Your Guide to Understanding Crowdfunding
Summary
TLDRThe video script delves into the rapidly expanding online crowdfunding industry, which raised $16.2 billion in 2015 and is projected to reach $96 billion by 2025. It outlines four primary crowdfunding models: debt-based, equity-based, reward-based, and donation-based, each with distinct examples. The script advises on evaluating crowdfunding platforms by their growth stages, focusing on customer traction in the early stage, revenue model validation in the growth stage, and profitability maximization in the late stage. Key valuation metrics for each stage are provided, guiding potential investors.
Takeaways
- 💹 **Crowdfunding Growth**: The crowdfunding industry raised $16.2 billion in 2015 and is projected to grow to $96 billion by 2025.
- 🌐 **Global Funding**: Crowdfunding allows individuals and startups to gain funding for projects from contributors worldwide.
- 💼 **Four Types of Crowdfunding**: There are debt-based, equity-based, reward-based, and donation-based crowdfunding platforms.
- 📈 **Debt-Based Platforms**: Contributors receive interest payments, e.g., FundedHere, Crowdo, Moola Sense.
- 🔖 **Equity-Based Platforms**: Contributors receive shares, e.g., AngelList, FundersClub, CapBridge.
- 🎁 **Reward-Based Platforms**: Contributors receive rewards like early access to products, e.g., Kickstarter, Indiegogo, Ulily.
- ❤️ **Donation-Based Platforms**: Donations are charitable and often tax-deductible, e.g., Indiegogo, Patreon, YouCaring, FriendFund.
- 🚀 **Investment Considerations**: Before investing, consider the platform's growth stage and focus on customer traction in the early stage.
- 📊 **Valuation Metrics**: Key metrics vary by stage: early stage focuses on campaigns and funds raised, growth stage on funding value and revenue, and late stage on profitability and cash flow.
- 💡 **Further Learning**: For more information on crowdfunding, visit sgxacademy.com or download the digital research paper at sgx.com/digital-sector.
Q & A
What is crowdfunding?
-Crowdfunding is a method where individuals or startups use an online platform to raise funds for a project from a global audience.
How much did the crowdfunding industry raise in 2015, and what is the projected growth by 2025?
-The crowdfunding industry raised 16.2 billion US dollars in 2015 and is projected to grow to 96 billion by 2025.
What are the four types of crowdfunding sites mentioned in the script?
-The four types of crowdfunding sites are debt-based, equity-based, reward-based, and donation-based platforms.
What do contributors receive on debt-based crowdfunding sites?
-On debt-based crowdfunding sites, contributors receive interest payments in exchange for their contributions.
What are some examples of equity-based crowdfunding platforms?
-Examples of equity-based crowdfunding platforms include Angel List, FundersClub, and CapBridge.
How do reward-based crowdfunding platforms operate?
-Reward-based crowdfunding platforms operate by promising contributors rewards, such as first priority access to a product once it goes live, in exchange for their support.
What is the nature of contributions on donation-based crowdfunding platforms?
-Contributions on donation-based crowdfunding platforms are charitable and usually tax-deductible.
What are the key valuation metrics for crowdfunding platforms in the early stage of growth?
-In the early stage of growth, key valuation metrics for crowdfunding platforms include valuation divided by the number of campaigns, valuation divided by successful campaigns, and valuation by funds raised.
What is the aim for crowdfunding platforms in the growth stage?
-In the growth stage, the aim for crowdfunding platforms is to prove the revenue model and scale up as rapidly as possible.
What are the key valuation metrics for crowdfunding platforms in the late stage?
-In the late stage, key valuation metrics include valuation divided by revenue, valuation divided by EBITDA, and the P/E ratio.
Where can one learn more about crowdfunding and access a digital research paper on the topic?
-To learn more about crowdfunding and access a digital research paper, one can visit sgxacademy.com or download the paper at sgx.com under the digital sector.
