Mayor of London has £1m for Community Projects Using Crowdfunding: Sep 3 Deadline

Mayor of London Has £1m For Community Projects Using Crowdfunding

The Mayor of London recently announced an allocation of £1 million available to a range of grassroots community projects. Operating in conjunction with UK crowdfunding platform Spacehive and the Greater London Authority, community project leaders can apply for a maximum contribution of up to £50,000 for new not-for-profit projects that serve the wider community. It’s a competitive process, and I can help applicants to succeed. The deadline for applications is September 3.

The Mayor and GLA’s main purposes of the initiative appear to be to:

  • Crowdsource ideas at a grassroots community level that add to or improve local facilities, maybe through new uses of disused buildings and locations, to inspire City Hall regeneration policy-making.
  • Show Londoners that their City Hall and elected representatives are listening and responsive in a demonstration of growing transparency and accountability.

The re-purposing of abandoned locations and unused buildings, particularly high street retail units, is a matter of growing national concern. Online shopping, road congestion, scarcity or cost of parking spaces and a recent hike in business rates have all reduced footfall and raised costs at traditional retail outlets.

The #CrowdfundLDN project will crowdsource many ideas that could influence local authority policies on how to respond to the hollowing out of previously vibrant areas within communities, and also empower groups of volunteer citizens to work together to deliver their solutions at a lower project cost than full funding from any local authority’s budget.

In 2017 the initiative also attracted a number of corporate donors who wanted association with the initiative. Backers included renewal energy company Bulb, creative co-working space Second Home, Ladbrokes and B&Q alongside Esmee Fairbairn Foundation, Growing a Greener Britain and Veolia.

Here’s the 2018 timeline.

  1.  Mayor of London Has £1m For Community Projects Using CrowdfundingWorkshops are currently taking place throughout London to raise awareness and participation levels, and to brief interested parties on the scheme details.
  2.  During July and August project leaders will start to build their crowdfunding pitch on the Spacehive platform, identifying necessary skill sets and assembling their team(s) to finalise the pitch, raise the money  and then deliver the end project. Completed crowdfunding pitches, including plans on how the project will be delivered and then maintained as a going concern, must be submitted to Spacehive by September 3.
  3. Later in September the projects that meet a required standard of community benefit, validation of local community support, short-term achievability and longer-term viability will go live on Spacehive and start to generate funding.
  4. 30 to 40-or-so projects selected to receive a contribution from the Mayor of London’s £1m budget will be announced in October at an event staged in London’s County Hall, headquarters of the GLA and Mayor of London (as in main image in 2017).
  5. Each project will then continue its crowdfunding efforts during November and December to reach their target. The crowdfunding will be on an “All or Nothing basis,” meaning if a project fails to reach the outstanding balance of its overall target the Mayor will keep his money and the project will not go ahead.

Being selected is naturally very positive news to tell potential backers through PR and social media. Projects that fail to receive a Mayor’s contribution can still choose to continue their efforts to raise funds, though of course they will have a tougher job to reach their target.

Benefits for the funding applicants are numerous, and include: 

  1. At a community level, participation in the scheme draws together people with a shared focus on involvement in a project for ulterior motives. Firm friendships and alliances between local businesses have been forged in the previous two years of the scheme.
  2. At a personal level, a number of individuals may develop new skills through the experience and interaction of being part of a team, and gain personal confidence through empowerment. All and any of these factors could boost their employment prospects and future personal earning potential.
  3. All successful projects will improve the number and range of London’s community facilities available to the city’s population.

Previous successful projects include building a sustainable food yard, kitchen and event space at Bankside near the Tate Modern to act as a hub for the promotion of sustainable food activity. The project provides education, outreach and advocacy for innovation in sustainable food practices, and incubator space for startups. Affordable access to a professional kitchen as a community resource enables hopeful commercial food and drink suppliers and would-be chefs and restaurant owners to experiment, gain experience and refine skills.

