Crowdfunding for the smallest (part 1)


Crowdfunding is a relatively young phenomenon, which managed to gain immense popularity abroad, which came to us just a couple of years ago. Strange as it may seem, but many people still don’t understand the main essence of this phenomenon and even the purpose of crowdfunding platforms. Others are plagued by understandable fears, so they prefer to bypass these platforms. In order to shed light on this phenomenon and dispel the myths and legends around it, I decided to devote a series of articles to this. I am not a representative of a crowdfunding platform and do not advertise any crowdfunding resources.

A bit of background


Why did I choose this topic? In my spare time, my colleagues and I are developing our own project, which has hardware and software. Often, the launch and further support of such projects require large investments, which our budget could not cover. We could not attract financing, as investors in this case need to provide a finished product, but it is clear that the prospect of a running project without visitors, and waiting for some business angel to pay attention to it, did not suit us, this means that funds are also needed in order to immediately start up and further harmoniously build up the user base. In our situation, crowdfunding ideally suited us. We thoroughly engaged in the study of this issue, and the result of our research was this series of articles. We hasten to introduce you to her. Enjoy reading!

Now open the notebooks and write


According to Wikipedia, crowdfunding (“public funding”, from English crowd funding, crowd - “crowd”, funding - “funding”) is a collective collaboration of people (donors) who voluntarily pool their money or other resources together, usually via the Internet to support the efforts of other people or organizations (recipients).

In other words, it is an association of people, the main purpose of which is to attract (collect) money for the implementation of social, creative, scientific or production projects of any people or organizations. Charges of this kind in our time are usually carried out via the Internet, and this phenomenon implies directly the way of raising funds, and the tools of this process play a secondary role.

This process is carried out with the help of special crowdfunding platforms, or independently on the official website of an organization or person interested in collecting. In this case, the platform is a guarantor of transactions and security, as it carries out checks and screenings of projects violating the rules of the system. A very interesting nuance is that the use of the platform is more preferable due to the fact that fees somewhere on an independent site bring the user more freedom to make decisions in this area. That is, by going directly to the project or organization site itself, it does not receive an obsessive request to “donate right now,” which, among other things, is necessarily supplied with a picture that will cause pity to anyone (yes, this is what you thought). Platforms are almost devoid of these shortcomings,

Distinctive features of any campaign on any platform are: text with vivid illustrations, as accurately as possible reflecting the essence of the future project, optionally with video and audio materials, and the choice of remuneration, which differs depending on how much was donated by the donor (of course, besides providing him directly in the future for which he donated). As a rule, these rewards are provided in electronic form (thanks in a special section of the site or social networks, an electronic copy of a music album, etc.), and sometimes souvenirs. As they say, a trifle, but nice. Needless to say, for the convenience of donor platforms provide a large number of payment methods, ranging from electronic wallets to bank cards and payment machines.

Okay, what are these platforms?

Kickstarter

kickstarter.com

Abroad, the undoubted leader is the well-known Kickstarter, founded in 2009 (it is interesting that in Russia the analogues of this platform appeared more than three years after its foundation). It publishes hundreds of projects every day, currently 86 thousand projects have received funding for almost $ 2 billion. The most successful Pebble received a smart watch in 2012 with funding (attention!) $ 10 266 845 (10266% of 100%). )! Only creative and scientific production projects are accepted. On this search crowdfunding platform could be completed, but it is worth noting that it is available only to residents of the United States, Britain, Canada, Australia, New Zealand, the Netherlands, Denmark, Ireland, Norway, Sweden and Germany. When registering require an SSN, TIN or EIN (similar to our TIN) for US residents and the obligatory presence of permanent residence in the country of opening the campaign and EU passport for non-residents. As a solution for non-US residents, it is proposed to use the services of a US resident partner, establish an American company and use its SSN, or even hire an American employee and use its SSN. An alternative is to use the services of intermediaries who take 10-20% of the fundraising. The commission of the Kickstarter itself is 5% + the Amazon commission is about 5%, as a result, with the services of intermediaries, the commission will be 25-30%, and this is without any guarantee that the project will collect the necessary funding at all, as well as in case of great success the intermediary may just disappear from the horizon. As a solution for non-US residents, it is proposed to use the services of a US resident partner, establish an American company and use its SSN, or even hire an American employee and use its SSN. An alternative is to use the services of intermediaries who take 10-20% of the fundraising. The commission of the Kickstarter itself is 5% + the Amazon commission is about 5%, as a result, with the services of intermediaries, the commission will be 25-30%, and this is without any guarantee that the project will collect the necessary funding at all, as well as in case of great success the intermediary may just disappear from the horizon. As a solution for non-US residents, it is proposed to use the services of a US resident partner, establish an American company and use its SSN, or even hire an American employee and use its SSN. An alternative is to use the services of intermediaries who take 10-20% of the fundraising. The commission of the Kickstarter itself is 5% + the Amazon commission is about 5%, as a result, with the services of intermediaries, the commission will be 25-30%, and this is without any guarantee that the project will collect the necessary funding at all, as well as in case of great success the intermediary may just disappear from the horizon. An alternative is to use the services of intermediaries who take 10-20% of the fundraising. The commission of the Kickstarter itself is 5% + the Amazon commission is about 5%, as a result, with the services of intermediaries, the commission will be 25-30%, and this is without any guarantee that the project will collect the necessary funding at all, as well as in case of great success the intermediary may just disappear from the horizon. An alternative is to use the services of intermediaries who take 10-20% of the fundraising. The commission of the Kickstarter itself is 5% + the Amazon commission is about 5%, as a result, with the services of intermediaries, the commission will be 25-30%, and this is without any guarantee that the project will collect the necessary funding at all, as well as in case of great success the intermediary may just disappear from the horizon.

