 It's my pleasure to welcome you to this GIST Tech Connect, a webcast of entrepreneurship and innovation topics. Tech Connect is part of the State Department's global innovation through science and technology initiative called GIST. My name is Ambassador David Thorn, and I'm Senior Advisor to Secretary of State John Kerry at the State Department. Together with Secretary Kerry, I am leading a department-wide effort to position economic and commercial issues more prominently within the US foreign policy landscape. I am working to elevate the importance of entrepreneurship, technology and innovation in the State Department's promotion of global prosperity. Innovation and entrepreneurship are key components of promoting prosperity around the world. In particular, science and technology innovation leads to new products and companies that fuel economic growth, create jobs, and address important development challenges in agriculture, energy, health care and other sectors. The State Department is empowering a new generation of global science and technology entrepreneurs through skills building, helping small businesses grow and supporting innovation. Through the GIST initiative, our goal is to unite the power of young people in science and technology to equip young people to be agents of innovative change and economic development around the world. Through a range of activities like competitions, bootcamps, and tech connects like this one, GIST provides innovators with the tools and confidence they need to launch and develop science and technology start-ups that can change the world. The GIST network extends globally and includes over 220,000 entrepreneurs. GIST works with the U.S. and local experts to ensure that participants have the support that they need to help take their ideas and innovations to the marketplace. We believe innovation has no borders and that when you're free to have your own ideas and pursue your own dreams, it means more prosperity and progress for us all. I encourage you to join the GIST community. Innovative entrepreneurs like you are the catalyst for solving challenges both local and global. I'm honored to support your creativity and persistence. And I sincerely want to thank our Tech Connect panel of experts for joining us today to share their experiences and answer your questions. And I'm now pleased to introduce today's moderator. Thank you, Ambassador Thorne. We are very excited to welcome our viewers to today's Global Innovation through science and technology, also known as GIST Tech Connect Global Conversation for crowdfunding your startup venture. We have an incredibly knowledgeable and dynamic panel with us today to answer some of your burning questions about how to crowdfund your startup venture and the development of the crowdfunding movement in the U.S. and in general globally. Our speakers will also share with us their thoughts on how to effectively build your crowdfunding campaign as an entrepreneur and how to leverage your social network to build support, timely support for your own campaign and attract the funding needed. I'm Ovidio Buzharan and I'm the lead for the GIST initiative at CRDF Global. We're very proud to partner with the State Department on this initiative that empowers youth around the world to turn their science and technology ideas into viable ventures that catalyze economic growth. CRDF Global as an organization has been proudly supporting technology entrepreneurs in more than 60 countries for more than 15 years. Our programs are very centered on the entrepreneur, on fostering their efforts of the tech entrepreneurs globally through very practical training such as this one that we are going today, in depth mentorship by connections with very experienced practitioners and as well as access to networks, capital and global expertise, especially from U.S. but also from other countries around the world. Today GIST is thrilled to host the Virtual Connex Web Chat and we're very thankful to our hosts here that connects entrepreneurs and innovators across geographies through the power of technology. So when we designed TechConnect, we thought what can we do to bridge this world where U.S. has a lot of experience in entrepreneurship, especially tech entrepreneurship with opportunities from the emerging markets. In our TechConnect so far we had more than 8,000 viewers from more than 33 countries across the globe, all continents involved. This level of outreach is possible and was possible because of the partnership between the U.S. State Department, CRDF Global and a lot of numerous local partners that are actually organizing viewing sites right now. We have them listed on our website. We're very thankful for your support all around the world and I would like to encourage our audience to use the hashtag at GIST TechConnect when tweeting about the event today. It's very important that you share the lessons and the keen sights from this program as broadly as possible with your network so more people benefit from this knowledge. We are also collecting as usual questions to ask our panelists later in the program so you're most welcome to start sending us questions right away and throughout the program by typing in the chat space below the video. For this specific GIST TechConnect we have extended the duration based on the interest from our viewing sites and our audience to 75 minutes to allow for more questions to be answered and after the program also a new element our speakers will answer a few more questions directly in the web chat. With us in the studio getting down to business we have Jason Best who is the co-founder of Crowdfund Capital Advisors. He has co-founded two leading crowdfunding associations the Crowdfunding Professional Association CFPA and the Crowdfunding Intermediary Regulatory Advocates you got me on the spelling here almost missed the sun. In his current position he works with professional investors, governments, development organizations, professional services, firms and entrepreneurs globally to create the necessary policy and business strategies to fully leverage the power of crowdfunding investing. Also Jason is an author and he authored a great book which is Crowdfunding Investing you're most welcome to check it online I think it provides a lot of the substance behind the crowdfunding movement globally it's a great book. And next we have Luan Cox she is co-founder and CEO of CrowdNetics she is a founding member of the Crowdfunding Professional Association CFPA mentioned before the crowdfunding accreditation for platform standards and the crowdfunding intermediary advocate CFIRA she is also a very proud alumni of the Elite Springboard Accelerator Program the class of 2013 comprised of world's leading women-led media and technology company we have with us and we are very glad to have Kara Kerrigan a force in crowdfunding movement she is president and CEO of Small Business and Entrepreneurship Council she has been called America's Entrepreneurial Envoy and Small Business Ambassador extensive work overseas she is also a founding member of the World Entrepreneurship Forum and a board member and former chair of the Center for International Private Enterprise CIP she was recently named the top power woman in the U.S. crowdfunding by the CEO when we did our research by CEO World Magazine and she has been instrumental actually in moving in building the foundation for the crowdfunding movement in U.S. that led to actually the development of this movement globally and we'll talk about this when we get to questions it's my pleasure also to welcome virtually from Cairo Egypt it's great to have the voice of our entrepreneurs in the program Arm Saleh he is co-founder and CEO of Integrate he developed novel products for the electronic hobbies and education market Arm worked with the team to raise more than 85,000 through a crowdfunding campaign on Kickstarter raising 850% more than its targeted reach and I know that this is one of the criteria where you judge the success of the campaigns as we wait for your questions to come in I would like to start off by asking each one of our speakers a number of questions let's start with Karen the entire crowdfunding movement it took a lot of effort initially to convince people in U.S. to support the legislation required to even allow for this for this to happen I think a fundamental issue that we see both in U.S. and in other, not in U.S. as well but also in other parts of the world more acutely is the lack of funding the lack of access to funding especially for the early stage entrepreneurs idea and early stage entrepreneurs so we see a lot of entrepreneurs globally getting creative in terms of like what they can do they bootstrap, they go through getting customers, they try a lot of efforts to actually power up their