Public-financing model becomes an important means of early financing for small companies and teams

The pattern of public financing has been very mature abroad, and it has become an important means for small companies and teams to raise funds early. In particular, with the rise of the hardware innovation products, but also let Kickstarter such a public platform fire up.

This model 2 years ago has been introduced into the country, the emergence of a call time to represent the domestic public to raise the players, the public will become the domestic development of entrepreneurship projects a powerful push? Through with the domestic public to raise platform, the project sponsors, the investor's communication found that the public chip model in the domestic although the scale of growth, but the development is not so smooth, there are many places acclimatized, such as:

1, domestic users are still low acceptance of the public

2, in mentality, domestic users are more inclined to buy products rather than friendship to support you

3, the amount of funding, the gap is still very large at home and abroad

4, the current domestic creation atmosphere is not strong enough

What the hell is a public chip?

We start with what is the public, if you have a good idea, you have the technology, such as the development of a small and practical wallet protection, but lack of funds, then you can display your ideas on the network and have been prepared. Tell everyone how much money you need to complete the idea and let netizens give you funding.

You can set 5, 10, 100, or a different amount of funding, provided you have to set a reward for different levels of support, either as a product badge or a T-shirt, or as an engineering machine in the development phase or a final finished product. After a certain period of time to achieve the target funding, you successfully completed the project, and within the agreed time period to give the user set the feedback.

This network platform is now popular "public chip", the word "crowdfunding" from the English word, that is, the public financing, refers to the form of group buying + pre-order, to raise project funds to the user model. The use of the Internet and SNS communication features, so that small enterprises, artists or individuals to the public to show their creativity, to enlist the attention and support, and then obtain the necessary financial assistance.

My example above is the basic process of a public-sponsored project, and the key to the rules of the game is:

1. The idea has reached a level that can be displayed.

2, to set a good amount of funding for different types of user return.

3. Only if the amount of funding is reached within the proposed time period (usually 30 days) will be successful if the failure has been raised to return.

The public has been a blowout in foreign countries

In Europe and the United States in the development of early, 2009 in the U.S. set up Kickstarter is the most famous public-funded sites. After the outbreak of various overseas, according to Forbes reported that the public financing website now has more than 700, to the second quarter of 2013 will increase to 1500, a blowout trend.

In the case of Kickstarter, a total of 345 million dollars had been raised by the end of 2012. The main revenue model of foreign-funded websites is collecting commission, which is generally the 5%~10% of financing amount. The more successful case on the Kickstarter is the smart watch Pebble, which is not complicated, but financing more than 30 million dollars on the platform, and now the product has sold more than 300,000 units, is a very successful hardware case.

The domestic public financing mode starts 2 years late

The domestic public to launch a lot later, 2011 set up the roll-call time is now the best in China to do the public platform. According to/ceo Zhang You, co-founder of the roll-call time, the roll-call originated from their reference to foreign documentary patterns. "July 2011 website On-line, now just full two years." "he said.

On the scale, Zhang You said, "Two years down a total of more than 7,000 projects received applications, more than 900 projects through our audit on the line, the proportion of successful fund-raising in 50%." "In order to attract more project participation, user support, the roll call has been canceled last month to charge 10% Commission rules, now at the point of no time to raise funds is completely free."

Domestic and foreign do a lot of different environment

There are many differences in the development of domestic and foreign public financing, starting time is only one aspect late. The type of project is very different, the direction of the project is very wide, has involved in film and television, design, publishing, games, music, science and technology hardware products and other fields.

According to Zhang You, "the three most successful foreign-funded projects are: games, film and television, design products, design products including intelligent products." At present, the first major category of film and television, the second category of publication, the third category of music, the fourth category of products. "So the innovative hardware in the domestic platform is still very small, Zhang You They also began to pay attention to this area in the past six months, the domestic only just started."

In addition, from the roll-call time, as well as investors, the project sponsors in many ways, found that there are several obvious differences:

1, foreign public raising atmosphere is very strong, users and initiator acceptance is very high, but in the domestic user acceptance is limited, but also in a user education period.

2, the project's supporters called backer, domestic and foreign backer the starting point is very different, foreign to the public understanding support more, and in the domestic, users to the public to raise the product expectations more like the purchase of this product, so the requirements are higher.

3, the amount of money difference, a project in foreign countries can finance to tens of millions of dollars, in the domestic general initiator only set in between 5000 to 100,000 yuan, a single user's financing amount is also very big difference.

Some difficulties in the development of the public in China

The above mentioned these differences are also the domestic platform for the slow development of the problem, user awareness is not high. In addition, how to profit is also a big problem.

