For Your Entertainment (FYE)
“Fundraising can seem like a daunting prospect to even the most seasoned entrepreneur. Traditionally, there are pitches to be made, angel investors to woo, skeptical lenders to convince. But crowdfunding – where a web campaign is used to get a large group of people to contribute small sums of money each to a project – is helping redefine the terrain. Researchers at Massolution estimate that total pledges worldwide reached some $5 billion last year. Asia accounted for only a fraction of that amount. But that, it seems, is starting to change.”
“It’s no surprise plenty of opportunists are vying for a slice of the action. The World Bank predicts that investments in the developing world alone could hit $93 billion in 20 years.
In Asia, the race is on to be the region’s Kickstarter (link) – the industry’s undisputed leader. Launched in the United States in 2009 as an avenue for creative projects to seek financing, the platform announced last month that it had passed $1 billion dollars in pledges. Its success stories include the Pebble smart watch, which set out in 2012 to raise just $100,000 but received a record $10.2 million instead. Last week, the Micro 3D Printer hit $2 million in pledges on Kickstarter in just 48 hours.”
There are a few “caveat”:
“What are you raising funds to do? Having a focused and well-defined project with a clear beginning and end is vital. For example: recording a new album is a finite project — the project finishes when the band releases the album — but launching a music career is not. There is no end, just an ongoing effort. Kickstarter is open only to finite projects.(i.e.., “what’s in it for the investor?”)
“With a precisely defined goal, expectations are transparent for both the creator and potential backers. Backers can judge how realistic the project’s goals are, as well as the project creator’s ability to complete them. And for creators, the practice of defining a project’s goal establishes the scope of the endeavor, often an important step in the creative process.”(Remember the “SMART”Goal & Objectives mnemonic, “Specific”, “Measurable”, “Achievable”, “Realistic”, “Time-Bound”, particularly the “R, Realistic” and the “T, Time-Bound”).
“Kickstarter(“Crowdfunding”) isn’t “charity”: they champion exchanges that are a mix of commerce and patronage, and the numbers bear this out. To date the most popular pledge amount is $25 and the average pledge is around $70. Small amounts are where it’s at: projects without a reward of $20 or less succeed 28% of the time, while projects with a reward of $20 or less succeed 45% of the time.”
“There is no magic bullet, and they encourage every project to be as creative and true to itself as possible. Put yourself in your backers’ shoes: would you drop the cash on your rewards? The answer to that question will tell you a lot about your project’s potential.”
“Jacqueline Low, the chief operating officer at Janus Corporate Solutions, a corporate services firm in Singapore which has some experience of working with new start-ups, said Asia needs to cultivate a more accepting mindset towards failure if entrepreneurism is to grow.”
” “Asians have a strong ‘saving-face’ mentality where they’re generally unforgiving of failures, as it is perceived that failures mean weakness,” she said. “Therefore, there are unfair expectations on entrepreneurs and failed entrepreneurs are looked down upon. For fear of failure so many great ideas are put to sleep before seeing a streak of light.””
“”I believe it is more about Asian society’s non-acceptance of failure that is a hindrance to young people going down the entrepreneur route in larger numbers,” Jay Jhaveri, head of business development for Asia, at research firm Wealth-X, with reference to a ‘celebration of failure.”
“”Although going by the rate of company registration we may conclude Singaporeans rank high in entrepreneurship, innovation is lacking. The stigma of failure prevents entrepreneurs from trying new ideas so they continue to play safe. But there appears to be small changes setting in, with the much younger entrepreneurs coming in,” said Low at Janus.”
“She adds that in the case of Singapore, there are specific programs such as NUS (National University of Singapore) Enterprise to provide mentoring and funding support for entrepreneurs.”