initiative and also our women entrepreneurs in particular I think if you can share with us a little bit of the initial thinking on how crowdfunding was thought to kind of help address this need for early funding for the entrepreneurs and how this was built up in U.S. Sure and hello to everyone and entrepreneurs globally and those who support entrepreneurs and thank you so much for inviting me to this event and of course for the State Department for all they do economic opportunity abroad you know access to capital I've traveled globally obviously been advocating for entrepreneurs here in the U.S. for close to 20 years and access to capital has been an enduring challenge I mean tougher in some economic times than others but the whole notion of crowdfunding came out of a problem in the marketplace and I think most particularly following the financial crisis and you know during the recession that followed that quite frankly there was a lack of capital for I mean those who even were successful raising capital having a very difficult time raising capital so start-up capital growth capital really did not it was hard to come by during that period and so the emergence of crowdfunding gift and reward space crowdfunding also sort of came out of that came out of that period where there was a need in the marketplace for entrepreneurs to access to capital in terms of the next phase equity raising equity via crowdfunding and equity or debt via crowdfunding that idea you know came from actually entrepreneurs Jason Best so I can take credit for this Jason Best he really and his partner Sherwood Nice and Zack and you know other entrepreneurs really were the genesis and you know put a lot of effort into helping to get the job jumps out our business start-up act passed which makes equity and debt-based crowdfunding legal we had to change an 80 year old law in order to make equity and debt-based crowdfunding legal so you know essentially it was easier than we thought it would be too I mean but there was a need in the marketplace there was a political need in Washington I've been working on stuff for 10 years and I'm sure you know entrepreneurs also around the world in terms of their advocacy work it takes a long time but there was a need in the marketplace I think there was a very bipartisan support for this there was an openness to doing something to address this critical need members of Congress the White House were hearing this from entrepreneurs that they access to capital was very very difficult so the whole idea of making equity and debt-based crowdfunding legal again through platforms we needed to change the law it took about a year and a half I'll leave out all the details I'll do the readers digest version but within a year and a half Jason and Sherwood Niece's partner and I along with Zach were in the White House where President Obama signed the bill into law now we're finishing up over the securities exchange commission some of the rules and regulation the regulatory framework that's going to govern invest equity and debt-based crowdfunding but really the need in the marketplace there was a problem in the marketplace and thankfully our elected officials responded so this is going to be really wonderful for entrepreneurs I think it's great and like I mentioned after it's getting done it looks easier but I think what's really important is that you work I mean you saw a vision you saw a need in the marketplace and most likely there was also capital available that was not put to good use to powering up new ventures so I think you found a way to bring those things together and what's more important that this sparks a conversation globally as well about this it made sense at this period in time for allowing ordinary investors to invest in the companies that they believe in and the entrepreneurs in the believe in in their communities to help with economic development and help to build the capacity of their entrepreneurs in those communities but so there were some again some outdated laws that needed to be changed in order to make that happen and technology of course social media has come a long way as well in terms of allowing for more of the transparency that will be needed for these types of investment and the investor protection as well but anyway we're just still pushing through the regulations and they're going to happen soon it's great and later on we can chat a little bit about how this would be relevant or applicable for other countries that are actually in the network that may look at setting up those sorts of similar mechanisms and if there are a few key pointers on how they could go about it because we have in the audience also people that build entrepreneurial ecosystems locally one funny aspect is that when I met Sherwood we were both attending an international event and I barely was able to get his attention because he was on his blackberry checking the status of the passing of the he was actually live chatting just to make sure he thinks so there were a lot of things in motion yeah well I think just you know on the final point about this I mean the power of entrepreneurs to get engaged in the policymaking process and actually in the advocacy I think was very important in terms of getting this passed I mean to have elected officials and policymakers here from real entrepreneurs not only about sort of the challenges but also their solutions and solutions that make sense for the 21st century so really it was very critical to have entrepreneurs involved in this whole process and thankfully Jason and Sherwood stepped up yeah I think we will see this in locally happening too I think that's why it's really useful to learn how this was done in the US because most likely and we already seeing examples internationally so Jason in addition to the things I mentioned he also is an entrepreneur himself of course and he also raised funding on crowdfunding so we always attempt in our actually eat be do the thing yourself so what I would like to ask you if you can go a little bit deeper building on what Karen mentioned on the type of crowdfunding existing right now where do you see them existing now both in US and internationally very briefly and then to a certain degree where do you see the role of crowdfunding in the funding cycle for the entrepreneur so there are really three types of crowdfunding rewards based crowdfunding which is the most common and the largest volume of crowdfunding done today on sites like Kickstarter where people would exchange a donation or a contribution in exchange for a reward of some kind for example if I'm a movie maker I'm going to give you a DVD of the movie if I'm a musician or a band then I would provide you with a free download of the album that I'm making so very concrete exchange of pre-purchasing inventory that's typically what happens with businesses are using rewards based sites to pre-purchase inventory in the product it allows you to show product market fit and it allows you to show customer traction which follow-on investors want to see now the other types of securities based crowdfunding that we've helped to create are equity crowdfunding and also debt based crowdfunding so the ability for you to have a stock transaction where you would say I need to raise X amount of dollars to be able to do the following things for my business and you'll receive stock certificates in exchange for that the other is a loan and essentially a small business loan you would get from a bank the ability to crowdfund that loan from your community, from your customers or from other interested parties Great and where do you see this where is the crowdfunding right now it's like in US and also internationally from my point of view I'm constantly getting emails from the different crowdfunding platforms around the world that are being built Eureka is one in the Middle East that's growing it's growing right now and I see different months in Europe, different parts of the world where is the crowdfunding movement right now both in US and globally In the US certainly is the largest market for crowdfunding currently there's an extremely vibrant market for crowdfunding in the UK and some other Western European countries including the Netherlands and Italy and then globally looking at rewards based crowdfunding we're really beginning to see a lot of sites take off there will be hundreds of crowdfunding platforms around the world that are either live today or spooling up to be live soon we're seeing them in all regions of the world we've seen movement early movement in Europe there's a strong crowdfunding industry in Latin America we're also seeing movement in the Middle East and also in Africa and Asia so it really is a global phenomenon Great one of the things I mentioned if you can in a little bit more