Crowdfunding your Business Idea

INTRODUCTION

Welcome to the Game-Changer’s WebQuest Compendium of Entrepreneurship Skills Development Challenges! “Crowdfunding your Business Idea” WebQuest addresses the “Resources” competence area of the EntreComp Framework and helps you develop your knowledge and skills in the key competence “Financial & Economic Literacy”.

Innovative business ideas, products and business models are the foundations of a promising business. But, in order to turn those ideas into products is challenging. Funding is crucial for hiring the right people, for purchasing the raw materials, for establishing the premises, for using the appropriate technology, for developing and launching a winning marketing strategy and so on.

There are various ways of raising money such as asking money from family and friends, asking for a bank loan, applying for a grant, finding an angel investor, seeking venture capital. But it’s very difficult to persuade a bank or a venture capitalist to give you money for a promising business idea.

There is another way that has a long and rich history with roots going back to the 1800’s. In 1885, when the U.S. couldn’t raise enough money to pay for the base of the Statue of Liberty, Pulitzer used his newspaper, The New York World, to collect funds from more than 160.000 donors in just five months. This way nowadays is known as “Crowdfunding”. The form it has today, in the digital era, kickstarted in 1997, when the fans of the British rock band Marillion donated $60k by utilising the power of internet.

TASKS

You are working for a small NGO committed to implement projects that protect the environment. After an ideation session with your colleagues, you ended up with some ideas for some new products and services, which will be available online and offline and will help in raising community awareness regarding the actions that could be taken in reducing the environmental footprint of the people living in this community. You are sitting with your colleagues and you are trying to find out ways in order to raise seed money for staring implementing these ideas, as the chairman of the NGO has already made it clear that there are no funds available. You are looking in various directions, but you cannot find any viable solution. You decide to attend an event where experts in the field of start-up funding are going to speak about the different options that exist for financing a business idea. One of them talks about this new, innovative way of funding called crowdfunding. You go back to your colleagues and you share with them the opportunity of funding your ideas via crowdfunding. But all of them, as well as the chairman of the NGO, cannot understand what you are telling them as they haven’t heard before this new term, this new business tool for funding. So, you decide to prepare a presentation for them to explain exactly what crowdfunding is, how it works and how it can be used by your organisation in order to convince the chairman and your team mates to proceed with designing and implementing winning crowdfunding campaigns that will help your organisation to raise the seed money needed and to have a positive impact in the community. During the process of developing this presentation, you will work by yourself but in certain stages of this journey you have to cooperate with your colleagues in order to ensure that this presentation will be comprehensive, explanatory and persuasive, so as to facilitate the strategic decision to be made by the NGO team, whether to exploit crowdfunding or not.

PROCESS

Step 1: Designing your presentation!

It is very important, before beginning researching on the topic of crowdfunding to design your presentation, so as to develop a comprehensive and exploratory one that will serve your goal; to convince the NGO’s team members to use crowdfunding for raising money in order to implement the ideas they want.

Why is so important to start with designing a presentation before developing the content? You can find the answer at:

https://www2.le.ac.uk/offices/ld/all-resources/presentations/planning-presentation

One good way to put on paper your presentation structure is to use the “Presentation Design Canvas”. You can learn more about this canvas and download it at:

https://presentationdesigncanvas.com/.

You can also get informed about the 7 different ways you can use to structure your presentation at:

Be sure at the end of this step to have answered the following questions:

  • Who is going to present, when, for how long and how?
  • Who is the audience? What problems/issues our audience is facing? What kind of value does our audience want to gain?
  • Which is the purpose of your presentation? What we want to achieve? To inform, to persuade or just to have fun? Why do we implement this presentation? What change we want to see to our audience? What are our goals?
  • What is the main message of your presentation written in one sentence, which contains your unique point of view on the topic?
  • What is the title of the presentation?
  • What are the main topics of the presentation; the main information that is going to be given per slide?

Now it’s time to take a pen and paper and start designing your presentation! It is strongly suggested not to use your computer and either your smart phone! Now you have to live in the “analogue world”!

Step 2: What is Crowdfunding?

