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Moving from Reward success to Equity – An interview with Derek O’Sullivan of Thermo Tent

Moving from Reward success to Equity – An interview with Derek O’Sullivan of Thermo Tent

A few months ago we interviewed Derek O’Sullivan of Thermo Tent prior to their launch of a Kickstarter crowdfunding campaign. Derek promised to return and tell us how it went and what he learned.

Good to his word we caught up with Derek after a successful campaign to raise 50,000 Euro. He tells us what went well, what advantages he has found from the campaign success and he shares with us the news that they now plan to run an equity crowdfund on the Seedrs platform

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Find out more about Thermo Tent at ThermoTent

The incidental music used in the podcast is
“Beach Bum” Kevin MacLeod (
Licensed under Creative Commons: By Attribution 3.0

Low Transaction Costs & Declining Barriers to Participation

In the first of our series on the principles of crowdfunding we explored the ideas of the Long Tail and the atomization of sums raised. We continue on with part two of the series this time looking at the role and imperative of Low Transactions costs and the declining barriers to participation that are so central to how crowdfunding works.

Low Transaction costs

For the Long Tail to be an effective operational model the incremental cost of each transaction must be low enough to ensure that the sums raised are not consumed by aggregating costs as well. The online e-commerce world has achieved this by reducing retail space costs by removing the need for a bricks and mortar presence. Selling on line and distributing from huge logistics bases has driven down the costs of each transaction markedly. In the crowdfunding environment the same effect is delivered by platforms which take the pain out of establishing the necessary logistical and processing architecture to run a campaign and, in so doing, making it possible and economically sustainable to keep the costs of collecting each donation or investment very low.


It is for this reason that over burdensome regulation and legislation is such a potential problem for crowdfunding. The higher the regulatory burden for a platform the higher the costs they will, inevitably, have to pass on to their users. This in turn will mean that crowdfunders will increase their targets in order to cover the cost of the campaign and, by extension, drive down success rates. Oddly, from a regulator’s point of view, it may well prove counter productive by driving more projects to run unregulated DIY campaigns to maximise returns and so ultimately undoing and undermining what they might be setting out to do.

Declining Barriers to Participation

One of the principal benefits of the online world and Web 2.0 in particular is the idea of declining barriers to participation. It is ever easier for people to become active, engaged participants online. This might be buying or selling, starting business, expressing views or any number of activities that were once more problematic and challenging to undertake. Crowdfunding is a beneficiary of this and you might imagine that for the Long Tail to work well that ability of large numbers of people to get involved is key. It must be easy for people to find, engage with and share a crowdfunding campaign. A key reason for expanding participation in a crowdfunding context is to ensure that the flow of new previously unavailable funds are unlocked for use in this market place.
So not only is the general principle of low and the declining barriers important to provide the resources to support the crowdfunding sector in general, you need to employ the same principle at a project level by offering rewards or investment opportunities that are low enough to make it a simple and low risk decision to engage. The more people that can get involved the more you can raise and the greater diversity of insights skills and expertise that are on offer.

How to run a crowdfunded Community Share issue

If you want to know how to run a crowdfunded Community Share issue what better way than to hear from someone who has done it?

In this episode we speak to Jamie Veitch who was an important participant in the Sheffield Live crowdfunding campaign. This project raised £165,000 through a Community Share issue which is a specific and increasingly popular type of crowdfunding.

Jamie tells us why they chose this approach and some of the challenges and benefits with running this type of campaign.

The campaign was to raise funds for the existing community radio station to move into the TV realm.

You can find out more about Sheffield Live here and you can find out more about Jamie Veitch here.

The incidental music used in the podcast is
“Beach Bum” Kevin MacLeod (
Licensed under Creative Commons: By Attribution 3.0

Costing a Crowdfunding Campaign

Costing a Crowdfunding Campaign

One of the most common errors in a crowdfunding campaign plan is to miscalculate the cost involved. Getting this wrong can be a major problem because even a successful campaign may not provide you with the funds you need.

There is a reason why our crowdfunding preparation, due diligence and audit process – commonly referred to as TAMP – begins with Targets. One of the key Targets we want to know is “How much do you want to raise?” This is hardly surprising but in our experience the number stated is often either vague or even wrong. Vague is not a crime or even bad as long as you know its vague and not settled yet. Being wrong and discovering it early enough is also not a problem as this can be rectified.

