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10 Top Tips for Crowdfunding

Posted on October 30, 2017 by Clive Reffell

In my role as an independent crowdfunding adviser I attend many live pitching events and meet plenty of people who have run successful crowdfunding projects. My 10 Top Tips are based on many meetings and conversations with people working at crowdfunding platforms and with entrepreneurs who have run successful crowdfunding campaigns, mainly equity based and some donations-for-rewards projects. This is intended more for commercial enterprises than fundraising for worthy causes, though many aspects would still apply.

Examine projects by other crowdfunding users in your business sector.
Build your own networks of relevant people for as long as possible before going live. Every person you have ever met is a potential backer! This crowd-building includes making professional media contacts to ensure a good response to press releases in your local area and sent to relevant trade/business sectors.
Thorough planning and preparation is vital. Decide on who (the types of people) you want to tell about your offer; create in advance what you’re going to tell them (the content); plan when to tell them (don’t overload demands on your own time by telling everyone all at once, stagger it); decide which communications channels to use – social media, PR to secure media coverage, meetings and events, content marketing, paid-for advertising. You might want to start getting media coverage months in advance to allow time for items to be published so you can refer to them in your crowdfunding pitch.
Pre-sell to your closest contacts and supporters so that you can count on at least 30% of your funding target or pre-orders arriving in the first few days. This gives the project vital momentum and encourages other would-be backers to get off the fence. Also check for opportunities through your crowdfunding platform (when your project is accepted by one) to identify and contact backers in their network with a relevant investment/product history.
Ensure you and your partners/support team (a team of people is important because most crowdfunding attempts by a sole individual fail) have appropriate social media skills, or have a budget to access some.
Crowdfunding can be a fulltime role. Why wouldn’t it be? Success is possibly going to transform your life for the better. Organise your day job, maybe by taking on temporary support, so you have the time to answer questions, send out information, and personally meet prospective backers. Don’t forget – people invest in people, get out and meet some would-be equity investors or people who could place large orders.
Set weekly targets to monitor progress and check that you are doing enough, and establish what’s working well and what isn’t. Change your plans based on your weekly assessments to do more of what’s working best.
Make it easy for your backers to tell their own networks about your crowdfunding project, provide them with content to use by email and in various social media formats.
Be flexible to accommodate other opportunities that may arise, such as offers of retail distribution or interest from an angel investor.
Invest some time on your new backers because they could turn in to important brand ambassadors for your business.

In short, you will need:

soft ‘people skills’ and confidence to engage persuasively with potential backers;
an ability to segment audiences and identify key prospects;
skills to harness the power of the written word;
social media skills;
an easy-to-deliver and understand SMART business plan and financial projections (Specific, Measurable, Achievable, Realistic, Timetabled);
a budget to bring in extra help and any skills or capabilities you lack within your immediate team (such as video production, effective use of social media, writing press releases, organising events);
a campaign plan with KPIs to monitor progress;
and maybe a campaign manager to help you hold it all together and make it work, if you think you need one.

Or contact me, an independent crowdfunding adviser, at [email protected] or on 07788 784373. I can take you through a seven-stage assessment of your readiness to start crowdfunding and identify areas that ought to be strengthened before you go ahead. Then we can start planning how you will achieve success.

Close encounters with the crowd economy at Southampton Boat Show

Posted on September 29, 2016March 15, 2017 by Clive Reffell

Southampton Marina hosts the largest outdoor annual boat show held in Europe, so perhaps it should have come as no surprise for me as an independent crowdfunding adviser to have encountered aspects of the crowd economy there among the hundreds of exhibitors and the opening day celebrity guests.

The event was officially opened by actress Michelle Keegan, formerly of Coronation Street and currently on our tv screens in the BBC drama Our Girl. On stage with her was the GB Sailing Team from the Rio Olympics boasting four gold medal winners.

Olympic success in a wide range of sports has been achieved with financial state support for our top athletes through National Lottery Funding for UK Sport. Every purchase of a lottery ticket contributes a small amount towards crowdfunding national sporting achievement at the highest level. The benefits to the nation are wide ranging:

with more role models to aspire to more people take up or maintain a sporting pastime – which the government encourages as part of the health battle against increasing obesity;
association with success puts a spring in the step, encouraging greater productivity and optimism;
it inspires more people in all walks of life to achieve excellence in whatever it is they do.

In a similar ‘organisational crowdfunding’ vein, an event on Day One of the show was the official handover of a new yacht to the Ellen MacArthur Cancer Trust. The carefully adapted yacht will be used to take children recovering from cancer treatment on confidence-building sailing adventures and has been funded by the People’s Postcode Lottery. Every ticket buyer has made a contribution.

Sailing has a reputation as something of a rich person’s hobby, sometimes described as similar to standing under a shower and tearing up money. FlexiSail has utilised the crowd sharing model to make boat ownership less onerous for owners and to provide access to a “pride of ownership” to a far wider audience. Boats are expensive to buy in the first place and then expensive to maintain and moor somewhere. Yet most of the time they are unused and simply take up space in a marina.