detail where is the crowdfunding coming into the funding circle so in terms of you and also maybe you consider both US entrepreneurs and international entrepreneurs so I think one of the challenges in entrepreneurship globally has been this sort of missing step between I've got a great idea and a prototype and where a quote-unquote professional investor is ready to fund my business and so I think the initial phases of where we're seeing crowdfunding fit in the initial phase allowing me to get from an idea or concept to a prototype or I have a prototype now I want to see if there are actually customers who are willing to purchase my product because if I can demonstrate to professional investors or even a larger group of crowd funders that I have a customer for the product people like it, people are buying it that means I've got a real business this is no longer a project this is actually a business I want to demonstrate this has really been effective I think what we'll see moving forward as the crowdfunding becomes more prevalent, more common is you will also see businesses who return to their crowd over and over again for funding so it will not just be early stage the way it's seen today but we'll begin to go into larger and larger rounds of capital I don't think it replaces angel investors it doesn't replace venture capital at all it just provides another avenue because the reality is there are many entrepreneurs who have a business model that may not be exactly right for traditional angel investment or venture capital investment and so this is a new way to be able to access your communities and your customers to be able to including diaspora communities to be able to have access to capital great and actually we have Amra as an example we also have one of our GIST entrepreneurs Hin Hobeika from Lebanon that raised 75,000 on Indiegogo and I think an important element given the type of work we are doing with the GIST program it's directly connected to what Ambassador Thorne mentioned where you have entrepreneurs on the ground that build new products, new ideas, new ventures where do they go actually to attract capital and we have international entrepreneurs that actually were able to attract capital from US to power up their ventures and Hin for example this year she got the Consumer Electronics Show Innovation Design Award that's a recognition that innovation can also come from the countries that we are working with but sometimes the much needed capital to actually build the prototype to get the customer base it's very critical too now we are moving to Luan in the funding circle the first step is actually attract some other funding but then as you build your product you start to get market traction where do you go next so if you could share with us a little bit about your company, what you are doing you are an entrepreneur yourself you are connecting with investors, raising funding and a lot of the things that our entrepreneurs are going through as well if you can share with us a little bit about where your company is going into the funding circle and how both entrepreneurs and investors could benefit from this sort of specific service thank you for having me too Ovi so our company and Karen sort of alluded to it a little bit ago we are very focused on providing the education and transparency and the distribution for the investing public to know about these companies so where we would come in CrowdNetica has essentially built the data distribution infrastructure both here in the US and working with partners in Europe so where we would come in is after you've done your rewards based campaign and gotten the validation on a kickstarter or an Indiegogo type site you've got a prototype build maybe some customers then you would move into the what we call crowd finance space this is where the jobs act comes into play where you're going to actually give either securities in exchange for an investment or for money and or issue debt take a loan from the crowd what we are focused on doing then is aggregating bringing together all of the information that is available on various portals such as Angel List or WeFund or CrowdFund or CrowdCube in the UK bringing all the information together and then making it easily searchable and understandable for normal people not professional investors and our first step into that we sort of made history with Dow Jones on October 11th of last year we launched on MarketWatch.com which is a very large financial media portal the very first private company Content Suite so that 7 million people all of a sudden were looking at both public companies like IBM and Apple and doing research but then also smaller companies as well and being able to understand where they could they could invest and create if you could share with two questions one is basically how some of our entrepreneurs that as you mentioned reach a certain stage they raise funding, they build a prototype they start to get some market traction how do you identify those entrepreneurs or how do they find you so that actually provide this sort of visibility into these opportunities the second question is about what type of investors and what type of investors actually are looking into your platform of course to the MarketWatch you have a very broad distribution of different are they more US based, more international do you envision that also some of the international investors could be looking at these sort of opportunities and using your platform as a way to kind of identify because I know from abroad also invest in some companies in US too so it's interesting to see the dynamics both ways yeah so in terms of how an entrepreneur or a new issuer sort of how we refer to them would find us is they would need to select a portal we can obviously we're going to talk more about that today but they need to select a portal from which to do their crowd financing we have relationships with most of the prominent portals in the US and UK and those portals then funnel that information to us and we become then a distribution mechanism to investors in terms of what types of investors are looking at this you're right definitely there's an international component US international investors looking into US companies and vice versa but right now we have some regulatory constraints title 2 crowd funding allows for everyone to invest for example regardless of how much money you make or how much you're worth today right now you're only allowed to invest if you are accredited which accredited meaning you make a certain amount of money so under the jobs act title 2 we are allowed to broadcast these offerings to everyone but only accredited investors can invest today and the work that Jason and Karen are doing working with the SEC hopefully title 3 crowd funding will help change that they are working on this as we speak so it's the next wave of development so I'd like to thank you very much we mentioned about the different platforms few months ago we also interviewed Slava Rubin who is the founder of Indiegogo and he mentioned some of the things they learned from looking at the campaigns because I would like now to move a little bit deeper into actually what it takes for an entrepreneur to raise funding so the things he mentioned me he analyzed over 150,000 campaign on Indiegogo which is the most data of any platform that they know and they come up with three things on the matter first of all number one is having a good pitch, number two is being proactive and number three is finding an audience that cares so part of having a good pitch we know that if you have a video you will raise 20% more money than if you don't have a video we know that typically a campaign will hit its target on day 36 on average of a 47 day long campaign number two is to be proactive we know that if you have a fast start and you raise 25% of your funding within the first week you are five times more likely to hit your target and finally it is finding an audience that cares so you move from your inner circle the smaller circle to a broader audience of strangers that is when you have a higher activity and action and that you become more discoverable on Indiegogo we are getting a lot of questions from our viewers and I think we will move straight to the questions from our audience which is great Amra is not available via Skype right now but he will be available to answer questions after the program on the chat very great insights I think to set up the framework for our conversation and I think we will be moving more into answering more particular questions from our audience on how the specific knowledge that you have could be relevant for our audience we start with Nadir Lafendi from Algeria can you crowdfund on different platforms at the same time and feel free any one of you that