But being wrong and not realising it and running a campaign on a false premise can be a real problem because you might run a successful campaign and then discover all that hard work has not provided you with enough cash to do what it is you have said you are going to do or to pay all the bills associated with your campaign. Don’t fall into the trap of overlooking costs.

Of course the purpose of the TAMP process is to resolve these types of challenges  but we can’t be with all of you helping out, much as we would like to,  so here is a quick guide to the things which often get forgotten.

The purpose of the TAMP process is to resolve these types of challenges

Depending on the type of crowdfunding methodology you are planning to use from donation to equity, each may have greater or lesser relevance to you – but at least you can prompt yourself as you go down the list.I have grouped them very roughly to help you think about some of the key areas costs are incurred.

Producing rewards can be costly especially if they are physical items. Materials and time can actually knock a hole in any money raised if this hasn’t been costed in. The piece that is often forgotten over an above the cost of hand embroidering someone’s name into a tee shirt or something similar, is the fulfillment cost. Package and posting can be ruinously costly – do not forget this.

If your campaign is to launch a new product to the market and the reward IS the product but you have yet to take it to manufacture DO NOT assume Alibaba and a Chinese manufacturer will “just be able to do it”. Think  again. Manufacture can be extremely complex, particularly for an innovation. It can take time and several tries to get it right. Specialist tooling is incredibly expensive in the short term. Knowing this is one thing but getting a proper professional assessment of this is very important. there are many really good providers out there that will fabricate a mock up for you and look at the wrinkles in the process. Get that supply chain and the costs associated with it nailed.

Transaction Costs
Platform costs are generally reasonably well understood with most people figuring this out even if there is considerable variation out there amongst the many hundreds of platforms. But watch out for small print and unexpected costs. As Tom Waits would have it – “The large print giveth, the small print taketh away.”

Settlement and payment can be costly depending on who you use and who you bank with. Currency fluctuation issues can also be tricky if you are operating across several countries.

TAX – the recent VAT changes on digital product is Europe DO APPLY to crowdfunding and to digital rewards even if you are NOT VAT registered. This can turn into a big overhead. Also – in the UK – the taxman says your crowdfunding campaign is part of your revenue – they can, and will, tax it.

If you are planning a DIY campaign – it might lower some platform costs but it is rarely free or costless. What extra software might you need to integrate and display a campaign, process your transaction and keep your website safe from hackers?

Professional Services
Some folks do need professional services, so don’t know that they do, and some don’t need them. Recognising you might need some of these more specialist things done is the first step. Then ask “Who will or can do it?” If not you or part of your team it is likely to cost you.

Here are a few examples of what you might face:

  • Who is your lawyer? If you are planning an equity campaign DO NOT leave home without one.
  • Due diligence – getting all those contracts verified and checked to reassure nervous and suspicious  investors can take a lot of time, and specialist review. So “What terms do you have with your suppliers?” for example or “Who does own that property you have?”
  • Intellectual Property – should you protect it and if so how? Are your breaching anyone the IP of someone else? This type of specialist service is not free, and when it comes to protecting IP it can be VERY expensive.
  • Who shoots and edits that fabulous video? Maybe you, maybe not?
  • Who does the photography of your superb new product mock up, and of you and for all the other PR and marketing type activity you will do?
  • Who checks or even writes that compelling copy and PR and who runs that A&B testing campaign to check your messaging?
  • Who will tidy up your books to a level that you can convince a lender or investor to splash the cash? Who will write that business plan?
  • Do you need a better team? Do you need a new Business Development Manager for example to convince the investors? Recruiters and headhunters, in large part, don’t work for free.

Opportunity costs
Whilst you are running this campaign who is running your business?

Who does the day job? How much will it cost in staff time and what is the potential knock on on your business? Will you still be earning money whilst you prosecute your crowdfunding campaign? If not then what will that do to your cash flow?

Now this is not an exhaustive list . Nor is this intended to say “Don’t Do It!!!” Far from it. It is intended to make you think about what might have slipped your mind till now and it says do it well, do it properly, and do it with your eyes open.

Reassess your crowdfunding target now and ask yourself – is it accurate and is it enough?


Why not tell us what unexpected costs you encountered in your campaign?



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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