With crowdfunding, members of the public can pool their resources to help you hit your fundraising target and in some cases, can support your idea by donating small amounts. They do not expect any return. Other crowdfunding sites require a return-on-investment, via shares or loan repayments and may be regulated by the Financial Conduct Authority.
In Wales, there have been some success stories recently where crowdfunding has helped businesses to flourish. As an example, take a look at Veega, a hi-tech firm, which has raised over £370k worth of funds through Seedrs. Veega’s idea was to develop a multi-channel order and inventory management system, designed for online retailers to sync stock between their retail store, website, eBay Shop and Amazon Marketplace in real time, and also let them print courier shipping labels automatically. Central stock management reduced order issues and helped to increase customer sales and boost positive feedback!
Seedrs, www.seedrs.com, is an online platform for discovering and investing in start-ups. It allows people to invest as much or as little as they like in the start-ups they choose, through an online process. So businesses can raise seed capital seamlessly from friends, family, members of their communities and independent investors. A timely point to note is that Seedrs has just attracted the interest in Andy Murray, who is joining the Advisory Board and is keen to build up his portfolio of investments, especially in sports and health businesses!
If you want to find out more, there are free workshops available to attend and to help you create a winning strategy to set up your crowdfunding project. You have to win the hearts and minds of your potential investors, so as a minimum, you’ll need a sound pitch and a great video introduction to sell your idea and explain the benefits.
There are crowdfunding sites sprouting up everywhere, but here are a few you may want to explore in more detail:
Indiegogo: www.ingiegogo.com, is big and attracts high traffic. It supports all sorts of projects, including personal projects and charities. Make sure your pitch can stand out amongst the rest!
Kickstarter: www.kickstarter.com is popular for start-up businesses.
Fundable: www.fundable.com, supports companies developing a variety of products and services, e.g. innovative solar panels.
Crowdfunder: www.crowdfunder.co.uk, supports Arts-based projects/companies.
Experiment: www.experiment.com, supports scientific, educational and technological research ideas and projects.
Finally, for more information take on the Business Wales site to obtain some more ideas.
Next week we’ll take a deeper delve into venture capital and angel investment as a means of financing your business!