Crowdfunder.co.uk is one of the UK’s leading Crowdfunding websites. Crowdfunding is a different way to raise money for good ideas. People are bypassing more traditional funding routes such as bank loans or grants. However, they are turning instead to the people around them and in their community to support their venture. It’s been around for centuries but the internet makes it possible to reach much bigger audiences than before.
Crowdfunding is better than money
For startups, crowdfunding [If successful] not only provides funds to start or grow a business but it provides the key element of market validation; In other words if a large enough group of people believes in your idea or project sufficiently to open their wallet, your project or business, has also reached a certain degree of market validation.
Over the past year only, Crowdfunder has helped projects raise more than £120m from generous supporters across the globe. They waived in excess of £1.3m in fees, including transaction charges and gift aid processing fees for projects affected by Covid-19. Above all, this ensured maximum impact of funding for those who need it most.
Another key benefit of crowdfunding is that it provides exposure to your product or service before it is even available on the market If the campaign is not successful it may suggest the product or service isn’t yet ready for the market and may need to be refined.
Interview with Mr Joel Matthews, Head of Finance at Crowdfunder.co.uk
You have a lead role in one of the UK’s leading crowdfunding platforms, what do you find most exciting with working for Crowdfunder?
The greatest thing about working for a company like Crowdfunder is that our work has a positive impact on our communities and is not just big business. It is rare that you can work for an organization and know every day that what you are doing is making a difference in the world.
We also get to see and work with some amazing projects and movements that you may not get exposure to in a more ‘usual’ work environment.
Is Crowdfunding either equity based or reward based ? What’s your personal opinion on which of these two types is the most suitable depending on the types of business ?
Could a company potentially use both types at different stages ?
Equity Crowdfunding is a method of financing which allows the public to buy a stake established startup that may not be large enough to trade on stock exchanges. Previously only high net worth’s, VC’s and business angels could invest in startups but Equity Crowdfunding allows the general public to get involved.
Rewards Crowdfunding, which we focus on at Crowdfunder, allows any idea for a business or organization to offer rewards in return for donations on their project. For example, if you had a great idea for a new jetpack, you can accept donations in return for the finished product down the line.
Through our ‘Pay it forward’ campaign, this has allowed businesses closed due to Covid, to reach out to their communities and ask them to donate in return for future services. This works particularly well for local restaurants and independent stores.
If you haven’t started a business yet but have a passion project or idea, could you still ask for funding?
Yes! The only thing needed to create a project on Crowdfunder is an idea. So, if people believe in the idea as much as you do, they will get behind you.
Could any type of start-up business start crowdfunding?
Any great idea can become a successful crowdfunding campaign. We have seen projects ranging from gin distilleries to zero waste shops which started out as an idea on Crowdfunder, that went on to have huge success.
What’s the largest amount someone has pledged, looking at last year only?
Actor James McAvoy donated £275,000 to a project raising money to purchase PPE (Personal Protective Equipment) for front line NHS staff at the start of the pandemic and has taken the record for largest pledge from an individual in 2020.
Currently it is free for charities and companies to use your portal for Covid-19 related fundraising, will it stay free in 2021?
Yes! We do not charge any platform fee for charities or those affected by Covid-19. In 2020 we made the decision to reduce our platform fee to 0% for these charities & organizations and we now only apply a small transaction charge to cover our payment processing fees.
If you were to suggest the secret recipe for a successful crowdfunding campaign in 5 concise bullet points for a to-do list for an aspiring entrepreneur what would they be?
- Do your research.
- Make a plan.
- Know your crowd.
- Create powerful content.
- Offer rewards.
You’d agree people learn a lot from failures. What would you say are the lessons to be learned from the unsuccessful campaigns?
It all depends on the idea and how realistic the target set is. Crowdfunding is a great way to validate an idea for a business as it allows you to find out if there really is a demand for the product or service offered whilst also building a strong customer base to launch your venture. If there isn’t backing for your project then you can go back to the drawing board to improve the idea and make changes from any feedback you have had during the campaign, before incurring any of the costs.
The 5 Don’ts of Crowdfunding:
- Set an unrealistic target.
- Set unrealistic expectations.
- Start without a plan.
- Stop after after launching.
- Sit on your hands, get out there and tell the world!
Thank you Mr. Matthews for your time! Our final question is: among the people you know, whose interview would you want to read next and why?
Deborah Edwards, Director of Harland Accountants and FD at Crowdfunder would be a great read.
She has been a hugely valued member of the team and a fantastic mentor to me personally.
Deborah and the team at Harland’s have unsurpassed knowledge in finance. They can help take a business to the next level.
Throughout the pandemic, communities have shown incredible support for people in need.
Dowhatyoucan.net was launched in partnership with the National Emergencies Trust which went on to raise £68m via the Crowdfunder platform. Since then it been distributed via the community foundations and in addition to that, thousands of communities across the UK.
Crowdfunder success stories in 2020 included:
- £7M of direct fundraising for projects affected by COVID-19
- £2.5M for PPE and other NHS support projects.
- £1M for food banks.
- £10M for businesses directly affected by the crisis.
- £2.25M for start-up businesses.
- £500K for festivals.
- £4.4M for sports clubs across the UK
- £1.6M for football clubs alone.
- £1.4M for theatres.
- £3.4M for music venues across the UK.
- £500Kfor Stagehand, the back room crew charity, to support the live music industry.
- £750K for people to buy assets in their community.
- £500K to support Black Lives Matter campaigns.
Mr. Matthews said, and we quote: “Looking forward to this year, we face some familiar challenges with the Covid-19 pandemic and the new lock down will mean many more businesses, individuals, communities and charities will face financial difficulties. Crowdfunder.co.uk can help, and with a great idea or cause that people believe in, any project can be a success!”
His words sends out a glimpse of hope to a lot of struggling businesses and charities. As well to all those who has a dream or idea that wish to pursue it.
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