRE - Preparing
2. PUSH - Running the campaign
3. POST – Delivering on your Promise
HOW to Crowdfund?
1. PRE - Preparing– Build Credibility– Sharpen Pitch & Post– Perks and Rewards– Timefames & $$
HOW to Crowdfund?
PUSH - Running the campaign• Social Media• Comments & Updates• Networking• Personal Pitches
Social Engagement
– Transparency & TrustTransparency & Trust– Social Proof & Viral FXSocial Proof & Viral FX
– Engagement & “The Fundamentals”Engagement & “The Fundamentals”– TwitterTwitter– FacebookFacebook– BloggingBlogging
HOW to Crowdfund?
POST - campaign• Thanks …• Perks and rewards• Updates• Completing your goals !!
www.propelarizona.com
Introducing … Introducing …
Crowdfunding Arizona Entrepreneurs
Crowdfunding Arizona Entrepreneurs
Jumpstarting Innovation & Economic GrowthJumpstarting Innovation & Economic Growth
• Brave Souls • White Knights• Superstars• Supernovas• Etc …
• Pitch Events• Contests• Workshops• Mentoring
www.propelarizona.com