Why do you think the Crowdcube fundraise was such a huge success?
In short we followed our own advice - the advice we give to our project owners every day when they want to launch projects on our site. We really built our 'crowd' in advance of opening the investment to the public and had a military style PR and marketing plan which we worked on for two months before we went live.
What will the raised funds be used for?
The funds will be used to help people turn more great ideas into reality. We will focus on key areas: meeting the demands from national and regional fund distributers alongside growing and building our partnership base. There will be a dramatic increase in our network of agents and supporters, allowing us to work with our growing backlog of projects.
How much money has been pledged through the Crowdfunder platform?
To date we have raised over £1.5m and it’s rising steadily.
How does rewards-based crowdfunding fit into the alternative finance ecosystem (i.e. alongside equity and debt-based models)? Why is it important?
There are very clear boundaries that set rewards-based crowdfunding apart from other providers. We enable project owners to raise funds themselves using rewards as opposed to “owned equity” that many start-ups, charities and communities just don’t have access to.
Who can use the Crowdfunder platform?
The industry has grown by 388% in 2013 alone as reported by the innovation charity Nesta, and we estimate that rewards-based crowdfunding will make up £360m of the industry in the UK by 2016. We see a growing number of small businesses using reward–based crowdfunding to get going. Many of these will progress to equity-based crowdfunding in the future to further expand their great ideas.
Crowdfunder is leading the way in UK-based rewards-crowdfunding. Does the platform have overseas ambitions?
We are global in the sense that anyone from any country can upload a project on the Crowdfunder site and we have had some brilliant projects from people wishing to raise funds for charity and social work abroad. But we are very UK focused at this point in our development; we have no immediate plans to expand out of the UK at this time as there is still much work to be done here.
How do you see the nascent crowdfunding industry developing over the next few years?
The market for fund distribution is large with major players including NESTA, The National Lottery, Sport England and The FA distributing an estimated £1.97 billion in 2012/13 alone. In addition, LEPs, Local Authorities, Universities and charities have access to large amounts of funding targeted at stimulating economic development and community support.
We believe as organisations are placed under more pressure to deliver funding efficiently to the 'grassroots', they will look for credible, mass distribution channels. Crowdfunding offers a way to validate projects and amplify funding online using the general public and so offers a highly effective distribution channel for enterprise and charitable funding.
The stats show the speed at which the industry is growing. Crowdfunder alone has seen a growth factor of x15 in the last twelve months. The rise of awareness and the sharing of the incredible achievements of our project owners assisted by validated fund distribution will mean that what is now an emerging industry will become increasingly viewed as the first step for many seeking alternative finance.
