Take Advantage of Crowdfunding Opportunities
by Bloom intern Cara Pleym
A recent article in the Herald highlighted the astonishing results from research commissioned by the Glasgow Chamber of Commerce – Scottish firms could have raised £16 million through crowdfunding, but actually only raised £1 million! As the only Scottish crowdfunding platform, this is frustrating because we know we can help businesses with funding and so much more.
Why aren’t more people taking advantage? Well, we think that people don’t really understand all the opportunities that crowdfunding can bring. So we’ve written this blog to address some common misconceptions and issues, and encourage more of you to give it a go!
Crowdfunding is new and untested
False. Crowdfunding has been around for centuries – we just didn’t call it crowdfunding. Remember the Darien scheme in the 1600s that you were taught about in History? That’s the earliest example of crowdfunding. Trafalgar Square was ‘funded by public subscription’ – that’s crowdfunding too. Plus the success of crowdfunding in America has proven that this new funding model is revolutionising the finance industry. We just need Scotland to get on board and join the revolution!
Crowdfunding is too complicated
There are three different types of crowdfunding, which might be confusing people. There is crowdinvesting, where you sell shares or parts of shares to lots of small investors who require a financial return, there is crowdlending, simply a peer to peer loan which you need to pay back, and there’s real crowdfunding – which is what we do. This means you simply offer rewards or perks in return for money, and you don’t need to pay the money back. Deciding which type of crowdfunding is right for you is an important decision, but we would recommend using real crowdfunding if you’re in the early stages of your business or project, as there are no financial obligations involved.
Crowdfunding takes too much time and energy
This is an important point – a crowdfunding campaign does need a lot of attention to be successful, but it will be well worth it! Mhairi from Bonnie Bling, and Polly from Cake Cetera both devoted time every day to their crowdfunding campaign and were both successful. Where are they now? Well Mhairi has been able to go into her business full time, and has enjoyed massive successes with loads of media coverage and celebrities wearing her cool acrylic jewellery. Polly went on to secure a national deal to deliver her gorgeous cupcake bouquets and has recently been awarded £50,000 to grow her business. So yes, be prepared for an intense campaign, but you’ll reap the rewards if you work hard.
I don’t want to ask for money
This is a cultural problem, and one we all share. We just don’t like asking for help. So what’s our advice? Learn to ask! Everyone has had a helping hand at some point, and they know how hard it can be starting out. Plus your backers aren’t donating, they are getting a cool reward in return for their money and the knowledge that they helped start a great project. Stop thinking of crowdfunding as charity, and start seeing it as a real opportunity to raise funds, build an engaged community and prove your idea.
We hope this blog has cleared up some of the issues around crowdfunding, and maybe even got you thinking about starting your own project. If you have any other questions feel free to #askbloom on Twitter or email firstname.lastname@example.org
We’re here to help you every step of the way so get in touch, start a project and chase your dreams!
(Image courtesy of consultcormack.com)