One project completed the external refurbishment of an iconic and much loved local art deco cinema in Hackney. The project also created a second screen allowing for more local events and the sustainable operation of the enterprise as a non-profit community facility.

Mayor of London Has £1m For Community Projects Using Crowdfundingsouth London disused railway space will enjoy a new lease of life as a 900m pedestrian walkway and natural garden area in what was previously a rail yard used for coal wagons. It is a facility comparable to the inspiring and better known elevated walkway examples in New York and Paris. An initial crowdfunding project in 2015 on Spacehive raised money for a feasibility study, now published as a 180-page document. In addition to a contribution from the Mayor of London, Southwark Council also donated £10,000.

Previously abandoned garden allotments in Tolworth, Kingston Upon Thames, were re-purposed as a suburban farming project to teach food-growing skills and create a productive, sustainable source of locally produced food. The designers of the growing space went on to win an award at the prestigious Royal Horticultural Show at Hampton Court with an edible garden.

Details of all 25 projects backed in this initiative by the Mayor of London in 2017, which between them received a total contribution of £400,000, are here.

Mayor of London Has £1m For Community Projects Using CrowdfundingSpacehive has made a lot of useful information and planning guides available, and also gives details on additional sources of funding in some boroughs. Though if you’d like extra support and insight about using crowdfunding to make your idea for a local community project become a reality then please contact me via [email protected] There’s no charge for the first meeting or conversation on Skype or the phone, and let’s take it from there. You can also follow me on Twitter, @Cliveref.

Swedish Crowdfunding

Swedish Crowdfunding

Alongside my role as an independent crowdfunding adviser I also source and create original content for a global organisation that covers trends and developments in the crowd and sharing economy, Crowdsourcing Week. The various forms of crowdfunding make up some of its 14-part crowd economy landscape. As part of the build-up to a March 2018 conference in Swedish Lapland I took a look at the current state of crowdfunding in Sweden.

Crowdfunding in Sweden

Crowdfunding in Sweden continues to grow and make headlines, from startups using donations-for-rewards crowdfunding as a sales channel for innovative products to quickly achieve high turnover, to the electric vehicle manufacturer Uniti raising €1.2m through its own equity crowdfunding just last month. It also took pre-order sales deposits on 915 units (main image).

The Swedish government wants to generally encourage crowdfunding as a credible way for small and medium size businesses to raise money and conduct business, and is scheduled to publish a report in December 2018 to propose new legislation which will hopefully create a more secure and better defined crowdfunding market. Source: ECN Review of Crowdfunding Regulation 2017.

There is no central professional body for the Swedish crowdfunding platforms and the precise number of them is open to interpretation under the existing vague rules as to what exactly is or is not a crowdfunding platform. There are also international platforms that operate in Sweden, including Kickstarter and Indiegogo in the rewards-for-donations sector and the Finnish platform Invesdor in the debt and equity sectors. General estimates reckon there are 20 to 25 players in the market. Here are the key ones.

Rewards-for-donations

As in many countries, entrepreneurs with an eye on international markets gravitate towards Indiegogo and Kickstarter, with domestic platform providers reaching a primarily internal audience.

  • A recent Swedish tech success at an international level was the Trippy wireless docking speaker for smartphones that operates through electromagnetic induction. 165 backers supported the project, raising €15,390.
    Swedish crowdfunding
  • In numerical terms a far more popular product was a range of cutaway, odour-free socks for men that aren’t visible outside shoes. William & Sterling raised over €153,000 from 4,418 backers in August 2017.
  • CrowdCulture, which launched in 2010, combines crowdfunding with citizen engagement. It has around 5,000 registered supporters who donate to cultural projects around the country and claim their rewards. Each donation is match-funded by regional or local funding sources operating within corresponding parts of the country. “This civic involvement in allocation of public funding has so far seen 152 projects funded, a success rate of 45% with a total allocation of over €800,000 (SEK8m), “ said Gustav Edman.