FlexiSail offers a choice of membership options for people to choose from a range of 30 to 40 foot yachts, catamarans and motorboats and use them for a fixed number of days or weeks throughout the year, explained Business Development Manager Suze Hart. Reassuringly for the boat owners FlexiSail also arranges training to ensure everyone has appropriate skills and qualifications, and provides a full two day induction on board any chosen boat. They maintain an online calendar for members to book their time aboard, online logbooks for all the users of each boat to keep a record of problems and any work that needs to be carried out – and FlexiSail carries out the work. And the boat owners have turned their depreciating assets in to an income stream with safeguards in place.

Finally, a vital and integral part of sailing for many boat lovers is a gin and tonic on deck or in the cockpit at the end of a day on the water. In a corner of the Ribeye stand at the boat show Howard Davies, Co-founder and Director of his own brand new gin brand was providing very welcome samples. puedes comprar viagra en la farmacia

The Salcombe Distilling Company, based in Salcombe in Devon, batch produces hand-crafted gin made with obligatory juniper and a secret blend of other botanicals. Premium products like this don’t come cheap and Salcombe Gin retails at £35 a bottle. Howard, who spent part of his previous career path as a sailing instructor, only gave up other employment this summer to concentrate on his new venture, in much the same way that many hand crafted spirits brands have come on the market in recent years.

A search using industry data provider Crowdsurfer showed 15 new distilleries/spirits brands used crowdfunding in the last 12 months in the UK. Crowdfunding is extremely flexible and can be used in a variety of ways to match very different requirements. Some used it on a rewards-for-donations basis, others traded equity to gain long-term investors.

At the lower end of financial targets, one person wanted £3,000 in donations to convert a unit in a suburban London market in to a tasting room and install a micro-distillery to make gin, and a couple of guys raised £30,000 through donations for rewards of branded merchandise to establish a malt whisky distillery in Devon.

Meanwhile, at the top end, the Cotswolds Distillery raised just over £1m from 124 investors at the end of January 2016 in exchange for equity – double its target of £500,000 – and GlenWyvis Distillery in Scotland had raised over £2.5m by July 2016 (against a target of £1.5m) using “community shares” through the crowdfunding platform Crowdfunder.

I hope that Howard’s gin proves to be popular and when he is ready to expand his Salcombe Distillery Company he’ll get in touch with me to explore the benefits and opportunities that crowdfunding could deliver for him.

Maybe you have a business you want to launch or expand? I am an independent crowdfunding adviser, please feel free to contact me for an initial conversation about what crowdfunding could do for you and how I can guide and help you through the process. Send an email to [email protected]. I have gained a wealth of experience in a 30+ year career in Marketing, and it is increasingly evident that implementing a good marketing plan helps attract investment.

Four live crowdfunding pitches received a guarded response

Posted on February 29, 2016May 11, 2017 by Clive Reffell

By independent crowdfunding adviser Clive Reffell.

Live crowdfunding events give entrepreneurs valuable opportunities to deliver their pitches and receive insightful feedback from an interested audience.

An enterprising accountant, Irfan Khalil, has formed a ‘Finance for Startups’ group of over 4,000 people who are interested in equity crowdfunding. Most fall in to one of these four categories:

they want to trade some equity for a cash investment in their business,
they are looking for investment opportunities,
they are at an early stage of considering using equity crowdfunding,
or like me they provide professional services that are useful to equity crowdfunders.

Irfan organises monthly meetings at a variety of London venues. There are slots for four or five entrepreneurs to pitch their business investment opportunity in just five minutes to four or five panellists. The panellists have five minutes to ask questions, and then a final five minutes to provide feedback on what they like, what they consider ought to be better thought through, and so on.

At the end of these ‘formal’ proceedings there is then about 45 minutes of networking for everyone there to exchange ideas, experiences and contacts. Each event has a very collaborative feel to it.

February’s event was in Camden. Four entrepreneurs pitched their opportunity to five panellists in front of over a hundred people.

The panel consisted of (r to l):

Peter Richards, a partner in Venture Pilot, which provides technology organisations with a scalable structure for growth;
Amarjeet Hans, Director of Crystal Clear Business Consultants Ltd;
Raimonda Junkanaite, an entrepreneur and early-stage business adviser who is setting up CrowdVelocity, a crowdfunding-for-donations platform;
John Elsdon, Chairman of the management consultancy Allied Powers;
Akeem Famuyiwa, an intellectual property specialist and an entrepreneur with a background in pharmaceutical science.

The four entrepreneurs and the opportunities they pitched to the panel and the audience were as follows.

.James Grant, founder of Weavee.co.uk. James is creating an app that connects job vacancies, recruiters and candidates seeking work. This is a competitive area, I have seen several crowdfunding pitches in the last few months based on apps for the job placement market. James was seeking £150,000 and believed this would be the only round of investment required before he started making a profit in the back half of Year One – subject to reaching a minimal critical mass of 10,000 registered job seekers and 100 recruitment consultants. Five job agencies are currently trialling the technology. .James had pitched three months before and the panellists agreed his pitch was getting tighter and he was coming across as more confident.