However, there are also host platforms and residents of other countries. These include the equally well-known platform IndieGoGo.

IndieGoGo

indiegogo.com



It has been working since 2008, and is the oldest known crowdfunding platform, which, unfortunately, lags noticeably behind Kickstarter: more than 200,000 projects have been implemented for a total of almost $ 500 million (of which about $ 200 million are successful). The most successful - an advanced hive for bees (who would have thought) collected in April 2015 $ 12,174,187 (17385% out of 100%)! Many people know the story of Canonical Ltd., which in July 2013 launched a campaign to raise funds for the creation of a smartphone Ubuntu Edge, whose goal is $ 32 million, which is still the largest goal in the history of crowdfunding in the world. $ 12,809,906 was raised, which, however, did not cover the cost of producing smartphones in a highly crowded market, so all funds were returned to donors. Unlike Kickstarter, it is also possible to implement social projects (assistance to the sick, victims of natural disasters, etc.). An interesting model of fundraising: the commission is 4% for the campaigns. If the required amount is not recruited, the campaign is still considered valid (the commission in this case will be 9%). A very interesting type appeared a year ago, in which you can donate even when the campaign is officially completed (!). Unlike Kickstarter, which uses the Amazon payment system, IndieGoGo uses PayPal, whose commission, in turn, ranges from 3.5% to 9%. the campaign is anyway considered to have taken place (the commission in this case will be 9%). A very interesting type appeared a year ago, in which you can donate even when the campaign is officially completed (!). Unlike Kickstarter, which uses the Amazon payment system, IndieGoGo uses PayPal, whose commission, in turn, ranges from 3.5% to 9%. the campaign is anyway considered to have taken place (the commission in this case will be 9%). A very interesting type appeared a year ago, in which you can donate even when the campaign is officially completed (!). Unlike Kickstarter, which uses the Amazon payment system, IndieGoGo uses PayPal, whose commission, in turn, ranges from 3.5% to 9%.

Payment with the help of foreign payment systems often creates difficulties for Russian users (with Russian payment systems sometimes creates, what to say about foreign), it can also be difficult to enter Russian projects on the market, especially Internet projects. Therefore, with all its advantages, work with these sites is not always possible.

We roll the lip back and return to Russia

Let's say right away: three years after the launch of the first Russian counterpart of Kickstarter, crowdfunding in Russia is almost in its infancy. “Almost”, since we have at least two rather large platforms, one of which is closely cooperating with Lipton, being there in search of projects that he personally wants to finance. Definitely the support of such a giant in the market already says a lot. This platform is the first and still the largest crowdfunding platform in Russia, planeta.ru.

planeta.ru

planeta.ru



Some numbers: for all the years of its existence (since 2012), more than 2,000 projects have been successfully implemented for a total of 220 million rubles. The most successful - Harry Bardin’s “Listening to Beethoven” cartoon, relatively recently, in May 2015, collected more than 6 million rubles. This statistic more than objectively shows the current state of crowdfunding in Russia. We are still not very foreign. However, it is worth looking at things optimistically: we personally, on our own experience of our fundraising campaign, see that we are being sacrificed by people, many of whom have a few dozen projects supported by them, which already gives great hope that this phenomenon in Russia is very as relevant. It also cannot but please the list of musical groups that successfully implemented their projects on it: BI-2, Accident, Lyapis Trubetskoy, King and Jester, Splin, Animal Jazz, Underwood.