Equity and debt crowdfunding (p2p lending)

These two categories are combined as there are platforms that provide both services.

  • The biggest Swedish operator is FundedByMe which launched in 2011. They have a network of over 100,000 registered investors who have so far invested over €46.3m in equity and loans. FundedByMe is considering an IPO in 2018 (Initial Public Offering) to be listed on the Swedish stock exchange, and are running their own equity crowdfunding campaign through to mid-December 2017. If the IPO goes ahead there will be an early exit point for shareholders.
    In August FundedByMe joined forces with Finnish investment company Privanet. Their first joint venture raised €1.2m for the Finnish media-platform builder BCaster.
  • In a reverse situation, the Finnish crowdfunding platform Invesdor, which already operated across other Nordic countries and in the UK, opened its first Swedish office in Stockholm in September.
  • Toborrow is a p2p lending platform based in Stockholm and since its launch in 2011 it has provided entrepreneurs with over €6m. Borrowers have to be already trading with a turnover of over SEK1m (around €100,000) and secure the loans with personal guarantees. It isn’t an option for anyone who requires seed or early stage funding.
  • Tessin is a property crowdfunding platform. It gives people opportunities to invest in a number of properties to spread any risks alongside other investors.
  • In June 2017 Trine, a platform based in Gothenburg, raised €6m to pursue its aim of tackling energy poverty through closing the gap between private capital in developed countries and local solar partners in emerging markets. A subsequent project in Kenya then raised over €145,000 (17 million Kenyan Shillings) to deploy solar energy systems for 6,000 townspeople.

Swedish CrowdfundingWhat does the future look like? In addition to a likely new regulatory framework for crowdfunding in Sweden, right now everyone’s talking about ICOs being “the new crowdfunding.” Funds raised through ICOs now exceed early stage venture capital (VC) investments.

In Sweden, Uniti CEO Lewis Horne has set out plans to launch the first green ICO, Uniti Green Tokens (UGTs). The company will use the upfront income to accelerate its work with the open source community. Early investors will gain access to data generated by the first vehicles on the road in 2019. Further options on how to redeem UGTs could potentially include access to mobility services and car charging options – watch this space!

 

Crowdfunding sessions at a major European crowdsourcing conference

Spread throughout the four full days of speaker sessions and panel discussions at the Crowdsourcing Week Europe 2016 conference in Brussels November 21-25 there were a number of sessions dedicated to crowdfunding. As an independent crowdfunding adviser they were naturally of great interest to me, and here is a summary of them I’d like to share.

fredic-barkenhammarFredrik Barkenhammar of House of One told us on the first day of conference about his crowdfunding project to raise money for something truly unique – building a mosque, a church and a synagogue under one roof in central Berlin. This will be a multi-denominational house of prayer and interdisciplinary learning, bringing together people of different faiths to share experiences and get to know each other through dialogue. Even people with no religious focus are welcome.

He is running open-ended crowdfunding asking for a €10 contribution for each brick – and the project will cost €43.5m. That’s a lot of bricks! His project is a stand alone, it isn’t hosted on a crowdfunding platform, there is no cut-off date, and the project keeps all donations. In these respects I guess it’s more like JustGiving than what we usually categorise as crowdfunding, though in simple terms he is asking the crowd to fund the project.

brussels-beer-projectSebastian Morvan and Olivier de Brauwere started the Brussels Beer Project (a brewery) in 2012 to shake-up Belgium’s conservative brewing sector. Through a number of rounds of donations-for-rewards crowdfunding via the Beer For Life platform they have received support from almost 2,000 crowdfunders.  The formula is simple: each crowdfunder receives 12 beers, every year for the rest of their life, in exchange for €160. Watch the video here. Thanks to that support, they were able to start their venture in 2013, fund their brewery in 2015, and after the last round ended on 31 January 2016 they were able to recruit more talent and invest in more equipment.