Next up was Julian Tremaud, founder and CEO of Fanteamz.co. “86% of viewers skip TV ads” he declared, as a way to start explaining that he will provide organisations with an opportunity to hire teams of brand ambassadors to deliver positive word-of-mouth campaigns. He has Spanish partners and they already have successful case histories from South America, particularly in the music concert and festival sector. Julian is seeking £250,000 for 20% equity, and forecasts £21m profit by the end of Year Three.

The panel advised Julian to be better able to explain how the company valuation figure was reached. Another suggestion was try a round of donations crowdfunding before an equity deal.

Third pitch was from James Parker from Instaload. One third of all US truck mileage is with empty vehicles. Freight bookings go through expensive brokers, often at short notice that leaves the drivers stuck with no loads to pick up at their destination to then take on to somewhere else. The growers and manufacturers with goods to shift sometimes never meet or speak to the truckers who deliver their products. To address these factors, Instaload are developing an app that will provide a direct interface between the people with products that need transporting with the smaller truck companies that carry about 20% of the USA’s road freight. This 20% market share was valued at an estimated $114bn in 2014. James was seeking £50,000 to complete the app development in exchange for 10% equity.

The panel suggested it might be too difficult to raise the finance in the UK if it was going to be invested in the US. Investors would not have market knowledge to make a confident decision and generous UK tax breaks would not be available to them. There might also be heavy industry regulation that protected the brokers’ position. Later in the informal discussion it was suggested that potential investors might not believe it credible that they could get a 10% stake in a company targeting a $114bn market for just £50,000.

The final pitch of the evening was given by Borja Goyarrola, director of Gobe! Borja hopes Gobe! will become a travel/lifestyle app populated with content provided by users about their own personal favourite locations and places to go. The sharing of such local knowledge and tips would allow travellers and visitors to experience more of the living contemporary culture of a city rather than look at iconic monuments and exhibits that celebrate past achievements. Borja was a last minute addition to the roster and it was understandable he did not have a presentation available alongside his demo video.

Borja wanted £100,000 to finish developing the app and to pay for some digital and social media marketing. The panel suggested he should target some low-scale income from advertising before he pins his hopes too much on a big spending global advertiser such as Unilever stepping in to support the fledgling Gobe! I know from experience that fmcg giants and their advertising advisers can be rather conservative when faced with new marketing channels and opportunities.

Whilst equity crowdfunding is clearly about raising finance, research shows that more crowdfunding project creators have difficulties with marketing issues than anything else.

I have over 30 years’ experience in various results-focussed marketing roles and have concentrated on crowdfunding since 2014. I’m happy to meet for initial consultations free of charge. How things develop after that depends on the scale and scope of your aims and the extent of your marketing activity so far.

Clive Reffell, founder of Comanche Communications & Marketing and an independent crowdfunding adviser: E [email protected] and Mob 07788 784373.

Definite tech firm skew to live crowdfunding at StartUps2016

Posted on January 21, 2016May 10, 2017 by Clive Reffell

The ‘Show Me The Money Zone’ at the recent StartUps 2016 day for aspiring entrepreneurs saw five tech-based crowdfunding projects showcased to a panel of judges in front of a maximum capacity audience in KPMG’s Canary Wharf building.

The event was organised by IntelligentCrowd.TV and three of the five startup companies will be included in their weekly Seed & EIS Hour show going out at 19.00 on January 28.

The top class judging panel included (l to r):
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Modwenna Rees-Mogg, founder and CEO of Angel News – “The intelligent and relevant news service for investors and entrepreneurs”
Grant Calton, partner at Ironbridge Capital Partners. Grant has spent much of his career in the music and media industries as an entrepreneur and investor and is also an active investor in the media, tech and property sectors.
Jenny Tooth OBE, CEO of the UK Business Angels Association, the professional trade body for angel and early stage investing.
Damian Wasey, Head of Sector Partnerships, KPMG Small Business Accounting
Julia Groves, Chair of UK CrowdFunding Association and a director of Trillion Fund – a crowdfunding platform focussed on loans to renewable energy projects.

The five pitching companies seeking funding later this year each gave very professional presentations that summarised their business idea, outlined their development plans and aims, and explained what they intended doing with the funds they wanted to raise. They had to do this within a strict time limit and then field questions from the panel. The panellists assessed each pitch to decide on a final ‘winner’ on the day.

The winner was WorkMatch, a smartphone app creating a marketplace to connect vacancies in the hospitality industry with a somewhat itinerant group of informal workers. It allows employers to run background checks, hire, pay and review staff from their smart devices. Workers can access, screen and apply for hundreds of vacancies. CEO Matthew de la Hey and COO Alexander Hanson-Smith presented.

Close second was BackTracker. CEO Henry Latham and co-founder Geordie Palmer pitched their plan for an online social guide for backpackers. Backpackers have a different mindset and set of criteria to holidaymakers and this app enables them to find other people’s tips and to pass on their own.

In the order that they presented, the other three startups were:
FindEx, a currency exchange marketplace on a powerful mobile app that enables users to locate the most competitive currency exchange rates and provides FX retailers with a cloud-based platform on which they can encourage business. It was pitched by CEO Ricky Lee.