so Nadir that is possible to do technically however it is really best to focus your efforts on one platform you are really going to be one of the keys to success about having a successful crowdfunding campaign is you have to start with your friends and family demonstrate that you have backers who know you well before a campaign will go viral before a campaign will have broader donors or investors from people that don't know you personally so it is really best to focus your efforts in one platform the one that is right for you and we are going to talk more about that later and then build from there great the next question is Mirza Avaiz Ahmad from Pakistan how you make it to the front of a crowdfunding website what are the criteria for that I mean we are seeing a lot of campaigns right now a lot of platforms how you navigate and how you put yourself in the so you get more attention like this I mean every platform is different it's a great question if anybody here knew that answer we would probably make a lot of money but each platform has different criteria I think the best advice that we can give is to just try to gain as much support and momentum and speed around you know Slava mentioned that campaigns get funded on average in 36 days clearly a campaign that has a lot of interest in the first couple days will be on the front page so you just have to keep doing what you normally would do and not depend on trying to get on the home page because you'll be competing against thousands at the end of the day it's your crowd it's your family friends network that's going to crowdfund you not a website I would agree with all that but also you know just having your core network you know of support sort of there for you and sort of pre pledged you know before you launch is very very critical so that you start out very successful when you first launch you do have that core network that all this is done before you launch your campaign before you launch the campaign again that will show that this is a successful campaign and then hopefully that will get you on the front page great so based on what Slava mentioned what you all mentioned I see a number of concentric circles so basically you start with the inner circle of friends and family that you need to really super activate and hopefully you also have friends that have broad social network so you kind of expand the impact from the get go from the initial design you have the initial buy in but at the same time you are looking at how you can leverage how you can navigate different social media so you amplify so you need to do a lot of preparatory work ahead of actually launching the campaign because you will actually like with anything in life you'll be competing against other entrepreneurs for attention for the capital so on and so forth one other comment I think you may if you confirm or not I think there also I see companies starting to be providing a service how you can get funding on the crowdfunding platforms they are really good at actually doing these things preparing the entrepreneur if they have a really good product or ventures activating they will have networks do you see this also happening? actually we are very closely partnered with a company that we think is doing a lot of work in this space called Crowdcast and also Crowdfund Academy and what they are doing in Sally who runs that company they are trying to educate people on how to crowdfund helping them with their video teaching them how to do social media and not relying so much again on the website to do the work because the website won't there's a lot of good companies doing work around that I think it's a natural evolution of things building the entire ecosystem Ana Gemma Galejo from Spain to the public on crowdfunding and what are some of the specific ways to reach a lot of people you know I think I'll just reinforce the fact that where you want to start is with the people that you know because the way you get social sharing and the way a campaign becomes viral is when you're able to demonstrate you've got good early traction how to do that number one you need to have a very disciplined plan really well so to start with before you ever launch publicly on a crowdfunding campaign on a crowdfunding platform all of your immediate friends and family your closest supporters need to know what you're going to do and need to know they're going to be called upon on a specific day to donate whatever or invest whatever they are going to invest within a certain period of time really those people who can actually call and say I need you to be a contributor to my campaign in the next 48 hours because you're going to be sitting across the table from them in a few days maybe at a family meal or at a friend's house and then you move out to that next concentric circle the people that you are good friends with to demonstrate that early traction because you know like at a good party no one wants to be first on the dance floor and you have to be able to demonstrate that you've got that traction that this is a good idea and other people can be part of that once you have that early traction you get to 30% of your fundraising goal early then that is the tipping point for other people who are not as closely related or closely know you to be willing to invest or to contribute to your campaign and so the other piece of this again from a virality perspective again planning planning planning the most important phase of a crowdfunding campaign is before you even launch so you have a very specific campaign day by day by day of the activities you're going to execute in order to be successful yeah great yeah I mean that is so important what Jason mentioned I mean just again that core network and also to have that core network or even your loyal customers be brand ambassadors you know for your campaign as well to ask them to reach out you know to their networks in terms of broad support I mean broad outreach you know one of the things that we found in some of the more successful campaigns we had a crowdfunding contest in our actual winner used the media very well in terms of letting the public at large know about their you know campaign so earn media you know contacting reporters doing talk radio shows having people do blogs about your you know blogs about your effort very targeted if you're in a certain industry you can sort of maybe target your media but you know that is if you're media savvy or reach out to reporters or people in the media I mean they'd be willing to particularly if you have a compelling story about why you're raising the money what you need the money for yeah that's great and I think you know you guess the next topic of the Tech Connect which is attracting media attention for your start there we go I think to briefly just a brief confirmation I'm thinking in terms of getting the buzz getting the support to what degree kind of signing up a celebrity or someone that believes in your sort of product could from the get go amplify the potential success of your startup do you see this in oh yeah I mean this is marketing I asked an obvious question which is which celebrity right right right influential validators I think it's it's a much it's nice to see the influential validators and I think when you design a campaign it's really important to see who would be this type of influential validators that will have an influence in the potential target audience for this sort of funding campaign it needs to be relevant to that like that influential validator that celebrity has to truly is to be authentic with their brand it needs to be aligned with who they are so they can be passionate and authentic when they're talking about the campaign next embassy Armenia we have a good number of viewing sites with the embassies thank you all for your support how important is it to have your startup operational before you start raising money through crowdfunding I think that there are campaigns that begin with a concept or an idea typically we see more success with campaigns that already have a prototype that they can at least demonstrate through their video and talk about very passionately and have potential customers speak to so that having that prototype or having at least a couple of early customers I think gives you a better chance for success that's great and it also depends on what stage again you are in your crowdfunding funding life in terms of the persuasion element that's what also Slava mentioned it is critical to have a video component that maybe can communicate in a very succinct manner what is the story behind what is the product how do you plan to address it in a way that connects with the audience maybe better that if you have just like a print version or a text right so yeah okay we have a question for we have also