Their website says: “Not only the financial support but also the positive energy we received from this beautiful community has been overwhelming and will bring us even further. We don’t have the means of Big Industrials – so the enthusiasm and word of mouth permitted us to take on this adventure and look into the future.”

They continue to involve their crowdfunders with pop-up beers, one every two weeks, at their open evenings (Thursday to Saturday) at the brewery. Based on this crowdsourced feedback they decide which ones to go ahead with on a commercial basis. One that got the thumbs up from the crowd was a beer made with soda bread. This had the added benefit of recirculating 10 tonnes of unsold soda bread that would have otherwise been thrown away.  They are also asking their crowd to propose beers for them to brew. They have so far received 150 suggestions and the winner will be able to go to the brewery and be involved in making it.

The first day also included a panel discussion titled “Are VCs Getting Disrupted by Crowdfunding?” It wasn’t much of a contentious debate, as Bill Morrow, CEO of angel-led investment platform Angels Den made the points that there is no reason to compare venture capitalists and crowdfunding since they operate within distinctly different funding levels. Most businesses using crowdfunding are looking for far less than VCs would consider as a minimum investment.

Walter VassalloOn the second day of the conference the economist and entrepreneur Walter Vassallo, co-founder of internet company MC Shareable in Monaco, gave a talk under the heading Crowdfunding for Sustainable Entrepreneurship and Innovation. One of his key points was that crowdfunding is so much more than simply getting funded. An effective crowdfunding project also increases awareness among wider stakeholders: project proponents; project investors; policymakers, regulators and the related research community.

A new book he has edited pulls together contributions from different authors to try and identify key factors that influence crowdfunding success, and create a validation tool that can assess the viability of crowdfunding projects before they run. The average success rate on Kickstarter is 37%, he said, so there is clearly room for improvement. Copies can be ordered here. A full copy will set you back $205, though individual chapters are available at $37.50.

img_4239The third day of the conference focussed on energy and sustainability issues. The energy market shift to decentralisation and renewable sources dramatically lowers the industry entry cost for new producers. However, investment to fund new energy initiatives and bring them to fruition can often be an issue, and Dr Chiara Candelise of Ecomill – an equity crowdfunding platform in Italy – told us about Smart Financing and Empowerment: Crowdfunding in Energy. Her global study of energy crowdfunding shows that 80% of the money raised has come from loans and equity. For homeowners unable to switch to a renewable or a more sustainable energy supply, crowdfunding renewable energy projects is a further way the crowd can stimulate this market and show their support for alternatives to the established major energy producers.

cedric-donckEntrepreneurs always face funding issues. Cedrick Donck, business angel and co-founder of the Virtuology Academy told the conference on the final day that angel investment and crowdsourcing are increasingly popular routes. Bringing an angel investor onboard has benefits of access to their experience and contacts as well as their money. Crowdfunding could be used to raise further money on top of an angel investment, or maybe use crowdfunding on its own if for some reason you don’t require an experienced mentor.

He echoed previous speaker comments when he said positive by-products of crowdfunding include: increased visibility as effective crowdfunding is also very good marketing; you gain access to the personal networks of all the investors; and it raises your credibility to be able to say you raised money from the crowd. Downsides are that you may have been able to raise more money than the business is really worth as early investors may lack experience. This could present problems if further fundraising is needed later and the value is scaled down. And finally, you may lose some competitive advantage because you will have had to put your business strategy in to the public domain.

Picture-of-CliveIf you are considering crowdfunding, whether on an equity or a donations basis, please get in touch for an objective conversation with me, an independent crowdfunding adviser. My background is marketing rather than financial, and I can help with essentials such as building a big enough crowd of the right sort of people to drive to your crowdfunding project. Or maybe you know someone I could assist who is considering raising money to launch a startup, expand their business, or support a favourite worthy cause. I’m at [email protected] and my tweets are at @Cliveref. Thank you.