Now you have your presentation structure blueprint it’s time to start researching more about crowdfunding. You and your colleagues have to find seed money to start implementing your creative ideas to raise awareness of your community regarding the existing environmental problems and to help them take action so as to decrease their environmental footprint. But first of all, you need to explain to your team mates some new terms you learned while you were watching the presentation regarding funding ideas via Crowdfunding. The first new term you heard was “seed money”. According to Inc.com seed money or seed capital, is the first round of capital for a start-up business. It gets its name from the idea that early stage financing plants the seed that enables a small business to grow. You can learn more about seed money at:

This is the first important term in start-up world. But the second most important term you heard during that event was the term “Crowdfunding”. According to Investopedia crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. Further definitions of crowdfunding can be found at:

Crowdfunding has a long history and you can learn how it was applied before the Internet by reading:

There are several forms of crowdfunding in today’s digital world which are, according to the European Commission: Peer-to-peer lending, Equity crowdfunding and Rewards-based crowdfunding. Check for their definitions at:

https://ec.europa.eu/growth/tools-databases/crowdfunding-guide/types_en

And to put all together watch the video:

Step 3: How does Crowdfunding work?

Now that you know what Crowdfunding is, you need to find out how it works. To put it simple, crowdfunding works by bringing your project or idea to people within and outside your network and by giving them the opportunity to contribute to your fundraising goal. In return these people have some special rewards such as free products, discounts etc. And this procedure is done online by deploying certain platforms developed for this reason. It sounds easy but it’s not! Because you have to develop a crowdfunding campaign that will be compelling, based on true facts regarding your idea, your product or your service and to promote it to the right audience, via the right channels so as to get the attention you want and finally to raise the money you need.

A very good video that summarises how crowdfunding works is the following:

Additionally, visit the following websites and read the articles:

While you are watching this video and reading the articles provided, keep notes so as to be able to summarise what you have learned and to be ready to include it in your presentation! The questions that follow can help you during this procedure:

  • How crowdfunding works? What is the procedure that you need to follow to launch a crowdfunding campaign?
  • How is a successful crowdfunding campaign developed?
  • What are the concrete steps you have to take?

For more in depth research on this topic you can visit:

Step 4: Which are the most popular crowdfunding platforms?

Now that you have understood the basics of crowdfunding, and you know how crowdfunding works and how to create a winning crowdfunding campaign, you need to make some research in order to get informed about the most popular existing crowdfunding platforms. You can visit the following links and find the information you are looking for:

After researching these platforms make a “top 5 list” containing the platforms that you think fits the most to your NGO’s ideas.

In order to check if you made the right choice, find some successful “green” crowding funding campaigns, create a table, put the data you found in and next to each one of these successful green campaigns write down the platform that hosted them.

Some online resources regarding the winning green crowdfunding campaigns can be found at:

You can also visit the most popular platforms and search the successful campaigns they hosted in the field of environment.

Step 5: Share your finding so far with your colleagues!

Choose two members of the NGO’s team and present in brief your findings. Try to get their feedback regarding the research you have made so far in order to check if you are on the right track based on your end goal. This presentation will be informal. You can use your notes and some articles or videos you have already read and watched. Prepare some questions in advance in order to get the feedback that will be helpful in developing your presentation. In order to get prepared for this step check the following websites that can support your preparation for this feedback session:

After collecting their feedback how do you feel? Are you making progress? Is there something that you should change, or do you have to make some more research on certain topics?

If everything is OK, then proceed with the next step!

Step 6: Work with your colleagues to explore the potential of crowdfunding in your field!

Your colleagues are informed about what seed money and crowdfunding is, how it works, which are the most well-known crowdfunding platforms and they got introduced with some of them that could be used to host crowdfunding campaigns in the field of environmental protection.

Work with them in order to explore the possibility to use crowdfunding for finding seed money for your ideas to come true! During this process try to answer the following questions:

  • What are the pros and cons of crowdfunding?
  • What are the risks you may be faced with?
  • What are the most common mistakes that should be avoided?
  • What personal attributes a person needs in order to design and implement crowdfunding project successfully?
  • Which crowdfunding platform do you think fits most to our ideas?

while reading the following articles:

One good way to answer to the above-mentioned questions is to use an ideation method. There are many of them but two are the most commonly used for rapid idea development:

Simple form of Brainstorming: for every question to be answered devote 10 minutes. Use a timer to manage your time effectively! In these 10 minutes each one of the group members should suggest as many spontaneous new ideas as possible as answers to the question posed. You have to decide from the beginning who is going to write down those ideas. Use a whiteboard or a big piece of paper!