The Virtual Insight team of CTD Thomas Clayton and CEO Dr Cyril Godart presented their virtual reality means of learning to play the piano from a private tutor to a point of experiencing performing any one of hundreds of compositions to a ‘live audience’. The audience had been filmed listening to a maestro performing each piece of music to ensure genuine reactions and appreciation. In time this could be expanded to include other instruments.

Final pitch was Owlstand, an online exhibition and gallery platform for the display, sale and purchase of art. Art is currently displayed online the same way as products on supermarket shelves, said CEO Stephen Yang. When questioned, he admitted it was tricky to find sellers before there were any buyers and buyers without any sellers first committed to the site. His solution had the judges and the audience in fits of laughter: “Well, you just gotta fake it ‘til you make it.”

Panel laughing — The judging panel appreciated Stephen Yang’s candour: “you gotta fake it ’til you make it.”

The IntelligentCrowd.TV website show on January 28 will feature WorkMatch, Virtual Insight and Owlstand.

If you want independent crowdfunding advice to develop your own business idea from a dream to reality then contact me, Clive Reffell, at [email protected] or on 07788 784373. You can follow me on Twitter @Cliveref.

Plenty for crowdfunders at London’s ‘The Business Show 2015’

Posted on December 7, 2015 by Clive Reffell

The Business Show 2015 on December 3 and 4 in London provided great opportunities for aspiring crowdfunders to check out several aspects of what’s involved.

On the topic of business start-ups, Daniel Murray spoke about raising £2m to launch online fashion shop Grabble without previous fundraising experience, and some of the important lessons he learned along the way. Like no matter how clever he thought he’d been in his advertising job he quickly realised that he knew next to nothing about running a business, and that there was possibly something to learn from everyone he met. This included leaving every meeting with the name of at least one person who might be able to help him.

Also on the subject of start-ups, Nidhima Kohli, founder of online beauty products site My Beauty Matches, talked about how she built from nothing a community of 85,000 people. Big lessons from her also included the personal sacrifice necessary to build a successful business, which involved quitting her job, renting out her flat and moving back in with her parents. Nidhima also strongly recommended working with students hungry for work experience rather than burning money using agency advisers

Three different aspects of crowdfunding were represented at the show. Bill Morrow, CEO of Angels Den, explained that angel investors are often looking for fun reasons to get out of bed in the morning rather than focussing exclusively on their return on investment. Expect mentoring involvement from Angels Den investors, know how much money you need and what you are going to do with it so that you give a good pitch, and also show some good social skills when you pitch to them so that investors want to work with you on a personal basis.

A different ‘money only’ option is provided by the investment loan platform Funding Knight. Chief Exec Graham Marshall explained it matches multiple lenders – not investors – with borrowers. This means lenders are able to diversify their investment loan across numerous businesses, and they can also benefit from a secondary market to trade investments as they have fixed, known returns. And the people seeking investment can retain their equity.

In between these two alternatives is Crowdcube, the world’s largest equity crowdfunding platform with 52% of the UK market. Head of Equity James Chalk explained that earliest investors in equity crowdfund projects are often quite small-scale, though when enough of them have created momentum behind a crowdfund project it is not uncommon for serious high net worth individuals to then step in with significant investments in which they may want to take an active interest. 19% of Crowdcube’s registered investors earn over £200k p.a., and HNWIs have been responsible for 59% of all the money invested through Crowdcube since it started in 2011.

Other important issues for crowdfunders included protection of Intellectual Property through copyright, registration and use of trade marks. This is all very valid if you’re going to essentially post a business plan online for people to decide whether or not to invest in you and your idea.

There were further lessons for deciding on items to offer as crowdfunding perks from a branded merchandise supplier. Thank about what’s memorable and relevant, allows good quality at an affordable price, is going to be useful to people and will last long enough.

Acquiring contacts and driving enough of the right types of people to an online crowdfund project is the core basis of success or failure, and the most popular seminars were any that offered to explain how to put together an effective social media strategy. Relevant presenters included Kristian Downer of DowSocial.

Finally, it’s well known that anyone trying to put together and run a crowdfunding project on their own has the odds stacked against them. A team of people almost always gets better results. And Alastair Cook, captain of the England cricket team, made an appearance to draw some parallels between leading teams in business and in sport. When things get tough – and inevitably at some stage of crowdfunding they will – believe in yourself as a leader and dig-in rather than pack it in. And when your team is under pressure it’s vital that everyone keeps putting in their fair share of contribution, no ifs, no buts, no excuses or cop-outs.

This collection of issues to consider shows how complex putting together and running a crowdfunding project can be. If you think you could benefit from independent crowdfunding advice, whether for equity or donations-for-rewards crowdfunding, then please get in touch: [email protected].

Equity crowdfunding hopefuls and ten tips from successes

Posted on November 23, 2015March 15, 2017 by Clive Reffell

This month I enjoyed a week in which week I met nine entrepreneurs at different ends of the equity crowdfunding spectrum. Six were seeking investors, three were sharing tips on having achieved successful results. The willingness to share experiences and support each other is a very positive characteristic of the crowdfunding sector that helped me decide to specialise as an independent crowdfunding adviser. And those tips apply just as much to donations-for-rewards crowdfunding as equity projects.

