MODULE 05
Crowdfunding and Funding strategies
Theoretical Introduction:
What are Crowdfunding and funding strategies?
Crowdfunding is a popular method of raising funds for various projects or ventures by collecting small contributions from a large number of individuals, typically through online platforms. It has gained significant traction in recent years due to its ability to connect creators with potential supporters worldwide. Crowdfunding encompasses several strategies, each with its own unique characteristics and benefits.
Rewards-based Crowdfunding
This strategy involves offering backers tangible or intangible rewards in exchange for their financial support. These rewards can range from early access to the product or service being developed, exclusive merchandise, or personalized experiences. By providing attractive incentives, creators incentivize individuals to contribute to their projects.
Donation-based Crowdfunding
In this approach, contributors are motivated by a sense of philanthropy or social impact. Projects related to charitable causes, disaster relief efforts, or community initiatives often utilize this strategy. Donors contribute funds without expecting any direct financial returns, driven by the desire to make a positive difference.
Equity-based Crowdfunding
This method allows individuals to invest in a project or business in exchange for equity or shares. It is particularly relevant for startups or innovative ventures seeking substantial capital. Investors have the potential to earn financial returns if the project succeeds and gains value.
Peer-to-Peer Lending
This funding method involves borrowing money from individuals who are willing to lend, often through online platforms. Borrowers repay the loan amount with interest over a specified period. Peer-to-peer lending provides an alternative to traditional financial institutions and allows individuals to support others directly.
To maximize the impact of crowdfunding strategies, several methods have proven effective:
● Compelling Storytelling:
Crafting a compelling narrative around the project and its purpose can resonate with potential backers emotionally. Sharing the project's vision, goals, and the impact it aims to create can generate interest and inspire individuals to contribute.
● Engaging with the Community:
Building and nurturing a community of supporters is crucial. Regularly interacting with backers, answering their queries, and providing updates fosters a sense of trust and transparency. This engagement can lead to increased support and word-of-mouth promotion.
● Leveraging social media:
Utilizing social media platforms effectively can significantly enhance the reach and visibility of crowdfunding campaigns. Engaging content, eye-catching visuals, and strategic use of hashtags can help attract a wider audience and encourage sharing.
● Offering Unique Experiences:
Providing exclusive rewards or experiences that are truly unique to the project can attract backers. This could include personalized interactions, limited-edition merchandise, or behind-the-scenes access, creating a sense of exclusivity and value for supporters.
In summary, crowdfunding has become a versatile funding strategy, with various approaches that cater to different project types and funding needs. By employing impactful methods such as compelling storytelling, community engagement, social media utilization, and unique experiences, creators can enhance their chances of achieving crowdfunding success and bringing their ideas to life.
CROWDFUNDING EXPLORATION
LEARNING OUTCOMES
Understand the concept of crowdfunding and its potential as a funding strategy.
45 minutes
● Flipchart or whiteboard with markers
● Sticky notes or index cards
● Writing materials (pens, pencils)
Preparation
Theorical:
Crowdfunding
The concept of crowdfunding is simple:
People funding people.
The idea has been around for years and is still growing in popularity. However, it can be daunting for the uninitiated to get an overview. You might have come across the word before and have a general idea about what it is and how it works. But if you are interested in learning more about the finer details of crowdfunding, this guide is a great place to start.
What is crowdfunding?
And how does it work?
In short, crowdfunding is a way of raising money for a specific project from a large “crowd” of people. The investors – usually known as “backers” – receive rewards, interest or even equity in the company in return for their contribution.
In some cases, backers can also support a campaign as a donation, expecting nothing but a ‘thank you’ from the project owner.
Traditionally, if you needed to raise capital for a business idea or to develop a new product, you would need to go to the bank or contact angel investors and venture capital firms and hope you reached the right investor at the right time.
Crowdfunding opens up a new source of financing by giving entrepreneurs a space to pitch their business idea to a wider audience of waiting investors.
Description
Introduction
Begin by explaining the concept of crowdfunding as a funding strategy that involves raising money from a large number of people, typically through online platforms.
Highlight the potential benefits of crowdfunding, such as access to a wider audience, community support, and the ability to validate ideas.
Crowd Idea Generation
Divide participants into small groups.
Provide each group with sticky notes or index cards.
Instruct participants to brainstorm and write down at least three project ideas or initiatives that could benefit from crowdfunding. Encourage creativity and diverse thinking.
Each group should stick their ideas on the flipchart or whiteboard.
Discussion and Analysis
Facilitate a group discussion to analyze the project ideas generated.
