However, it's not simply turning up online with an idea. Crowd sourcing expert and Funding Game founder Paul Grant says that you need to make sure your proof of concept is firmly in place before you head online to fund raise. Read the full article here
This article appears in the March 2014 edition of Insight, the global eMagazine for management accountants by CIMA which is sent to nearly 200,000 members, students and other professionals every month. The idea of internet crowd sourcing funding for your business start-up is taking off. At a time when bank loans are hard to get, using sites like kickstarter.com to generate funds is increasing.
However, it's not simply turning up online with an idea. Crowd sourcing expert and Funding Game founder Paul Grant says that you need to make sure your proof of concept is firmly in place before you head online to fund raise. Read the full article here
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What are the different ways to crowdfund? In June 2012 Escape the City (Esc) raised £600k on the crowdfunding platform www.crowdcube.com. If that was not enough they broke a new crowdfunding record by raising it in just eight days - 394 investors putting in an average of £1,522. They made it look easy and have encouraged many more early stage businesses to give crowd funding a closer look. Crowdfunding is on the rise and will continue to be so for at least the next few years. Excluding debt funding there are two main types of crowdfunding platforms: 1. Gifting crowdfunding sites such as www.kickstarter.com or www.indiegogo.com where no equity is involved. The “donations” can be as small as £10 and can involve rewards such as tee-shirts, invites to launch parties and products that have been produced post-funding. Often this type of platform suits creative industries and social enterprise. 2. Equity crowd funding, such as www.crowdcube.com and www.seedrs.com where, in return for cash, a person can play Dragons Den and take a tiny stake in a company that potentially could produce a healthy return on investment. The individual investor or crowd will have no say in the company but often there can be several other fringe benefits to being an investor, similar to the gifting sites above. With both types of crowdfunding you upload your pitch and then have typically 60 days to secure the full amount of capital you require. If you fall short of the target funding, all the capital raised gets returned. The costs are usually 5-7% of capital raised. For the benefit of this blog post I will focus on equity crowdfunding. So why were Esc so successful? The short answer is that their business was simply a good match for equity crowdfunding. Can you say that about your business? Let's take a look at five critical factors for Esc's success when raising equity crowd funding:
Is it right for your business? Crowdfunding will continue to gather hype in the months ahead. This is good news for entrepreneurs, as it means high valuations, a much quicker route to capital, and access to a large base of enthusiastic investors spreading the word about your business. Should this option not suit your business however, it's important to remember that crowdfunding is just one of many alternative routes to funding. But how do you know whether equity crowdfunding is right for you? If you can tick off all the five points above for your business – then go for it! This article first appeared at Knowledge Peers 2012 This is a blog post on crowdfunding I wrote for Knowledge Peers in 2012 and reposted here ahead of their Exchange 2013 which included a spotlight on alternative funding. You can read my original post here and find out more Knowledge Peers' Alternative Funding Network on their website. On Wednesday this week I joined a live Q&A session with the Guardian Small Business Network team to exchange some advice and insights on crowdfunding. Also on the panel were crowdfunding platform experts Darren Westlake, CEO and co-founder at Crowdcube, Alysia Wanczyk, marketing director for Seedrs and Ayan Mitra founder and CEO of CrowdBnk, as well as specialists in legal and financial services and entrepreneurs who have received crowdfunding. You can read the transcript of our discussion here. To become a member of the Guardian small business network register for free here.
£600,000 awarded to roll-out of entrepreneur centres across six UK regions. Abigail Van-West at Startups reports on plans to expand the British Library’s entrepreneur centre across the country which have been supported by both Barclays and the government. Set to replicate the British Library’s Business and IP Centre, which provides entrepreneurs with free access to advice clinics, practical workshops and networking events, the centres are set to roll-out across Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield. Following funding early in 2012 from the Intellectual Property Office, the new centres have secured additional support, with secretary of state for communities and local government Eric Pickles announcing his intention to put £600,000 towards the project over the next two years as part of the Enterprising Libraries project. Similarly, Barclays has signed an agreement to support the webcast of the British Library’s ‘Inspiring Entrepreneurs’ events, which have previously featured entrepreneurs including Lord Sugar, across the six national libraries. Following a pilot, which has seen 2,000 local entrepreneurs securing business support, the first official centre is set to launch in Newcastle in the Spring. Announcing the funding Pickles commented: “This fantastic project deserves Government support. It will give communities business support and turn town and village libraries into incubators of innovation. "By expanding the pool of entrepreneurial talent and reaching every community it will lead to the creation of more businesses, more jobs and ultimately, contribute to economic growth across the country.” Bootstrapping is all about creatively using the resources that you have. Entrepreneurs who attend my seminars are helping me to compile a list of great money-saving resources for start-ups – some are completely free and some are cost-effective for new businesses. Below are ten of them. For another 100 click here. And if you come across any great resources that you'd like to share with other entrepreneurs, please let me know! Thanks, Paul | pgrant@thefundinggame.co.uk 1. www.bl.uk/bipc British Library IP & Business Centre. A fantastic resource. Tons of free information, low-cost training and three hours of a professional researcher’s time 2. www.mymas.org Manufacturing advisory service – free advice, contacts and even grants available 3. http://99designs.co.uk post a competition with prize which you award to the best design 4. www.fiverr.com finds someone to do a special task or skilled work for about £3.50 5. www.hardtofindseminars.com free audio training for marketing your company 6. http://seedrs.com for businesses looking to raise up to £100k in seed capital 7. http://westminster.the-hub.net cool and cost-effective workspace a stone’s throw from the Institute of Directors 8. www.womenlikeus.org.uk very effective for recruiting part-time staff 9. http://sketchup.google.com for modeling an idea without using CAD 10. www.meetup.com/londonocc Open Coffee meet-up group for networking and advice For the full 110 money-saving resources for start-ups list enter your email here. If you come across any great free or cost-effective resources that you'd like to share with other entrepreneurs, please let me know. Thanks, Paul | pgrant@thefundinggame.co.uk Global Entrepreneurship Week (GEW) is the world’s largest campaign to promote entrepreneurship across 115 countries. This year it takes place between 12th and 18th November. In the UK, the campaign is hosted by Youth Business International, a global network of initiatives that helps young entrepreneurs to start their own business, in partnership with Barclays. Last year over 900 partner organisations got involved in the week in the UK, reaching 213,000 people through 2,305 activities. This year the campaign is even better. If you’re thinking about starting a business, or are in the early stages of running one, make sure you attend an event which can help you with your entrepreneurial journey. Check out what's on in your area here. I was at the London Business Village earlier this week, a high-quality event hosted by the team at the British Library Business & IP Centre (BIPC) as part of GEW. You can read about it here - and there's still more to come. If you haven't visited the centre before, take the opportunity as soon as you can - it's an excellent free resource for entrepreneurs where you'll find all the help you need to start or build your new business. To keep up with the latest news and events during GEW visit: |
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