Investors and business development advisers critique crowdfunding hopefuls

The six entrepreneurs ready to trade equity for investment presented to a panel of four advisers and an audience of over a hundred people gathered in Whitechapel, London E1. The audience included several potential investors plus other people who were planning how to conduct their own equity crowdfunding to launch or develop their businesses.

The meeting with the successful users of crowdfunding was organised by equity platform Seedrs and held in a function room at Camden Market, London NW1.

The Hopefuls
Here is a brief summary of the six companies and the diverse business sectors they operate in.

In Your Stride, founded by Shaun Lancaster, is a smart adaptive coaching platform. It matches runners’ individual abilities with a database of over 20,000 events to create a custom training plan that adapts with progress. It is compatible with a range of wearable technology for easy use. It is available through a personal subscription, and also supported by charities that stand to receive more sponsorship income if people running in events on their behalf achieve better results. In Your Stride has exceeded its £100,000 target on Crowdcube for a 15.8% stake in the business.

Unis Learning provides HR departments with the means to test the aptitude of potential employees and thus place them in the most productive roles compatible with their inherent talents as well as academic qualifications. They wanted £150,000 for 20% and would seek further investment two years on.

Leeds-based Perks Loyalty, represented by Commercial Director Whaleed Shihadah, enables local traders to co-operate and utilise electronic customer loyalty cards. It empowers the traders with affordable technology to build and maintain business traffic through customer tracking and dynamic and adaptable benefits. Perks Loyalty is currently seeking £130,000 through Crowdcube for 8% of the company. One of the panellists thought they weren’t seeking enough to establish themselves firmly in their competitive marketplace.

Two bespoke high-end men’s tailoring companies, Daniel & Lade and Edit Suits Co., utilise the benefits of electronic 3D imaging and laser cutting to create quality clothing at a fraction of the cost of traditional suppliers. Both want extra money fast to develop ahead of the me-too competition in this obviously highly competitive business sector.

Colony is a new management software tool to manage increasing numbers of staff working remotely. It helps new office-based companies set up without the need for as much office space as traditional businesses, if any at all. They want £450,000 for 20% and in 12 months they will be seeking further investment.

What all six have in common is harnessing the latest IT, developing its use to provide tangible customer benefits, and trying to raise funding to move faster than inherently slower existing competitors tied to older methods and perhaps dated software. If you have a business idea along these lines then perhaps you’d like to get in touch with me and we can explore the opportunities and benefits that equity crowdfunding could deliver for you.

The successes
The three successful equity crowdfunding users had all used the Seedrs platform.

Shaken Cocktails raised £118,690 for 9.43% equity in March 2015
Incubus is a business incubation service for start-ups provided on a converted double-decker bus. They raised £53,770 for a 15.95% stake in July 2014
Brother Cycles make bike frames and builds custom bicycles for their customers. They raised £125,880 for a 16.22% stake in the business in July 2015

Ten tips the three companies offered.

Thorough planning and preparation is vital. Decide on who (the types of people) you want to tell about your offer, create in advance what you’re going to tell them (the content), and plan when to tell them (don’t overload demands on your own time by telling everyone all at once, stagger it).
Examine projects by other equity crowdfunding users in your business sector. Check for opportunities through your platform provider to identify and contact backers with a relevant investment history.
Build your own networks of relevant people for as long as possible before going live. Every person you have ever met is a potential investor! This crowd-building includes making professional media contacts to ensure a good response to press releases in your local area and sent to relevant trade/business sectors.
Pre-sell to your closest contacts and supporters so that you can count on at least 30% of the funding arriving in the first few days. This gives the project vital momentum and reassures other would-be investors.
Ensure you and your support team have adequate social media skills, or have a budget to access some.
Crowdfunding can be a fulltime role. Organise your day job, maybe by taking on temporary support, so you have the time to answer questions, send out information, and personally meet prospective backers. Don’t forget – people invest in people, get out and meet some investors.
Set weekly targets to monitor progress and check that you are doing enough, and establish what’s working well and what isn’t.
Make it easy for investors to tell their own networks about your investment opportunity, provide them with content.
Be flexible to accommodate other opportunities that arise, such as offers of retail distribution.
Invest some time on your new backers because they could turn in to important brand ambassadors for your business.

In short, you will need soft ‘people skills’ to engage with potential investors; an ability to segment audiences and identify key prospects; skills to harness the power of the written word; social media skills; an easy to deliver and understand SMART business plan (Specific, Measurable, Achievable, Realistic, Timetabled); a budget to bring in any of these skills and any other requirements as necessary (such as video production, temporary office support staff); a campaign plan with KPIs; a campaign manager to oversee everything if you don’t have the time. These requirements are just as important for donations-for-rewards projects.

Or contact me, an independent crowdfunding adviser, at [email protected] or on 07788 784373.