Encourage participants to explore the potential benefits and challenges of crowdfunding for each project.
Discuss factors that could make a project suitable or unsuitable for crowdfunding (e.g., target audience, project scale, impact, etc.).
Prompt participants to consider how different project characteristics might affect the crowdfunding campaign's success.
Case Study Exploration
Present a brief case study or example of a successful crowdfunding campaign. You can use real-life examples or hypothetical scenarios.
Discuss the key elements that contributed to the campaign's success (e.g., compelling storytelling, effective use of social media, engaging rewards, etc.).
Highlight any lessons or insights that can be applied to participants' own projects or initiatives.
Reflection and Closing
Conclude the activity with a brief reflection session.
Ask participants to share one thing they have learned about crowdfunding and its potential as a funding strategy.
Summarize the main takeaways and emphasize the importance of creativity, planning, and effective communication in crowdfunding endeavors.
Learn Check
Conduct a debriefing session to facilitate reflection and reinforce the learning outcomes.
Ask participants the following questions:
What did you find most interesting or surprising about crowdfunding?
How do you think crowdfunding can benefit projects or initiatives?
What challenges or risks do you see in using crowdfunding as a funding strategy?
Encourage participants to share their insights and engage in a group discussion.
Summarize the key points raised during the discussion and highlight the main advantages and challenges of crowdfunding as identified by the participants.
Offer any additional guidance or clarification on crowdfunding concepts, if needed.
Tips for the Trainer
Encourage active participation and collaboration among participants during the brainstorming and discussion stages.
Foster an open and supportive environment for sharing ideas and insights.
Be prepared to provide guidance and answer questions throughout the activity.
Adapt the discussion and case study examples to suit the participants' interests or context.
EXPLORING
CROWDFUNDING PLATFORMS
LEARNING OUTCOMES
Identify different types of crowdfunding platforms and their features.
60 minutes
● Projector or a large screen for presentation
● Worksheets for participants
● Writing materials (pens, pencils)
Preparation
Create a presentation that provides an overview of each type of crowdfunding platform, including their key characteristics, benefits, and examples.
Prepare handouts or worksheets that allow participants to take notes and engage in activities related to the different types of crowdfunding platforms.
Description
Introduction and Theoretical Overview:
Begin by introducing the concept of crowdfunding and its significance as a funding strategy.
Provide a brief theoretical overview of different types of crowdfunding platforms, explaining reward-based, donation-based, equity-based, and lending-based platforms.
Highlight the key features and differences between these platforms.
Presentation and Discussion:
Use the prepared presentation to explain each type of crowdfunding platform in more detail.
Discuss the specific features, benefits, and examples associated with each platform.
Encourage participants to ask questions and engage in a discussion about the different types of crowdfunding platforms.
Group Activity:
Platform Analysis:
Divide participants into small groups.
Distribute the handouts or worksheets that focus on platform analysis.
Instruct each group to choose one type of crowdfunding platform and analyze its features, benefits, and potential drawbacks.
Allow time for the groups to discuss and complete the activity, noting down their findings.
Group Presentations and Discussion:
Have each group present their analysis of the chosen crowdfunding platform to the larger group.
Facilitate a discussion after each presentation to compare and contrast the different platforms and their unique characteristics.
Encourage participants to ask questions and share additional insights.
Summary and Conclusion:
Summarize the main points discussed during the activity.
Emphasize the importance of understanding the different types of crowdfunding platforms and their features in order to make informed decisions when planning crowdfunding campaigns.
Learn Check
Conclude the activity with a debriefing session to reflect on the learning outcomes.
Ask participants to share one key takeaway or interesting insight they gained from exploring the crowdfunding platforms.
Facilitate a short discussion about how participants can apply this knowledge in their own crowdfunding campaigns or projects.
Summarize the main points discussed during the activity and reiterate the importance of understanding the different crowdfunding platforms and their features.
Tips for the Trainer
Ensure the presentation is clear and engaging, providing relevant examples and visuals to illustrate the different crowdfunding platforms. Encourage active participation by asking questions and facilitating discussions. Allow enough time for participants to work on the group activity and share their findings. Offer guidance and clarification as needed during the group discussions and presentations. By engaging participants in a presentation, group activity, and discussion, this activity enables them to identify different types of crowdfunding platforms and gain an understanding of their features. The theoretical overview and hands-on analysis help participants develop knowledge and skills related to choosing appropriate platforms for their crowdfunding campaigns.