Amra on the phone with us welcome Amra how are you doing Hi Uvidio I'm all good I'm sorry I apologize for the disconnections and disconnections that happened here no problem no problem thank you for being with us we're very glad to have you with us and let's it would be great to learn from your perspective you've been very successfully attracted capital crowdfunding capital on Kickstarter and you kind of went 850% over your initial target which is a very clear indicator of success on the crowdfunding platforms if you could share with your audience that is very international in nature a global in nature what are some of the key things that you have done if you could link it to some of the things that our speakers in the studio mentioned what some of the things that work some of the things that did not work that you could share with our entrepreneurs okay well first off when doing crowdfunding you have to search for the most suitable crowdfunding website you would launch on some people launch on their own websites and some use the already existing crowdfunding platforms because they already have the audience they already have the history of doing a lot of successful crowdfunding campaigns so the backers can trust them and in our case we chose Kickstarter because our product was a it's a very tech related product it's target market is very niche and we were targeting the US market specifically so that now is that now it all be options into two which are Kickstarter and Indiegogo and Indiegogo gives some flexible options like getting the flexible funding I mean not all or nothing like Kickstarter and maybe it takes less percentage it is open for any project creator from any country but when we decided to go for Kickstarter it's because the number of related tech projects that were done before on Kickstarter were much higher than that of on Indiegogo so we selected first Kickstarter it was very tough for us it was very intensive to plan for the campaign before it starts and one of the we read more than 75 case studies about successful and failure projects that went on Kickstarter before and the most important part was is that when someone does a crowdfunding campaign we expect that when I put my project on Kickstarter the pledges will go on instantly at the switch of the button we wish it was that easy that is a very big misconception because you have to get the tribe before even getting on the crowdfunding work site or the platform so what we did is we launched in an event nearly three weeks before the campaign we launched the product and some of the big pledges wrote about us like TechCrunch and Hackaday and that gave us like a wide base of email subscriptions for the product itself so that we notified them once we launched and this was mainly the major issue that got the campaign to be funded in only less than six hours amazing, it's great to hear the validation of some of the points that our speakers here mentioned about but it was really critical your point about choosing the right platform to start with first of all looking at the number of potential investors or people that could put in money in your venture but also the type of campaigns and the type of audience that you are looking at okay that's great to know what other key insights that you learned actually after you launched how did you go we mentioned here about starting the circle and then going beyond that you mentioned like using being picked up by some of the blogs reputable blogs which is great what other things you have done to actually go beyond the inner core group of supporters which is also critical to build but I think it's also critical once you reach that initial goal of what we mentioned 25-30% of the funding how do you move beyond that the important thing before launching is to well present your product and well present yourself because these people are going to give you money that and these people don't know you don't know even who you are what is your previous experience so you have to design everything to fulfill all questions that are asked and that are asked by backers like what is your technical experience are you capable of getting this product you have to well present yourself in in a video we made a very good video but it only had one disadvantage is that it was 5 minutes and so you have to keep your video more less than 3 minutes or such it won't exceed this 3 minutes that's a good video you have to be responsive extremely responsive any message any comment you have to reply as soon as possible because these guys the backers need direct communication with you all along the campaign itself you have to answer questions you have to be transparent and you have to of course plan well on your timeline before you promise so that you don't over promise what you say like if I'm going to deliver the product after 2 months it's not realistic you have to test and you have to deliver it right and this is the biggest challenge we are facing right now we are doing our best to fulfill the work with the backers within the timeline great, great I think from what I'm reading is actually you need a compelling story to sell initially to your core group of friends and family but for the next level you need to show the ability to execute your capacity of actually taking a prototype and moving to the next phases so even the communication within that video most likely will differ a little bit while still having elements of the story you move actually to your ability to execute and implement because you are handling an audience that doesn't know you that well so you have to both sell yourself and the team as well in the process we will move now to more questions from the audience for Luan Jehan from Pakistan what kind of startups are more suitable for crowdfunding is it for everyone that's a great question Jehan and I know Karen and Jason could answer just as well as I no not all startups are necessarily fit for crowdfunding and when I talk about crowdfunding I'm talking about crowdfunding for securities or crowd finance not necessarily just rewards based it depends on the type of company you are consumer-based companies typically do very well and you have a product whether it's a watch or some wearable technology these obviously do very well where there's a broad appeal and you're trying to sell something to individuals these companies tend to do well in the crowdfunding world if you're a biotechnology company that needs at some point a billion dollars probably crowdfunding is not a good place to start feel free to chime in I happen to think that if you're meeting if you're solving a solution in the marketplace and if you can articulate that to the crowd and if you're targeting your efforts and going to the right crowd then anyone can raise money via crowdfunding but certainly you do have to be you have to have your act together as Amar said you have to have the whole package you have to be meeting the need in the marketplace you have to be solving a solution in the marketplace and also if you are a biotechnology company for example you may not go to the broader crowd but there may be a site developing just for you so I think there is targeting involved here when I think of successful crowd funders of attributes of successful entrepreneurs you know what I mean you have to have those attributes and strengths that are going to make you a successful crowd funder as well so you do have to I think you know display you know the credibility the confidence the great communication skills all those types of things going to allow you to successfully crowd fund what Amar was mentioning as a fun fact Slava mentioned me that actually on the existing top crowdfunding platforms people are raising funding to launch new crowdfunding platforms he mentioned that I'm surprised he's allowing that to happen it's like a healthy competition for Jason question from Karachi Pakistan we have a very good community of just community in Pakistan apart from the US how many other countries have passed the legislation to make crowdfunding legal and what are the global trends for crowdfunding where do you see this going so there are just a handful of countries to date that have passed legislation for allowing securities based crowdfunding the UK Italy, Netherlands, the US a few other countries Australia of course so we've had securities based crowdfunding for the longest period of time and so there are a number of countries I think that you know if we're looking at how entrepreneurs can help move this forward because certainly we've been we've now worked in 25 countries on six continents and so we've met with a number of entrepreneurs with government officials with multilateral organizations securities regulators and hearing their challenges and many of them are the same conversations