Boomstarter

boomstarter.ru



We seem to be living in a country with a developed market economy, and we also have healthy competition, so it’s a coincidence or not, but after two months, the planeta.ru platform had its direct competitor, Boomstarter. For all the time, more than 3000 projects have been implemented on it, of which more than 1000 were successful, worth more than 250 million rubles. These two services are analogous, but there is one fundamental difference: on Boomstarter, the project is considered to have taken place only when the entire required amount is collected, while on planeta.ru, at least half the amount is sufficient for this. Therefore, it makes sense to select a crowdfunding platform on the basis of these features: if even half of the amount collected is substantial for the project, it is recommended to use the Planet, in all other cases Bumberstar will do. On both platforms, when you create a fundraising campaign, your personal curator is assigned to you, who will help you carry out your entire campaign. However, the significant difference between the Bumstarter and the Planet lies in the fact that it will give you advice on how to make your campaign more effective for almost the entire duration of the campaign on it. On the Planet, the curator answers only questions that you yourself ask him. Means of communication with the curator are different: Skype, email. mail, we even sometimes talked on the usual phone, it is quite normal. how to make your campaign more efficient. On the Planet, the curator answers only questions that you yourself ask him. Means of communication with the curator are different: Skype, email. mail, we even sometimes talked on the usual phone, it is quite normal. how to make your campaign more efficient. On the Planet, the curator answers only questions that you yourself ask him. Means of communication with the curator are different: Skype, email. mail, we even sometimes talked on the usual phone, it is quite normal.

More recently, several very tangible innovations have been made. First, as with IndieGoGo, you can now donate even when the campaign is not officially completed. Secondly, it is possible to report any non-existent amount, if for some reason (for example, for consecration in the media) it is necessary that the required amount (at least in the form of numbers) be collected at any cost. This approach leaves a double impression, but on the other hand, it is better than asking the whole department to invest in a campaign, and then return all the money to them for a whole year.

Service commissions are also different: Planet commission is 10% if more than 99.9% of the required amount has been received, and 15% if from 50% to 99.9% is collected. Bumstarter Commission - 5%. In addition, on both resources, the commission of payment systems is charged 5% plus income tax of 13% for individuals. individuals. On Bumstarter for PI on the simplified payment system, the MO is 6%. On the Planet PN for SP or LLC is not paid, therefore, SP or LLC here to be preferable.

We have chosen the planeta.ru platform for our campaign, since any amount collected is important for us, be it at least half of the required amount, because we will get the funds we need in any case, but choosing a platform with a different fundraising model that requires fully collected amount, we would risk being left with nothing at all if the project would have collected at least 99% of the required funds.

The result of the first part


The first part of this series of articles has come to an end. We considered in it the largest and most famous crowdfunding platforms, which really deserve attention. I would like to summarize: crowdfunding is definitely a worthwhile opportunity to receive funding without investors and other sources. Thanks to tough manual moderation of projects, the possibility of cheating is minimal. Also, despite the fact that Russia still has a lot to do in this direction to popularize this phenomenon and create its positive reputation among users, there are already large crowdfunding platforms, thanks to which thousands of projects received funding for large sums.

Crowd funding in Russia has not yet gained popularity. The reason for this is its low light. It is also influenced by the fact that we are simply frightened by the fact that our money is involved in some way, and we can be completely understood: we are well-known not by hearsay of the dashing 90s, pyramids and scam, but the well-known founder This movement has recently recently successfully launched its campaign with the younger generation. However, I would like to reassure everyone with the following facts:

  • On well-known crowdfunding platforms, there is quite a tough moderation of projects, they are carefully checked by hand. This process takes up to a week (!), The contract is filled in, which must be signed by hand, the bank details of both parties are entered into it, the presence of which is obligatory.
  • The fact that the project was originally created to deceive users is quite simply established by those who have ever dealt with crowdfunding: as a rule, this project has a vague description, in which it is difficult to grasp the essence of the project and what exactly the collected funds will go to, most of the pictures in the description of the project are cliparts that do not reflect the essence of the project, or even have a small number of screenshots. By these fairly simple criteria, projects that are never moderated and will not be published are eliminated daily.
  • If the project does not collect the necessary funding, all funds will be returned back to donors, so you will not lose your money anyway.

In the following articles, we will look at how you can start your own fundraising campaign, as well as how to make it really effective.

Stay with us!

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