Outlines
🚀 Crowdfunding Industry Overview
The script introduces crowdfunding as a rapidly growing online industry, where individuals and startups can raise funds for their projects through online platforms. In 2015, the industry raised $16.2 billion, with projections to reach $96 billion by 2025. It outlines four types of crowdfunding platforms: debt-based, equity-based, reward-based, and donation-based, each with specific examples. The script also discusses the importance of considering the growth stage of a crowdfunding platform before investing, with different valuation metrics for early, growth, and late stages.
Mindmap
Keywords
💡Crowdfunding
💡Debt-based sites
💡Equity-based sites
💡Reward-based platforms
💡Donation-based platforms
💡Valuation metrics
💡Customer traction
💡Revenue model
💡Profitability
💡Cash flow
💡Digital research paper
Highlights
Crowdfunding industry raised 16.2 billion US dollars in 2015 and is projected to grow to 96 billion by 2025.
There are four kinds of crowdfunding sites: debt-based, equity-based, reward-based, and donation-based.
Debt-based sites offer interest payments to contributors, like FundedHere, Crowdo, and Moola Sense.
Equity-based sites provide shares to contributors, with examples including Angel List, FundersClub, and CapBridge.
Reward-based platforms promise rewards like early access to products, with Kickstarter, Indiegogo, and Ulily as examples.
Donation-based platforms are charitable and often offer tax deductions, with Indiegogo, Patreon, YouCaring, and Fundly as examples.
Crowdfunding platforms need significant upfront investment and gradual scale-up.
In the early stage of a crowdfunding platform, focus on customer traction and momentum among initiators and investors.
Key valuation metrics in the early stage include valuation divided by number of campaigns and successful campaigns.
In the growth stage, the aim is to prove the revenue model and scale rapidly, with valuation metrics like funding value and revenue.
In the late stage, the goal is to maximize profitability, cash flow, and maintain growth, with metrics like EBITDA and P/E ratio.
For more information on crowdfunding, visit SGX Academy or download the digital research paper at SGX.com.
Crowdfunding is one of the fastest-growing online industries, offering various platforms for different funding needs.
Understanding the different types of crowdfunding sites is crucial for potential investors and project initiators.
Valuation metrics vary depending on the stage of growth of a crowdfunding platform, affecting investment decisions.
The growth of the crowdfunding industry is expected to have a significant impact on the global funding landscape.
Investors should consider the stage of growth and corresponding valuation metrics before investing in a crowdfunding platform.
SGX Academy provides educational resources and research papers to help understand the crowdfunding industry.
Transcripts
[Music]
let's talk about one of the fastest
growing online industries crowdfunding
crowdfunding is when individuals or
startups use an online platform to gain
funding for a project globally the
crowdfunding industry raised 16.2
billion us dollars in 2015 and is
projected to grow to 96 billion by 2025.
generally speaking there are four kinds
of crowdfunding sites although some
sites include more than one type of
crowdfunding first debt based sites
these are where contributors receive
interest payments in exchange for their
contributions examples include funded
here crowdo and moola sense
next equity-based sites where
contributors receive shares in exchange
for their contributions examples include
angel list funnel cders and capbridge
third reward based platforms where
contributors are promised rewards in
exchange for their support like first
priority access to the product once it
goes live examples include kickstarter
indiegogo and ulily
finally donation-based platforms where
donations are charitable and usually tax
deductible examples include indiegogo
patreon you caring and friend fund
now crowdfunding websites have to invest
heavily in their platforms upfront and
slowly build up scale so before
investing in a crowdfunding platform
it's important to consider its stage of
growth in the early stage the main focus
should be on customer traction you can
gauge this by the amount of momentum
being built among project initiators and
investors therefore the key valuation
metrics include valuation divided by
number of campaigns valuation divided by
successful campaigns and valuation by
funds raised in the growth stage the aim
is to prove the revenue model and to
scale up as rapidly as possible
therefore the key valuation metrics
include valuation divided by funding
value and valuation divided by revenue
finally in the late stage the goal is to
maximize profitability and cash flow
while maintaining growth therefore the
key valuation metrics include valuation
divided by revenue valuation divided by
ebitda and the p e ratio
those are the basics of crowdfunding
to learn more visit sgxacademy.com
or download the digital research paper
at sgx.com
digital sector and good luck
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