BUSINESS MODEL CANVA
LEARNING OUTCOMES
How to understand the business models and how to create one for your idea following the most productive paths.
90 minutes
● Flip charts
● A4 papers
● Internet
● Markers and sticky notes
Preparation
Description:
The activity aims to identify the elements that define the Entrepreneur and the relevant characteristics, to foster new form of
employability and to encourage the entrepreneurial spirit.
Description
Participants, keeping the same groups, will learn how to create a CANVAS Business Model to create a project ideas. This method will support the participants in the process of assisting young people in structuring their ideas. Participants will work on their project, building a draft business model for a socially oriented organization that promotes youth development and participation through sports activity. The Trainers will provide each group of participants with an outline of the business model and will also continuously train the participants on how they can fill in the main elements of the model. To be part of the discussion the people from the outside circle who intend to take part have to touch the shoulder of one of the 4 people debating in the inner circle.
Participants will be divided into groups of 3 people of different nationalities. Each group will develop a total of at least 3 non-formal education tools aimed at transmitting attitudes related to the spirit of initiative, leadership, and active participation in society through sport (in particular for young people belonging to disadvantaged categories/contexts). The Trainers will ask the groups to use as a starting point in the development of the tools the models developed by the other groups during the morning (SWOT and Business Model CANVAS), so as to be able to take advantage of ideas and points of view other than those purely personal.
Learn Check
Participants will learn how to manage the creation of a business model canvas and how analyse the same canvas created by their peers in order to sustain the main idea and support their work.
They will reflect after presenting their ideas and share the results among themselves Summarize the key points raised during the discussion an highlight the importance of effective storytelling and donor engagement in creatin successful crowdfunding campaigns.
Offer any additional guidance or clarification on campaign planning techniques, if needed.
Tips for the Trainer
Link the part of work and presentations with the debriefing directly without a cut in the middle to ensure the smooth transition.
PITCH DECK
LEARNING OUTCOMES
To convince a separate party, whether it's an investor or a client, to continue the conversation with you about your business.
To know how to stand out in a crowded market, attract investment or partnerships, and refine their strategy and communication skills.
30 minutes
● Flipchart or whiteboard with markers
● Sticky notes or index cards
● Writing materials (pens, pencils)
Preparation
Description
1.
Proper explanation of what is a pitch deck
2.
Draw the previously shared milestone or share it on a projector
3.
Explain each of the elements of the pitch deck and how to create a presetation related to these elements related to their previously made business models.
4.
Ask the participants to remain in the same groups from the previous activity.
5.
Hand them more papers and sticky notes and markers to be able to create a proper visual attraction.
6.
Participant to make a business path like shown in previous figure related to their idea exploring different development points.
7.
Presentation of each group
8.
Comments from the audience and questions
9.
Offer any additional guidance or clarification on campaign planning techniques, if needed.
Learn Check
Participants will learn how to be creative and create a project visual aspect to present their idea.
Participants will be pushing each other for further development of their business ideas to know how to do a basic visual storytelling.
They will reflect after presenting their ideas and share the results among themselves.
Summarize the key points raised during the discussion an highlight the importance of effective storytelling and donor engagement in creatin successful crowdfunding campaigns.
ELEVATOR DECK
LEARNING OUTCOMES
Learn how to present your idea in a fast and more interesting way
45 minutes
● Flipchart or whiteboard with markers
● Sticky notes or index cards
● Writing materials (pens, pencils)
Preparation
Description
After you show the video make a round of Q’s and A’s about the idea of pitching and how it is essential in business facilitation and growth.
Give the participants time to reflect on their understanding of the task.
Participants will have to create a presentation about their previously made business plan generated in the last activity.
The concept of the activity is based on 5 mins presentation with an investor in an elevator so prepare the setting to look like an elevator and one investor from the other teams.
The preparation of the pitch should be short and more into the point.
Feedback from participants on the way of the presentation and the modification of the business models after tweaking.
Learn Check
Conduct a debriefing session to facilitate reflection and reinforce the learning outcomes.
Ask participants the following questions:
1.
How they felt presenting their ideas in a short window of time?
2.
How is it to be able to manage a full idea presented for funding in a non-meeting environment?
3.
How did they feel?
Encourage participants to share their insights and engage in a group discussion.
Summarize the key points raised during the discussion and emphasize the importance of exploring diverse funding sources for social entrepreneurship projects.
Offer additional guidance or resources if participants express a need for further support or information.
Tips for the Trainer
Give more time for preparation if needed.
Set the surrounding more appropriately like an elevator.
Give feedback about idea as well as their approach and language