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When is a Crowd not a Crowd?

I was speaking at an event recently, sharing the platform with an angel investor and discussing the relative merits of the many sources of funding and backing available to entrepreneurs. My position, as you might expect, was to set out the specific and unique benefits of crowdfunding as a source of funding. In describing the Long Tail model and the characteristics of the crowd as a source of insight and validation I wanted to convey how the crowd is the source of the additional value by virtue of its distinctive qualities.

But I failed.

I know that I failed as my Angel colleague, who spoke after me, went on to emphasise that Angel deals can have a large number of participants and are therefore “a form of crowdfunding”.

Well not all crowds are equal and so, sadly, my Angel was wrong and here is why.

Size matters in certain circumstances of course, but it not just a numbers game. The key aspect which makes the crowd so valuable is diversity. This encompasses a diversity of insight, expectation, motivation, location and pretty much any other characteristic you could imagine. This is the key.

A crowd of Angels is unlikely to bring that breadth. In terms of their expectation of return, the metrics of assessment, perception of risk, the perspective of the opportunity are likely to be relatively common. I would hesitate to accuse it of “group think” or clones but the truth is it isn’t a crowd in the sense that we use it in describing a crowd in crowdfunding.

In the same way many “crowdfunding” platforms are not really crowdfunding platforms, they just describe themselves that way for the opportunistic benefit of being associated with a relatively high profile topic. If the platform does not welcome and embrace the crowd in all that it does then it is not crowdfunding and the projects will not receive the full benefit available via crowdfunding.

Is this important? Yes it is. The promise of crowdfunding is not that it is just another source of the same old money. The promise of crowdfunding is that it is different money, better money, and that it comes with many additional benefits. As I explain in my forth coming book “Crowdfunding To Win”, and in the recently launched Udemy course of the same name, to really see the full benefit in crowdfunding, to truly win at it, it is important that you both understand these unique benefits and target them as appropriate as part of a campaigns targets and that the funding needs to be flexible, responsive and, in some cases, subordinate to those wider aims.


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