Alternatively, you can use Brainwriting: you follow the same procedure but instead of suggesting your spontaneous new ideas loudly each one of the team members will write them down on a piece of paper.

After having all the possible answers to the questions, then decide all together which are the best answers to them and create a list. This list will be used in your final product, your presentation!

Step 7: Create and deliver your presentation!

Thank your colleagues and go back to your desk! Take in front of you the presentation structure you created in step 1 that has an analogue form and start transferring this structure by enriching it with your findings to a digital form. Now it’s time to deal with the design aspects regarding the development of a digital presentation. You have to make a decision about the colours you are going to use, the fonts and the font size. How are going to present your findings? By using bullet points or high-quality royalty free images and graphs? For some very helpful tips and hints in presentation design, please visit:

Don’t forget to manage your time effectively! Keep your presentation short and to the point! Include the findings of your research from steps 2 to 5 in a creative way. Get well prepared so as to show that now you are an “expert” in crowdfunding, and you can answer as many questions as you can regarding this interesting topic! Keep in mind your end goal! To inform the chairman of the NGO and your colleague about this innovative funding opportunity and to persuade them to give it a try!

Of course, it would be great to have the opportunity to deliver this presentation face-to-face but be prepared also to deliver it by-distance, using Skype or an open source communication platform! And here you can find some tips for delivering online presentations successfully and some other platforms except for Skype that you can use:

Of course, you have to make sure beforehand that all those who take part in the conference call have the right software installed and are available at the proposed time!

Good luck!

EVALUATION

KnowledgeSkillsAttitude
• Factual knowledge about funding opportunities for a mainstream business and a start-up• Use resources to overcome challenges and achieve my (or my team’s) goals.• Commit to fulfilling personal needs, wants, interests and goals
• Factual knowledge about the different kinds of funding-crowdfunding, angel investors, prizes, shares etc.• Identify and list public and private services to support my value-creating activity (for example, incubator, social enterprise advisors, start-up angels, chamber of commerce• Awareness of how I can influence people and situations for the better
• Identify public and private sources of funding for my value-creating activity (for example, prizes, crowdfunding, angel investors and shares).• Openness to innovative ways of funding a business
• Persuade others by providing evidence for my arguments and by appealing to their emotions

As a self- assessment exercise for this WebQuest, please answer to the following questions:

  • What were some of the most interesting discoveries I made while working on this project? About the problem? About myself? About others?
  • What were some of my most challenging moments and how I manage to overcome them?
  • What were some of my most powerful learning moments and why?
  • How well did I and my team communicate overall?
  • Were my milestones and goals mostly met, and how much did I deviate from them if any?
  • What would I do differently if I were to approach the same problem again?

And complete the self-assessment quiz that can be found at: https://forms.gle/UG6UAccjN5SrBeRw6

CONCLUSION

You just experienced the whole process of creating a presentation for informing your audience about an innovative business funding tool which is the “Crowdfunding”. During this journey you had to research in depth in order to learn more what crowdfunding is, how it works, what are the pros and cons of using it as a funding method, what it is needed to create a successful crowdfunding campaign. You learned also some best practices on how to structure, design and create an effective presentation so as to present your ideas and the products of your research in a professional way. But you have also got trained in critical and creative thinking and in collaborating and communicating with your teammates.

Congratulations! Now you are an expert in crowdfunding and the next step is to create your own crowdfunding campaign to raise money for your creative idea! And don’t forget! Your ideas should answer to the following question: How can I make this planet a better place to live while protecting the environment?

“The unique value of crowdfunding is not money, it’s community.”