or similar conversations that we had here in the US and really it comes down to three things how are you going to protect investors how are you actually going to deliver capital to the right entrepreneurs and how do you provide regulatory oversight for the securities regulators because one of the things that we did was to say we want this to be a regulated industry because we want to make sure that it's a vibrant and stable industry which is the only kind of industry for crowdfunding that's going to make it successful long term and so the things that are a couple of quick keys on making a legal change and I think that these are universal number one everyone knows the challenges what you need to do is come up with a creative solution to those problems what we did was we came to Washington and we began working with Karen we had a framework that we created we took the current law that was written 80 years ago and we wrote what we believed was a rational update a ten point framework of how we could modernize those securities regulations about how to use digital media to raise capital on the web and then we began working with government officials the power of showing up is key number two the ability to actually go and meet face to face with regulators with legislators with people in the ministries of finance ministries of commerce ministries of the treasury to be able to demonstrate who you are why you believe this so passionately and frankly the fact that these initiatives cost the government nearly zero dollars and so finding creating a solution that you can deliver to a government official that you're not asking for any money you're just asking for the opportunity to work hard can be really compelling great we have a question for Karen and after I have another question for Amra so for Karen Erbil from Iraq why is reward based funding more popular than the other crowdfunding models and also is government support required for a successful crowdfunding campaign well I think reward space is the most popular this point because it's been around the longest and it's actually legal here in the US I mean accredited crowdfunding you know is up and running and you know that's been successful but we still need to get the framework fully developed and finalized in the US before the next waves of the equity and debt based crowdfunding so reward space has been but also moving forward I think reward space is going to remain very popular because it you know basically ease of access and you know what it can do in terms of validating your product or idea raising small amounts of capitals building on that maybe to move to an equity a finance equity crowdfunding campaign the second question was about involving the crowdfunding campaign or what sort of what's the role of the government in everything really right now it's regulatory currently for rewards and gift based I mean not involved at all but certainly in the equity and debt based crowdfunding space it is providing that regulatory framework to make it happen but not after after this is it's laid out basically it's a marketplace and then it's a marketplace the platforms themselves will have to comply with certain reporting requirements I mean issuers certainly do have the business owners themselves the entrepreneurs have a lot of government requirements in order to raise money on these platforms so there is going to be that type of reporting that type of compliance a fair amount of work that they're going to have to do in order to take advantage of these platforms and that's why we've really been focused on also building the infrastructure required to provide this level of transparency because now we're moving to a world now where new types of investments are being born globally and just like stocks just like bonds there needs to be a way for people to make sure that they can see all the information in one place and the regulators want that as well globally you know I think it's great and they are both complementary points I'd like to move to Amra with the question we were discussing here in the studio how important is actually once you have a core group and not just a core group the people that actually invested in your invested they kind of supported you through the crowdfunding platform how do you actually engage them how do you learn from them how do you shape improve the product of what you have based on some of the insights how do you, because in a way there's the voice of the marketplace to a certain degree if you've done your work and you are connected to the right sort of audience that actually could validate invalidate or improve some of your initial thinking on the product its role on the market have you done some of your efforts in this regard and then maybe if any of the speakers in the studio could add to that yeah I guess that is a great question because one of the reasons that people go to crowdfunding platforms is product validation you are selling the product before even manufacturing it all the rewards we get is like some pre-orders because when you exceed your target people are not paying money to support you anymore they are paying money to get your product so it's a great product validation tool and about the getting feedback on your product it's amazing because we actually crowd source ideas we learned a lot from our backers they suggested a lot of features to be added and that got us great insights about the product and about the market we didn't think that for example a lot of requests on the Windows phone we were focusing on Android and we expected of course to get requests on the iPhone but we didn't expect to get that much requests on the Windows phone so now we are planning to do the Windows phone application so it's a great tool for product validation it's a great tool for learning about the market itself great thank you very much Amra it's great to learn that you are actually walking the walk a question from one of our newest partners on the GIST initiative Azerbaijan High Tech Park what are the legal implications of a company raising crowdfunding on a US based platform well on the rewards based side companies are able to do that very easily however on the equity based side you need to be a US registered corporation for example a Delaware corporation is one common example and we know a number of companies outside of the United States that have incorporated in the US so that they're able to then raise money for securities whether it be through a traditional private offering or through crowdfunding investing in the future great for Luan the next question from Susan from Bermuda how do you avoid competitors from stealing your ideas within your crowdfunding core group we always get this question not just crowdfunding yeah well this is a question every entrepreneur asks themselves and this is a very personal answer I personally believe that regardless whether or not you're using crowdfunding or other ways to raise money you have to tell people about your idea and if you have an idea that's easily replicable or easy to copy you might want to come up with a different idea now that said in the crowdfunding world you're not giving away everything you're giving away just enough to get people interested and again yeah it's a risk because you want people to buy your product up front great you want to add well this is why we as an organization are very big advocates of strengthening IP both intellectual property protections and rights at home and abroad but also I mean you run that risk if you're crowdfunding or not I think the key differentiator is the entrepreneur themselves and their excellence in terms of how they execute and the passion that they have and the quality that they bring to bringing that product to the market and this is one from the ideation panel we had a similar question actually and our speakers both Nolan Bushnell and Jeff Hoffman mentioned that the key is in the execution you have a great idea and you run as hard as you can to actually implement it get it done and differentiate yourself through the IP by connecting Embassy Armenia what are the best ways to proceed after you raise money on crowdfunding how do you demonstrate results and is it advisable to crowdfund for your second round already well I think it's a great question because we have so many times people focus only on how do I get to my goal and not about what do I do after it's over and really the most the second most important thing to think about after you're planning it before you start is how am I going to then communicate and engage with my audience with my funders whether it's through securities or through rewards over time the number one reason for that is and maybe Armour has some experience in this is things rarely go exactly to plan when you're developing