Crowdfunding has gone mainstream, but still has plenty of room to grow. Tech Trends takes a look at what the future holds.
Most of us have backed at least one crowdfunding campaign at some point. We featured many success stories on the site and personally even put our money where our mouth is. I mean, who could have resisted getting their hands on the world’s creepiest limited edition troll doll, shaped like Donald Trump? Not me, nor the other 10,000 or so backers that Kickstarter attracted…
As a producer, my own upcoming release with Carrion Films — Borley Rectory — was successfully funded on Indiegogo, and I don’t think we would have been able to complete it — or to build the fantastic community buzz around the film — without crowfunding. So it’s safe to say I’m a big fan of this medium that has opened up an entire new field of possibilities for small businesses, entrepreneurs, and their wonderful crazy ideas.
So last month we gladly accepted an invitation from Invest in Cornwall (the regional council’s economic development initiative) to visit the Newquay Headquarters of Crowdfunder.co.uk, based in an old surf shop overlooking the stunning Great Western Beach. The company was holding their annual Summer Experience and celebrating the milestone of raising more than £40 million for projects around the UK.
The party was not only attended by leaders from global businesses but it also welcomed a particularly special guest, the world’s first flatpack vehicle, the OX, as it finished its tour through Cornwall, stopping at a few of the region’s iconic landmarks along the way — including the Eden Project and Watergate Bay — before launching its own fundraising campaign on the Crowdfunder platform.
By summer 2017 Crowdfunder.co.uk had supported over 90k projects with more than 200 new ones starting everyday and with over £40Million raised to advance those projects. The company now aims to secure over a million users by 2018 and looks set to take on the big boys of crowdfunding such as Kickstarter and Indiegogo. I chatted to Rob Love, Co-Founder & Chairman of Crowdfunder to hear his thoughts on business in Cornwall and why crowdfunding has become so popular and successful in recent years.
“It’s great to have so many people from around the UK joining us for our Summer Experience event in our headquarters in Newquay. This is what it’s all about — celebrating the success of companies we have been able to help. Cornwall is the ideal location to host this celebration as it’s home to a thriving forward-thinking business community and we look forward to celebrating that for many years to come.” Rob explained.
A key member of the groundbreaking team behind TV sensations Big Brother and River Cottage, Rob is well qualified to talk about disruptive media and technology and sees crowdfunding as a powerful force for good in a society that has lost faith in the ability of big government and financial institutions to support us and help launch new businesses.
“When I saw the success of Kickstarter I thought, we can do better, let’s do a better UK version with more of a social purpose. Crowdfunding is a return to small things, a behavioural change in society. The concept is fundamental, let’s all do it together, sod the banks, if the crowd think it is a good idea, that’s what is driving it.”
I then asked him how advances in technology have given rise to crowdfunding, and what additional benefits it can offer to small businesses that would struggle to secure funding through traditional institutions.
“We had a tech explosion and we got social media where you can hit Facebook, Twitter and all of them, crowdfunding combines marketing, pre-selling and community building, if it’s a customer facing idea why wouldn’t the crowd fund it? It’s proof of concept, it’s crowd validation and crowdfunding, and it’s very viral. People back people, so you need to get your passion across, tech is an enabler, but in the end it’s about real people and real passions — the tech should be almost invisible.”
Despite the disruptive nature of crowdfunding, it is now interesting to see how forward-thinking mainstream companies are also embracing it. Crowdfunder has brought on board partners including Santander, M&S Energy and Virgin Media Business, who see the potential in crowdfunding to support and grow small business in the UK. I spoke to Julian Borra, Founder of The Thin Air Factory, who works with Virgin Media Business on their entrepreneurial VOOM initiative which combines crowdfunding with entrepreneurship.
“Crowdfunding is a new model of pitching for funding to faceless banks. Instead of blind investors, with a crowdfunding platform everyone is emotionally predisposed to make good things happen and they have the business’ back, they are emotionally invested before they become financially invested.” Explained Julian. “Virgin Media Business wants to inspire and champion entrepreneurship in everyone, everywhere through VOOM. It’s volatile out there, we’re in a time of uncertainty and the only thing we can be certain of is small business sparks start-ups, scale-ups, creates wealth, creates jobs and improves lives.
“The benefits go beyond funding. What you’re doing is creating an audience, a market, a loyal, engaged support base and advocates, and you’re doing your marketing and strengthening the whole proposition.” Adds Rob.
“We’ve raised a lot of money, grown our customer base, boosted awareness and audience engagement. It’s been a massive win, and we are definitely going to crowdfund again. We’ve opened up more opportunities through #VOOM than we’d ever imagined.”
Crowdfunder success story What a Melon won the VOOM 2016 award and Founder Olly Bolton enthused about embracing crowdfunding to launch his business:
“Crowdfunding initially works better for people who evangelise their business, who are more likely to succeed. VOOM used this idea and challenged contestants to get out there and What a Melon did just that. Olly was great, he was out there rain or shine talking about his business,” Julian expanded.
Crowdfunder is part of an energetic, flourishing tech sector in Cornwall which is filled with entrepreneurial drive and spirit. Cornwall has had twice as many successful crowdfunding businesses than the UK average (40% vs 23%) and the region plays a key part in those local business success stories. Nicola Lloyd, Head of Inward Investment for Invest in Cornwall, said:
“This is a really exciting time for Cornwall, and ambitious, thriving businesses are transforming the way in which the region is viewed. This event celebrated all the people making this happen, in a place that enables businesses to grow with its fantastic connectivity, attracting world class talent who are looking to match an exciting and ambitious career with an incredible place to live.”
The Crowdfunder party was teeming with successful local businesses and talking to Kim Conchie, Chief Executive of Cornwall Chamber of Commerce, the enthusiasm for the future of the region was palpable.
“The 21st Century is Cornwall’s time to shine. The Duchy now has excellent broadband and physical infrastructure, a really innovative and creative culture, a skilled and progressive workforce and the best work/life balance anywhere in Europe. The ability to combine achievement and enjoyment in Cornwall makes it simply the best place to be in business.”