What happens in Vegas stays in Vegas—except if it’s the Global Crowdfunding Convention. This big tent crowdfunding conference brings together experts and novices from around the world to network and learn about all forms of crowdfunding. The maestro behind the event is crowdfunding authority and entrepreneur Ruth Hedges. She is the founder of CrowdfundingCRM.com, a marketing automation and social media platform to help run successful crowdfunding campaigns. She also teaches securities-based crowdfunding at the University of Nevada Las Vegas and the new Crowdfunding Education Center in Las Vegas. Ruth is a true pioneer: she held her first conference in 2012, after the JOBS Act was signed into law. We caught up with her recently to talk about this year’s GCC, which takes place October 23rd and 24th, 2017 at Planet Hollywood Resort & Casino.
This will be the 6th annual Global Crowdfunding Convention. How has the crowdfunding field changed since the first one in 2012?
When we had the first convention, the total crowdfunding market worldwide was $1.7 billion (including rewards and equity crowdfunding). Last year it was more than $60 billion globally. The U.S. was among the first to legalize equity crowdfunding. It’s now in more than 50 countries and 100 currencies. It’s a whole global ecosystem. We’re very excited we’ve played a role in that—we’ve had attendees from 22 countries at our conference.
There’s a big focus on diversity this year. How, in your view, does crowdfunding help level the playing field for entrepreneurs of all genders and backgrounds?
There is obviously a struggle among entrepreneurs for access to capital, but it’s particularly difficult for women, minorities and LGBT business owners.
One effort to address this has been supplier diversity initiatives, which represent around $100 billion in spending by large corporations and organizations. These are contracts that Corporate America sets aside for women and minority-owned businesses. The problem is, some of these contracts are so big that the businesses don’t have the employees or equipment or inventory to be able to fulfill them. If the business is too small, and they can’t fulfill the contract, it defeats the whole purpose. Let’s get some of these companies crowdfunding, and then they can take advantage of these opportunities.
Broadly speaking, crowdfunding has the ability to bring a new pool of capital into minority, woman, veteran, and LGBT-owned businesses and startups.
GCC encompasses rewards-based crowdfunding as well as the different JOBS Act provisions involving investments. What do they all have in common?
About 75% of crowdfunding is generic to all forms, and that’s marketing. The difference is that in rewards-based crowdfunding you get a reward. You also have the shipping and fulfillment figure out. With equity crowdfunding you have to comply with securities laws. But the crowdfunding part is all the same. You still have to promote it and get it out there. You still have a video. Marketing is everything.
What are the biggest challenges facing the industry?
Awareness and education. Not enough people know about it, and even the people that have heard of it often don’t really know what it is!
What are the biggest mistakes you see in crowdfunding campaigns?
The biggest mistake that people make is they start their campaign off without lining up funders first. There’s a ‘build it and they will come’ mentality. Strangers are not going to back a campaign that is at zero. The first 25% or 30% needs to be prefunded, and those people need to share it. There’s a whole system to this. It’s tribalesque. The successful campaigns have really thought it out. They get on the phone and talk to people and get them to buy in and help. You can also increase your chance of a successful funding by 70% with a four or more person team.
What are some highlights of this year’s GCC for you?
I’m excited about Microsoft and Forbes Books being sponsors this year. Our partnership with Fernando Hernandez Director of Supplier Diversity at Microsoft will help expand crowdfunding education to more women, minorities and veterans. We have an NBA star, Maurice Evans, who is looking to raise up to $5 million through Regulation A+ for his new sports & entertainment platform for fan engagement. We’ll also have a live pitch event with more than 20 startups.
Who should attend and why?
Everybody, really. Now that we have equity crowdfunding, everybody is an angel investor. You can go onto any number of funding portals and look at a business plan, just like somebody did when Facebook or Microsoft or Instagram were early stage companies. And communities can invest in the things that they need—whether that’s a senior living facility or a daycare center. That’s a game changer.
Interested in attending GCC? Locavesting readers use discount code GCC here for 20% off. See you there!