Ethan Mollick

Photo by Tim Marshall on Unsplash

Developing a Successful Project Budget

INTRODUCTION

Welcome to the Game-Changer’s WebQuest Compendium of Entrepreneurship Skills Development Challenges! “Developing a Successful Project Budget” WebQuest addresses the “Resources” competence area of the EntreComp Framework and helps you develop your knowledge and skills in the key competence “Financial & Economic Literacy”.

“Financial & Economic Literacy” are the abilities to understand and apply various responsible skills towards money. This includes managing finances, budgeting and investing. Learning the key factors of “Financial & Economic Literacy” helps make people self-sufficient in order to access financial stability for themselves and the company they work for.

The core responsibility of a project manager is the successful execution of a project, within the estimated budget, time and quality standards. These three factors: budget, time and quality, constitute the backbone of every single project. But, though time and quality might be of equal importance in the life cycle of a project, nothing can move forward without the necessary amount of money and that requires a well-planned and properly estimated budget.

TASKS

You are working in an NGO, that arranges its activities into programs or portfolios and implements them through the projects. You found out a funding opportunity within the framework of European Union’s initiative, for implementing a project entitled “Establishing an e-learning platform for the NGO’s employees’ training in entrepreneurship”.  You are in the process of filling out the application form and of course, you have to develop the project budget. But you are not so familiar with these financial issues. You decide to conduct research on the topic of “budgeting” and to find out the best practices and the steps you have to follow in order to develop a successful project budget. In the end of your research you have to develop the project budget for the project entitled “Establishing an e-learning platform for the NGO’s employees’ training in entrepreneurship” and to present it to your project team for approval.

PROCESS

Step 1: What a Project Budget is?

Financial and economic literacy are worldly skills that do not just help you within the workplace but also with your home life. Budgeting is an important life skill that allows you to organize your money in order to access financial stability.

There is more than one type of budget, e.g., personal budgets, NGO budgets, private sector budgets and so on. In this module, you will learn about project budgets.

Start your personal research by finding out the meaning of the term budget. Click on the following links to find out the definitions:

All budgets are a strategic plan in aspect of reducing and saving money.

The next words you need to define is project budget. Click on the following links to discover the definitions and the importance of them:

Step 2: Why a Project Budget is Important?

Now that you learned what a project budget is, is essential to understand its importance for the successful implementation of a project.

As it is stated in the following article, by developing a project budget it can save energy and protect the project manager from anxiety, uncertainty and negative consequences:

https://www.clarizen.com/why-is-budgeting-such-an-important-part-of-project-management/.

By investing the time to plan an effective cost estimation, from the very beginning of a project, is essential so as you will be going a long way to ensuring project success. 

Take a look also at the following article so as to be convinced of the importance of a project budget:

https://smallbusiness.chron.com/advantages-budget-within-project-26134.html.

Developing a budget is a part of the so called “Project Cost Management” which is a series  of activities for estimating, allocating, and controlling costs within the project. Learn the basics of Project Cost Management by watching the video:

and have always in mind the project cost management allows each project to be specific and unique because that project entails costs and requires specific funding.

Step 3: Typical Project Cost Categories

You have learned what a project budget is and why it is so important for the successful project implementation.

But what you have to include in a budget? What are the typical project cost categories that you should take into consideration?

In order to understand better the typical cost categories of a project budget, read first the following article that reviews the main categories typically found in an average household budget and offer suggestions for what percentage of your income you should devote to each category based on advice from budgeting experts:

https://www.quicken.com/blog/budget-categories

A project budget is like a household budget! The idea behind is the same. Now, you are more ready to dive into the typical cost categories of a project budget. To do so visit the following links:

Step 4: Decide about the Cost Categories of your Project Budget!

In this step, you are going to face the research work that is involved with estimating a project budget. If you are unsure of how to run the project, ask those who have previously run the last couple of project budgets. You do not have to use the exact same techniques they used, but you can use their knowledge as a guide to format your approach to a project budget.

Click on the following links to discover some different techniques:

Research is key to figuring out how much you will need to spend with the amount of money you are requesting from a sponsor.

Step 5: Create the Project Budget!

This step involves being hands-on. Choose a project budget template provided in the following links:

or create your own by using a spreadsheet where you are going to include the cost categories that you and your teammates decided to include in your project budget.