your service it's shocking things are going to go wrong things are going to be different things aren't going to be perfect and so the ability to regularly communicate with your audience over time is really important I'll just tell one quick story a campaign that I contributed to in a coffee making apparatus that I found on Kickstarter I thought it was really cool I thought the video was really compelling I bought the system I was told it was going to be available in about 60 days it took six months for me to get it but what kept myself and the other funders calm and not worried about our money that we had given to this entrepreneur was every one to two weeks I had an email with an update about what was happening that had videos or photos of what was taking place and communicating regularly to the different challenges that he was experiencing now what was great about that is one I felt like I knew what was happening and all of those were very rational understandable issues but number two, just as Omar said the things you're going to learn from your funders are amazing and what that entrepreneur was able to do was able to connect with so many people who could make suggestions or resources to make their process more efficient and more effective great we have a viewing group from Iraq and Karen maybe if you could answer the question why has crowdfunding grown so quickly in the U.S. but maybe it's growing a little bit more slowly in other regions such as Middle East what are some of the global trends that you see and where do you see crowdfunding in five years and everyone is welcome to connect maybe Jason could better answer the question in terms of the trends here in the U.S. I think just because of the entrepreneurial culture here in the U.S. the emergence of crowdfunding here in the U.S. that's why I think it is booming and flourishing and will continue to grow globally there are some cultural issues there are some legal issues in terms of transactions and things like that there are barriers to crowdfunding but where I see it growing in five years I think it's going to be awesome for entrepreneurs not only in the U.S. but also on a global basis because entrepreneurs need access to capital governments need entrepreneurship to flourish in their country they want economic stability they need jobs, they need economic growth and crowdfunding is a great way is a common sense way for entrepreneurs to get this capital sorry Jason it's going to be huge especially in the U.S. most people don't realize it we have a very educated audience here thanks to the work you do but most of Americans still do not know what crowdfunding is we've got a long education runway we've got a long way to go to help empower the rest of America whether you're on the east coast or west coast all the way in the middle and that includes small business owners they don't even know about rewards based crowdfunding much less securities based we're just at the tip of the iceberg I think that's the case really with a number of different platforms where you have in different countries typically rewards goes first because as Karen said it's legal and controlling what people are donating money securities issues are very different I think that one of the things that we found in the conversations we've had with an increasing number of governments and regulators and multilateral organizations around the world is really trying to understand what are the key structural decisions that they need to make in their markets to be able to make regulation that will actually work and I think that's one of the really powerful things that entrepreneurs in different countries can do again is to be able to understand the challenges in your local market and you can make recommendations on how being able to demonstrate to regulators how this could be done be able to point to the global data that demonstrates how small fraud is as a percentage of campaigns compared with the even more traditional type of companies if you look at these issues it's less than one tenth of one percent of crowdfunding campaigns have been found to be fraudulent so a tiny, tiny fraction can you eliminate fraud no but it can be really but because of the vigilance of the crowd the ability of these crowds to have more visibility really helps they are used also on the reputation based on eBay and all the other mechanisms where basically you have the self-regulation of the crowd where you can all the Airbnb and all the other things so you can have reputation based in addition to the regular thing and there have been a handful of campaigns where people have attempted fraud but the crowd typically finds those have developed very sophisticated algorithms for protecting people and also the crowd is able to see wait a minute you've copied and pasted those images from a different site or I know that's not a real video game or those sorts of things you have multiple eyes on the same thing you don't have just one person we have the next question from one of our transformers just transformers Maria Omar from Pakistan, hi Maria what are the payment mechanisms that are being placed in order to crowd fund is PayPal a must payment is the biggest issue globally how are you going to handle that in fact one of the companies that we advise in Beirut Zumel has just been able to handle that issue for themselves to be able to create a payment mechanism with an online payment processor to be able to handle payments globally and I think that that's really certainly is useful in a lot of countries but there are many countries that PayPal doesn't work and so I think the challenge and the opportunity for entrepreneurs number one it creates an opportunity for entrepreneurs and countries to figure this solution out in the local market but number two to be able to use the web to find those types of funding platforms and those types of processors of payments who are willing to be creative and create the right solutions I want to add on that mechanism I want to add on the things that Maria is doing a very interesting effort to actually build a platform that will provide job opportunities to women in Pakistan and beyond and I mentioned we spoke briefly with Karen about this how do you see the crowdfunding the potential availability of capital to the crowdfunding actually empowering women to start new ventures both technology and other types of ventures globally I mean do you see this in U.S. happening you see this kind of going globally as well yes I mean to steal a phrase it is a game changer for women entrepreneurs in the U.S. and also globally you know if you talk to women here in the U.S. but also globally they have the same issues the same barriers access to capital access to markets sometimes access to technical information so crowdfunding is more than just raising capital it is access to a a wide variety of things that are going to help women entrepreneurs grow so the leveling of the playing field when it comes to accessing capital is just absolutely amazing but there are also your crowd there are gems in the crowd as Jason I think alluded to I mean with one of our again we hosted a crowdfunding competition the women entrepreneurs who won that competition found some amazing mentors now what do you do post crowdfunding well one of the things they did is look at the crowd but they found amazing mentors successful entrepreneurs in their crowd that are helping them take their business to the next level so that then they can raise the next round of financing for their business I think it's critical when you go as an entrepreneur to attract capital to be mindful of all the other types of resources that you will actually have in the audience that decided to back your venture that you talk mentorship expertise maybe access to market channels so when you go with this campaign you kind of have to look at the various sorts of additional resources that you can locate and for women working out of their home or need some flexibility you know in terms of starting a business I mean what you know if you can't do a focus group you know in another city if you can't travel that much being the crowd you know the crowd is your focus group the crowd is your tester is your validator so I think it's terrific for women entrepreneurs I agree I mean less than 3% of women-led companies in the United States get venture capital funding less than 3% today so it's critical it is a game changer and great work that Maria is doing I think that we also have to think even broader we have a great company here in the U.S. run by a woman named Deborah Jackson called Plum Alley which Maria should check out plumalley.co and she's taken the whole aspect of supporting women beyond just crowd funding so how can I help women sell their products online how can I help