Crowdfinders Live, a top all day crowdfunding conference

Posted on October 16, 2015October 18, 2015 by Clive Reffell

Over 400 people booked their place at Crowdfinders Live (#CFLive) held in London on 15 October 2015. A blend of personal and company investors, entrepreneurs seeking funding and crowdfund platform providers spent the day networking and hearing industry updates, panel discussions of topical issues and some live pitches from companies seeking equity funding. This is not a summary of the whole day, it’s selected items that resonated most with me personally.

Will Broome, a respected figure in the events and hospitality industry and creator of londonlaunch.com in 2001, had the role of MC. In his first of several entertaining sessions at the microphone he reckoned that having a good idea made up about 1% of a successful crowdfund project – 99% being hard work! This was a comment I used in one of several tweets during the day (@Cliveref) which were shown on the big screen behind the speakers and panellists.

Nicola Horlick, CEO of Money&Co, a person-to-business lending platform, was the first speaker. Banks are generally still not lending to SMEs, in part due to recent rules on bank capital requirements to support their amounts on loan. So there is a demand for business loans and through its high net worth clients who are looking for good investment returns there is a source of funds available through Money&Co. There is the risk of business failures among start-ups, though the latest average gross annual yield for Money&Co investors is 9.1%. For those of us of more modest means, a new Innovative Finance ISA will allow individuals to invest up to £15,000 a year in loans to small businesses in a tax-free wrapper.

Next speaker was Christian Mouyesset, co-founder of Hummus Bros which raised £500,000 this year (against an initial target of £250,000) through equity platform Seedrs. He stressed the importance of pre-selling to guarantee some early funding to give a project momentum. Whether it’s for equity or donations crowdfunding, empirical evidence shows that successful projects receive 30% of target within the first few days. This gives strong encouragement to others who may be thinking about investing or donating.

Kiki Loizou, Small Business Editor at The Sunday Times, chaired a panel session covering topical issues in equity crowdfunding. Sound-bites included:

A lingering unresolved issue is how new companies go about establishing a credible valuation figure – some are simply outrageous. Julia Groves, Chair of the UK CrowdFunding Association said investors should just reject those projects, so that the marketplace would cultivate responsible behaviour.
Case studies of failed projects as well as success stories should be examined to identify common reasons for failure to reach target. I tweeted whether doing this and making the results easily available should be within the remit of UKCFA?
There are people looking to invest more money than is required by current good opportunities.
To encourage continued growth, perhaps there ought to be case studies from an investor perspective as well from the companies that receive funding. Another UKCFA task?
Equity crowdfunding is maturing fast, though perhaps more should be done to educate potential small-scale investors about possible risks and the length of time they may have to wait to cash out their investments.

In a second panel session, Michael Wilkinson of CrowdCube repeatedly stressed how important it is for crowdfund project owners to understand the need for effective marketing to drive a big enough crowd of the right type of people to their project. This is a very good piece of advice that was also identified by business think tank Nesta as often being a bit of a problem, which I pointed out to conference delegates via Twitter.

The afternoon session showcased 15 minute pitches from seven fund-seekers.

David Brabham, several times winner of the Le Mans 24 Hour Race and son of Formula One champion Sir Jack Brabham is using crowdfunding as part of his plans to revive one of the most famous names in international motor racing.

Kelvin Mackenzie (right), formerly editor of The Sun and owner of talkSPORT radio station, is raising funds for his price comparison site A Spokesman Said. The site also champions the consumer rights of ‘little guys’ who believe they are being bullied or ignored by big companies.

Former TV Apprentice challenger and qualified lawyer Lauren Riley (left) wants £150,000 to develop TheLinkApp, a version of WhatsApp designed for the legal industry to improve both their profitability and their clients’ quality of experience.

Husband and wife team Rufus and Charlotte Pearl already have a thriving business selling their Pink Lining brand products to the Mother and Baby market. In the UK they are stocked in 300 stores including Harrods. They are also stocked in Paris, New York and Tokyo, and are big in South Korea. They want to expand further. Strong social media networks are vital for crowdfunding success , and they have a customer database of over 100,000 people and 55,000 Facebook fans.

The other pitches include a dog-sharing website called Borrow My Doggy, a UK based asset management company called Alquity which invests in sustainable ethical projects in Africa, and Mayfair Brands. Mayfair Brands has achieved national USA distribution for their high quality gin, vodka and rum produced in Clapham, London. Now they need investment to create the stock levels needed to soon meet the American orders.

And Mayfair Brands products were available in the post-event party where I got together with several other delegates, some of the speakers and panellists, and Luke Davis (pictured on the left), CEO of Crowdfinders who organised the event.

If you want to discuss your own thoughts or plans for crowdfunding with a specialist independent adviser then please send me an e-mail to [email protected] or call me on 07788 784373.

Crowdfunding’s role for worthy causes

Posted on August 4, 2015March 15, 2017 by Clive Reffell

Crowdfunding goes from strength to strength. And for social community projects and worthy causes, crowdfunding provides new and exciting opportunities for fundraisers to exceed previous levels of expectations, perhaps by up to three-fold.