The roll-call has been running for 2 years, and now it is time to cancel the financing commission income, and how to continue to develop is a challenge. Naming Time CEO Zhang You said that the call time has been the angel investment, is now in a round of continuous investment phase.

In the country still have to disagree with the place, is that the public will be "illegal fund-raising"? Zhang You think this red line they will not encounter, "participate in the user's return part is the key, we pinch also pinch in return." He said that, at the same time, he believed that there would be no policy risk as long as there was real return and no share ownership. Simply put, the fundraising process is more like buying or purchasing.

The first people to eat crabs in China

By chatting with the promoters of several hardware projects, I saw how they actually felt on the domestic platform:

1. Some projects will be launched at the same time in a number of national platforms, for example, the recent popular to be engraved 2 centuries ago the classic optical lens Pip project, the domestic contact Cheixin, they are also in the United States Kickstarter, the mainland, Taiwan, Japan's platform for the launch, So a feature of the public is that there is no national boundaries.

2, at home and abroad, the sponsors of the project generally believe that a gap at home and abroad is that the United States to create a culture more prevalent, the participants are more than the starting point to support your project completed, and domestic users to participate in an important goal is to be able to buy you this product earlier. Smartwallit's Wu Changfeng, which makes smart money clips, has also launched a project on Kickstarter, and has done it earlier.

3, the sponsors of domestic "fund-raising" is relatively low expectations, such as the Kickstarter lens, in the fund-raising target is 1 million U.S. dollars, in the domestic is 100,000 yuan, in China, the project sponsors are also looking for a feeling.

4, in addition to fund-raising, many projects on the call time, publicity is more significant. Home Business did a WiFi intelligent remote control of the Liu Zhongru said, in the roll call time, not only can promote the product, and can get a lot of user feedback, and give feedback is really concerned about this product, at the same time through this platform, there are many sales channels to come to the door, in fact, their fund-raising effect is also good, The goal was 10000 yuan, and the final fundraising was over 70,000.

Investors: The public has not done it at home

For the public chip model and hardware innovation projects, investors also have different views, Jingwei VC VP Wang Huadong that the domestic public-chip model has not done very well. The main is that there is no good "point" on the whole, the lack of successful major projects. The reason, he thought there are two points, one is not to do localization adjustment, the mechanism to be perfected, now can see the main product pre-sale.

Second, there is no threshold for hardware in the country, there is no threshold there will be no core competitiveness, especially the core technology, so make it bigger and harder.

Peer: The flow cost is too high

After the roll-call time, the domestic also launched a group of people to do the following, such as dream nets, Amoy dream nets, good dream nets, ignition nets, all the Italian network, regardless of the size of the development and team and roll-call time gap, there are teams to do their own products, try a group of platform, and adjust the direction back to do products, such as billion find nets.

Listening to the founder of the network to build Rong said, in the domestic do a lot of him feel the deepest is that these two points, 1, the Chinese users like to pay for the entity products, domestic payment system is not mature, abroad is generally used by the credit card, only after the success of the project will be deducted fees, the domestic need to pay Alipay direct payment success. 2, the user's patience and purchase habits are spoiled by the electric dealer, unlike foreign users more to support and public welfare as the starting point.

At the same time, he also believes that the domestic flow cost is very high, relying on traffic to support the project is disproportionate, only a conversion rate, conversion rate is too low. If compared with the electricity quotient, the electricity quotient is 30% gross profit, the public raised only 10% gross profit.

There is also a risk problem, if the project failure is no compensation, is exempt, and some products have not shipped for 2 years. But foreign moral restraint will be stronger.

Profit is also a problem, foreign profit way in the form of advertisers, Kickstarter by 10% revenue, a year 2~3 tens of millions of dollars, operating costs may be accounted for half.

He believes that the start of the public is a number of idealistic spirit, to pay a great price, gradually will face the reality of the ceiling. He likened it to building a giant tower in the desert.

How does the public raise in the domestic how to break the bureau?

Heard all aspects of the voice, in general, the domestic public is also in the development of brewing period, see is fiery, but behind also face the user acceptance, revenue and many other development bottlenecks, after this bottleneck may be further outbreak.

To enable the public to develop successfully at home, there are at least a number of barriers to cross:

1, the user's awareness of the promotion and change of mindset

2, the mechanism of localization, payment methods, risks and compensation methods should be different

3, different from the simple charging commission of the profit model

4, with the core technical highlights of the project to promote

Since this model has been successful in foreign development, there must be the truth of its existence, across the threshold, the public-chip model in China will have a good future.