them build an advisory network to run their businesses and then how can I get their products and services for crowd funded so it's a nice model and we'll be glad to make an introduction to Maria because actually we see also a lot of other networks like Glowwork for example from Saudi Arabia that actually build a platform that allow women to work remotely like you say from different locations to kind of build up because they're very educated and also in the GIS network very successful women entrepreneurs that actually are leveraging these new platforms to attract new support we're moving to another question from the audience Ash if you can give him some advice on starting a crowd funding platform in a fairly new market that isn't very familiar with the idea any one of you I'm happy to take that because we also provide portal technology for companies who want to launch a portal yeah so there's two ways to do it you can build from the ground up or you can partner with there's actually three ways build from the ground up you can start with another existing portal CrowdCube for example in the UK is openly looking for partnerships outside of the UK and the security space world and or by the technology or license it but in any case there's sort of two different choices you need to decide you're going to be a rewards based platform which is significantly less complicated and if you decide you want to be a security make sure it's legal in your country it's a key checklist yes but in any case get ready for a long design and development and testing process if you want to have a quality site we don't advise anybody to get in you're getting into the financial services business and I think that new portal entrants need to really realize that and appreciate that great thank you very much Luan for Jason Allen from Talentech how do London, US, Israel crowdfund platforms compare to one another well Allen I think it really depends on what part of the crowdfunding market you're talking about I think there are if you look at I guess what I would say about for the UK market UK versus US UK has had securities based crowdfunding now for three years there was a recent study that was done with Cambridge and UC Berkeley and Nesta they did a great job of outlining what a light touch regulatory environment a willing crowd of potential donors and investors and a responsible industry are able to do and to be able to create a multi-billion dollar market in a very short period of time and so I think that it's a great case study of looking at what a market can, that an orderly market can form in a very short period of time to deliver a lot of impact between 2012 and 2013 and the market double for crowd finance and I would like to invite each one of you your top advice if there's one thing our entrepreneurs should do and what they should do to actually be very successful on Chrome one thing that's one thing and then we'll wrap it up please well I would say basically look at what and if you go to sites and look at what sort of walk through what they have done there are best practices out there you mentioned indiegogo.com they have their whole best practice resource, visit these sites to learn the lessons of successful campaigns and that way you don't waste a lot of time and resources you're making mistakes, absolutely Luan get your friends and families support first, they are the people who know you the best they trust you, they think you're probably pretty smart if they don't invest in you who will so go to them first the key the other thing I would add to that is you need to you need to give before you ask and so when people think about virality it's about how you're going to give to the community you're adding value to an online community before you ask for money and so after you've secured the work and the support of your family and friends how do you go to that next level is by demonstrating you're going to give before you ask and I think that the work that Amar did is amazing I met Amar when I was recently in Cairo I'll be back there again in a couple of weeks and I think that the campaign that he and his team put together is really a great example to execute a crowdfunding campaign just one more thing crowdfund investing we have the book right here by Jason she helped me out we have a great resource right here the A to Z and it's very detailed actually just kind of tapping the very specific components of the crowdfunding Amar what is your first thing that the one thing you advise our partners I would say build a good product and engage the community a lot just like you guys all said it's all about the community get your family your friends everyone in your community to support you this will engage very much a good momentum at the beginning of your campaign if you get to 30% then you're good to go and try not to put a high target for your goal make it as low as possible to cover your expenses and once your campaign hits your target pledges will flow normally it's a typical thing wonderful wonderful insights and as always time flies with the connect I'm afraid we are out of time thank you so much to our wonderful panelists Karen, Luan, Jason and Amar and also to everyone viewing today thank you very much for being with us and for all the wonderful questions special thanks to the hosts around the globe for mobilizing their entrepreneurial communities and be with us we can continue to help each other and our local entrepreneurship communities by staying involved with the GIST initiative to find out more about how to get involved with GIST please visit our website at www GISTinitiative.org and also like us on Facebook we have a growing community of about 230,000 entrepreneurs from all around the world that actually share opportunities with one another GIST builds capacity and strengthens the entrepreneurial ecosystem across Africa Asia, Middle East, Turkey this initiative that's led by the Department of State and CRDF Global and supports the most promising tech entrepreneurs and supports them through skills, practical skills development, networking and financial advice the activities of GIST includes like it was mentioned technology idea competition in conjunction with the annual entrepreneurship summit that this year will happen in Morocco we also include the Tech Connect and the interactive webcast like this one that brings together great entrepreneurial minds and the startup boot camps that provided more in depth training and mentorship the last one we did was in Jordan in December we connected over 2.6 million youth with entrepreneurship resources that the State Department social media platforms have we train more than 3,500 entrepreneurs global 230,000 community of entrepreneurs members of GIST are very eager to take on the challenges we're talking we already have concrete examples of people that have been on the crowdfunding platform's race funding like HINT, like AMRA and actually taking their innovative ideas to market that's nothing more powerful than actually taking one idea and implementing and generating jobs like the Ambassador Thorne mentioned as well to close I would like to emphasize how important it is to continue to look at the novel ways of attracting funding for your venture and I'm very glad that the crowdfunding movement exists first in US and it's growing internationally because we see the results of how this translates into support for our entrepreneurs and how it helps them actually making their dreams come true today program is just a starting point on your journey to crowdfund your startup venture and in your journey you should like you heard the advice here of entrepreneurs what Karen mentioned did it before and reach out to them AMRA is a great case in point of an entrepreneur who walk the walk and attracting the financial support in a very intelligent way it's not just the capital but all the other additional resources HINT is another great entrepreneur that walk the walk we at GIST know that you can do it as well obviously the opportunity is here there's the power of the technology becoming more available both for international and US entrepreneurs and it's all about creating opportunities for your venture and actually acting on it we hope that you can join us for our upcoming tech connecting on April 2014 April 2nd attracting media attention for your venture where we'll have an amazing lineup of speakers such as Mark Roberg senior VP of sales for HubSpot one of the fastest growing unbound marketing online marketing companies right now staying informed about this and other GIST programs by signing up for our newsletter using the link that will appear on your screen and joining our Facebook community until then take care and keep it touch and see you on April 2nd thank you very much thank you all terrific