Here’s how it works. Like most other disruptive changes to established ways of doing things, it is based on the internet. Crowdfunding delivers an innovative way to generate an investment budget to finance a business start-up, expand an existing organisation, or achieve a worthy aim in the community. The crowdfunding process makes your funding requirement public on a dedicated website platform, and you need to drive a big enough crowd of people to it and convince a high enough proportion of them to give just a little bit each towards what you need.

There are four broad types of crowdfunding. For businesses it includes money on loan with pre-set repayment terms, or in exchange for some company equity. For social community projects or worthy causes there are direct appeals for donations (with or without reward incentives) that do not incur any responsibility of repayment.

Donations campaigns are often built around a donations-for-rewards model. Donors not only feel a rosy glow from supporting a cause they empathise with, they are also encouraged to give by the range of perks and incentives offered in recognition of their support. This reduces the net income a crowdfunding project generates by the amount it costs to source and distribute the perks. Though if the perks include merchandise material that promotes the cause or the project then they can deliver valuable longer-term visibility. Perks may also include reduced rates to buy products or use a facility or venue, encouraging a level of habit-forming patronage.

Here is what makes crowdfunding particularly effective for worthy causes. The money raised through donations campaigns tends to come in three roughly equal parts. The first third is donations from your closest contacts and you need to personally secure their support. In the past this may often have been the extent of the fundraising for a particular cause or project. However, crowdfunding now provides effective leverage to use this income as a base upon which to achieve even more, perhaps double the initial amount again. Do the personal selling in time to refine an effective pitch for your important crowdfunding video.

The donations from the key personal contacts should appear quickly in your online crowdfunding project, certainly in the first few days because they will inspire and encourage other donors to follow them. The next third of donations are likely to come from other contacts in your e-mail database and various social media networks who are not close enough for you to have reasonably approached on a personal basis. It is thus vital to have an organised e-mail database and sufficiently sized social media networks for this to be viable, and some prepared content to quickly distribute. You may want to consider an e-mail automation programme. Independent crowdfunding advice on several of these issues could be very worthwhile.

The average UK crowdfunding donation is around £35, and – again on average – one in twenty people who visit an online crowdfunding project will make a donation. Depending on your target amount you can start doing the sums to estimate the size of crowd you need to drive to your crowdfunding project.

And finally, there are many, many people out there who are open to contributing to good causes. Up to a final third of your income can come from people outside of your networks, people you have never been in touch with before, but who are encouraged by the quality of your project and reassured by the fact that so many people who do know you are prepared to contribute. It gives them confidence they are making the right decision. Traditional media coverage generated through PR and Twitter hashtagging can usefully extend awareness of your crowdfunding project beyond your known contacts. This needs to be put in hand perhaps months before your crowdfunding goes live. You can of course then add these new people to your database to maintain regular contact and develop a deeper relationship with them.

Clive Reffell established Comanche Communications & Marketing in 2014 to provide independent crowdfunding advice to SMEs. He brings a wide range of problem-solving experience from a 30-plus year career in results-focused marketing. His formal qualifications include post-graduate diplomas in direct and digital marketing from the IDM and business management from the Open University Business School.

W: www.comcomms.com. E: [email protected]. M: 07788 784373. T: @Cliveref

A high octane evening of crowdfund investment opportunities

Posted on June 29, 2015May 10, 2017 by Clive Reffell

It had all the ingredients for a heady cocktail of modern-day wheeling and dealing. Nine entrepreneurs seeking equity or loan investments through crowdfunding. Each giving quickfire three minute pitches followed by a couple of questions from a Crowdcube convenor in front of an audience of around a hundred people. These were potential investors and some would-be entrepreneurs who had come along to get a flavour of the occasion before they go under the spotlight themselves. And it did not disappoint.

It was one of Crowdcube’s regular monthly events that allow registered investors and investment seekers to get together in person for some important discussions. The funding seekers were spread around a few tables in a meeting area, some with samples of their products. Potential investors and the simply curious began to appear after 6.30 pm.

Among the refreshments available was a Grind stand. Grind is a small group of espresso and cocktail bars that provide “beautiful spaces in London for eating, meeting and drinking. Their strong, bitter coffee cocktails with Icelandic vodka and Kahlua coffee liqueur were a new take on the classic Black Russian. They are seeking £750,000 through bonds that will pay 8% interest over four years.

Is Joe Inglis on to a winner with a website, Qtsy, aiming to become a favourite for pet owners? They can post photos of their own pets, and vote on others. Votes win points and points mean prizes. Joe is after £150,000 for 12.5% equity.

As a cyclist who has suffered from the actions of errant motorists (and an impatient passenger in a traffic jam) the Lumo Clothing proposition has strong appeal. Doug Bernier is targetting £200,000 investment for 14.29% equity in his company that produces washable bags and jackets for cyclists with built-in powerful LEDs to give added accident-avoiding visibility. This is clothing and accessories designed for the places you’re going to, not the archetypal cyclists’ bright coloured and skin-tight garb. You could wear it in Grind and feel at home.

