The leading Crowdfunding consultancy

Alternative Finance Is Coming of Age

Alternative Finance is coming of age and becoming mainstream in the UK as Governments begin to actively embrace and legislate for its effective use.

Earlier this month we had the privilege of organising a Parliamentary Reception at Holyrood entitled “Crowdfunding in Scotland – The Way Forward”

Hosted and initiated by Chic Brodie MSP the event brought together a wide range of interested and engaged parties alongside Parliamentarians exploring the opportunity presented by crowdfunding. It was great to see real interest and leadership at a Governmental level exploring and recognising that crowdfunding represents a real change in the way businesses and organisations across all sectors can find novel approaches to funding, and recognising this is more than a passing fad. The assembled participants heard stories of active and successful use of crowdfunding from a number of perspectives. This included Stuart Patrick CEO of the Glasgow Chamber of Commerce and their engagement with Funding Circle to help Glasgow business. Kevin Miller of RunRev who have recently closed a second crowdfunding round this time a DIY campaign for £250,000, explained why crowdfunding works for them. Warren Bader of Plan Bee who have successfully run a an overfunded round on Crowdcube set out the importance of this type of funding for such an innovative startup, and Neil Simpson if Brewdog revisiting their extraordinary successful fourth equity raise.

On the same day the Chancellor, George Osborne made further announcements that underpins the UK Government’s support for FinTech and alternative finance in particular. One of the key points was the promise to introduce legislation that mandates that Banks who turn down a business loan application will become obliged to offer to pass their details onto alternative finance providers. This builds upon the existing Alternative Business Funding website that provides a simple traffic light approach to assess the high level suitability of an firm to alternative finance.

All this is demonstrating a growing maturity in the alternative finance sector and how it is increasingly important for businesses, and all the groups and services that deal with them, to understand what is on offer. Our expertise in crowdfunding has already proven invaluable to many organisations wanting to understand, use, engage and succeed with crowdfunding.

We will continue to offer the sort of unbiased and balanced advice to clients from all areas as the sector progressively innovates and develops.
So, alternative finance is rapidly becoming part of the mainstream and part of your finance mix, do you know enough to maximise this opportunity? If not then be sure to contact us.

Scottish Crowdfunding Ending 2013 on a Positive Note

The closing months of 2013 seemed to demonstrate something of an up tick in the levels of interest in crowdfunding in Scotland.

East Fife football club launched a campaign for £100,000 to develop a new stand and other facilities at the club.

A second equity platform, ShareIn, launched in Scotland. Brewdog have pursued a further funding round in their own inimitable style closing in on a £4.25 million investment through their Equity for Punks scheme.

The  MacAulay & Co show show on BBC Radio Scotland  invited me on to speak about the phenomenon of crowdfunding – and you can hear that here if you missed it.

The first successful Scottish equity crowdfunding round on Crowdcube  completed as NewGalexy hit and exceeded their target – having sought some £100,000 for 10% of equity and reaching £200,000 for 20%

The Scottish Parliament took a real interest in crowdfunding as part of an investigation by the Economy, Tourism and Energy Committee began and investigation of the alternative funding sector. We were privileged to be asked to give evidence to the committee and if you missed that session you can see it here.

It is particularly pleasing to see the political classes recognising the potential of the democratising of capital to bring about positive change, entrepreneurial dynamism, and direct engagement of the people with shaping their financial future

And all that is a year when the first Scottish hybrid equity platform Squareknot launched and we released the ground breaking Crowdfunding the Scottish Perspective report – commissioned by the Glasgow Chamber of Commerce. Whilst the report demonstrated that Scotland was under using the resource and opportunity of crowdfunding perhaps this flurry of events late in the year might indicate some positive developments to address that.
What does it promise for 2014? Well we hope only good things. But one thing for certain is that whatever does happen you will find the best commentary, coverage and insight on crowdfunding and the crowd empowered economy and society here at twintangibles.

Preparation is the key to crowdfunding success – the RunRev story

On Tuesday I was in Edinburgh to attend the RunRev crowdfunding seminar where Kevin Miller, CEO of RunRev, went through in detail the steps involved with their successful campaign to raise £493,000 in 30 days on Kickstarter.

The successful RunRev campaign is a case study in our recently published report Crowdfunding – The Scottish Perspective (a work commissioned by the Glasgow Chamber of Commerce), and it is a terrific tale of the art of the possible with crowdfunding. Not only was a significant sum raised in just 30 days – at the time the UK’s largest technology fund on Kickstarter – but it speaks directly to the transformative power of crowdfunding by empowering RunRev to develop an entirely new business model, to take their product open source, and to take so many of their passionate fans on that journey with them.

Key to their success, as with most crowdfunding campaigns, was the level of preparation and analysis that the team at RunRev did before even thinking about starting their campaign in earnest, and Kevin shared a good deal of the detail of that in his presentation.

In our workshops and client engagements we use the TAMP process to help people prepare a crowdfunding campaign.

It is a logical sequence of steps that guide you through the often complex process of considering and preparing for a crowdfunding campaign. It prompts you to address the key questions in the optimum sequence so as to have you in the best shape to run a successful campaign. And this is important. Far too many campaigns fail and too often we hear about those that don’t prepare and are surprised and desperate to resurrect a failing project that is already running. Generally it’s too late.

The old maxim that “failure to prepare is preparing for failure” has seldom been more apposite than in the context of a crowdfunding campaign.

The TAMP process is an acronym standing for Targets, Audit, Method, Plan/Preparation

In the Targets section we are considering things like the monetary targets you have and how firm accurate and realistic are they; when it needs to be available, how flexible is that timing; what is the outcome you are looking for, how does this fit in the strategic context or life stage of your firm? These things alone can throw up many interesting decision points and considerations which will radically inform later steps in the process.

Audit looks at the tangible and intangible resources that you can use for this campaign, which might include things skills, tools, social and relationship capital, time and physical assets that are available to you.

It’s only at this point that you consider making decisions on the best crowdfunding Methodology to use. So are you best suited at this time to equity, reward, loan or what? This is not just a function of personal preference it is based on the output of the previous steps. If you have a preference to one methodology but the first two steps suggest you are not suited to it then it may be possible to work backwards to develop a plan to adjust the targets or develop alternative and further assets from those identified in the audit. Of course time constraints set out in the target section might make that challenging, but that is all part of the mix. All of these things are factored in to the process before you start to pull it all together to prepare and plan.

The Planning/Preparation phase includes steps like evaluation of other similar projects, developing key messages, testing and seeking feedback, communication plans, team development, identifying key influencers, video production, finance preparation, consultation. In fact there is a very long list of steps developed from what has been learned from the earlier stages of the process.

The final execution of the campaign once it is live however is down to you!

RunRev’s experience demonstrates how great preparation and great execution can deliver tremendous results. Kevin and his team will be running a similar event in Glasgow on Tuesday the 3rd of September and if you would like to attend to hear more about their story please contact Mildred Foo to register your interest. If it’s anything like the Edinburgh event I expect a good turn out.

If you want help with preparing for your crowdfunding campaign or expert guidance through the TAMP process, or to attend one of our workshops please contact us.

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