Before starting to fill out your template take a look at the following articles in order to be sure that you have taken into consideration all the important aspects of the project budgeting process:

Next to each cost category try to estimate the amount of money that will be needed to cover all the project activities.

Ask yourself these questions as you continue on developing your project budget:

  • What needs to be done?
  • What tasks take priority?
  • Who will do what?
  • When will it be done?
  • How much time do you need to set up?
  • What times can people access the events?
  • Are all activities available during the fair hours?
  • Is there any money left over?
  • What are your activity, fixed, variable and one time costs?

If you ever forget the definition to a category, refer back to Step 3. If you forget how to conduct estimations, refer back to Step 4.

Step 6: Present the Budget to the Project Team

You are now onto the final step of this WebQuest – the presentation.

Remember to ask yourself if others would be able to understand your budget? It is not enough to present numbers; you also need reasoning behind those numbers. Refer back to the previous steps to make sure you have covered everything. Make sure you back up why the materials you picked are essential in the first place and why the other materials are optional. The explanation will help when you when you present your project budget to the team.

You can choose to present your project budget as a Microsoft Excel document or as a PowerPoint presentation.

When you create your presentation, remember to keep it simple. Overcomplicating your idea will lose your audience.

The following links are tips for presenting:

https://www.skillsyouneed.com/present/presentation-tips.html

EVALUATION

By completing this activity, you will acquire the following knowledge, skills and attitudes:

KnowledgeSkillsAttitude
• Theoretical knowledge about what cost management is• Use resources to overcome challenges and achieve my (or my team’s) goals.• Acknowledge the importance of financial literacy
• Theoretical knowledge about the important effects in financial and economic literacy.• Identify and get together the necessary resources to develop my value-creating activity• Commit to fulfilling personal needs, wants, interests and goals
• Theoretical knowledge about what a project budget is and why it is important• Create a project budget through Microsoft Excel.• Awareness of how I can influence people and situations for the better
• Theoretical knowledge about the cost categories of a project budget• Identify the basic categories that make up a project budget.
• Theoretical knowledge about the methods used for business forecasting• Organize and prioritize tasks for a project budget.
• Factual knowledge about creating an effective idea pitch for investors• Take into account the non-material cost of using resources when taking decisions about my value-creating activities.
• Choose and put in place effective resource- management procedures
• Apply the financial planning and forecasting concepts that I need to turn ideas into action
• Practice pitching in front of potential investors or donors
• Produce narratives and scenarios that motivate, inspire and direct people

As a self- assessment exercise for this WebQuest, please answer to the following questions:

  • What were some of the most interesting discoveries I made while working on this project? About the problem? About myself? About others?
  • What were some of my most challenging moments and how I manage to overcome them?
  • What were some of my most powerful learning moments and why?
  • Were my milestones and goals mostly met, and how much did I deviate from them if any?
  • What would I do differently if I were to approach the same problem again?

And complete the self-assessment quiz that can be found at:

Q1. A project budget is a tool used by project managers to estimate the total cost of a project.

  1. True
  2. False

Q2. Why a project budget is important?

  1. It allows a project manager to manage the project’s cost effectively
  2. It allows the project manager to determine how much the project is likely to cost.
  3. It is what drives project funding
  4. All the above

Q3. Financial Literacy is the ability to use basic economic concepts to make decisions about earning, saving, spending, and sharing money

  1. True
  2. False

Q4. In order to develop a project budget, you need to take into consideration only the cost categories: indirect costs and direct costs.

  1. True
  2. False

Q5. Analogous Estimating uses the weighted average of three estimates — best-case, most likely case and worst case — to gain a greater degree of control over how the value of a task or activity is calculated.

  1. True

False

CONCLUSION

By completing this challenge, you learned the effectiveness of the life lesson of budgeting. The whole process was focused on how to develop a project budget by deciding on the cost categories that are needed to be included and by estimating the amount of money needed per cost category in order a project to be implemented successfully.  Finally, you learned techniques on how to present your idea to your fellow colleagues to get them on board with your project.

Awesome! With the new knowledge and understanding you possess, you are ready to head out into the business world and tackle a new kind of challenge?

“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver”Ayn Rand