It may seem unfair not to mention the other projects seeking funding but I want to give you a flavour of the evening, not a blow-by-blow account of the whole proceedings. Though here is a line up of the entrepreneurs using this democratic source of securing funds to achieve their business aspirations.

Left to right: Doug Bernier, Lumo Clothing; Hasan Mustafa, Collar Club; David Abrahamovitch, Grind; Richard Berkeley, Linkz; Joe Inglis, Qtsy; Alex Holland, Brew; Mark Aspinall, Extremis Technology; Sokratis Papafloratos, Togethera.

Crowdcube does not allow questions from the crowd following the quickfire presentations. So you have to stay at the event and find the people you want to talk to. If you have any interest in raising money through crowdfunding, even if it’s on a donation basis rather than equity or loan, checkout how to attend on the Crowdcube website and get along to the next one. It will show you how high the professional bar is set to be a winner in this competitive arena. And if you want help or guidance with any aspects of crowdfunding, please contact me, [email protected].

Crowdfunding and its use by the English wine industry

Posted on May 14, 2015May 10, 2017 by Clive Reffell

English Wine Producers Trade Tasting, 11 May 2015

The English wine industry is facing several positive challenges, and some major players are turning to crowdfunding as a means to best take advantage of opportunities in a fast growing market.

The English Wine Producers annual tasting for the drinks trade and media took place on May 11 just off Parliament Square, Westminster. It is a major event for EWP directed at the wine trade prior to the English Wine Week consumer event, running this year May 23-31. I spoke with several industry leaders.

Some notable wine writers and reviewers were also present, including Oz Clarke and Jane MacQuitty, wine writer for The Times.

Some quick background. 2014 was a bumper year for the English grape harvest, and production rose by over 40% to 6.3m bottles. Of which an estimated two-thirds are sparkling wines. Part of this growth is also because the amount of land under vines has doubled in the last seven years to around 2,000 hectares.

The largest English wine producer is Chapel Down in Kent. They reported record sales of £6.1m in 2014, and have recently secured a further 326 acres on long leases to plant more vineyards.

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Future plans are being financed with £3.95m raised against 14.1% equity through the Seedrs crowdfunding platform in three weeks last September. This made Chapel Down the first publicly listed company to use crowdfunding. They are also building a brewery, and preparing for a period of consolidation within the industry.

Frazer Thompson, CEO, told me one of the greatest benefits of crowdfunding was that he had acquired not only the money but nearly 1,500 brand advocates who will continually support Chapel Down, not only through future personal purchases but also gift purchases and relentless word-of-mouth support.

If you’d like further information and advice about using crowdfunding to generate an investment budget please contact me, [email protected]. Your plans don’t have to be as big as Chapel Down’s. For example, in the brewing business the Camden Town Brewery recently raised £2.7m. Yet the Hop Stuff Brewery in south east London launched after raising £58,000 through crowdfunding.

Favourable comparisons to Champagne helped English sparkling wine establish an early market position and a price point far removed from Prosecco and Cava. These days, some English producers are more keen for their products to stand on their own two feet. Simon Bladon, proprietor of Jenkyn Place in Hampshire, didn’t mince his words: “Why should I want my English sparkling wines compared to an inferior product?”

Brad Greatrix, winemaker at Nyetimber, at the top quality end of the English sparkling wine market, told me wine makers from Champagne are being brought in by several wineries to contribute and share their skills. “Chalky soil in southern England is very similar to the Champagne region, though they marvel at the better quality of the English grapes they are given to work with.”

He believes English sparkling wine producers also benefit from greater freedom to use grape varieties of their choice than their counterparts in Champagne.

Another producer using crowdfunding right now is Hambledon Vineyard, England’s oldest commercial vineyard (est 1952), in Hampshire. MD Ian Kellet worked in finance and the corporate food and drink industry before buying Hambledon. He has brought these skills to bear with a crowdfund through CrowdBnk to raise a target of £2.75m through loans, rather than equity. Ian told me he saw no reason to part with any share of his company.

The minimum investment is £10,000 for a five year term. For a £10,000 investment after 5 years an investor will get their £10,000 principal back, plus a £4,000 lump sum, which is 8% interest per annum. They also receive 1/2 a case of Hambledon Classic cuvée every year and at the end of the term have the option to convert their principal into Hambledon shares at £2.20 per share and/or Hambledon wine.

At May 14, with 18 days to go, 20 investors have so far pledged £2,329,400, almost 85% of target.

A testament to the growing quality of English wines was the presentation of Sommelier Wine Awards 2015 to Gold Medal winners Wiston Wine Estate on the South Downs, and Sharpham Vineyard in Devon. These awards are internationally contested, and as well as being Gold Medal winners they received the added Critics Choice accolade as being particularly suitable for sale by the glass.

Dermot Sugrue, left, and Harry Goring, right, winemaker and co-founder respectively of Wiston Wine Estate, receive the Critics Choice award for their Blanc de Blancs 2010.

It was certainly a very pleasant day for me to sample many of the splendid wines available at the tasting. My thanks to the EWP Marketing Team for allowing me to attend.

Please contact me for further information and advice about using crowdfunding to generate an investment budget, [email protected].