Now is the best time there has ever been to be an entrepreneur starting or growing a business. In 2015 I wrote that crowdfunding will change the world, but the speed of its impact has surpassed even my expectations.
In the UK the biggest crowdfunding platform, CrowdCube, has raised more than £390m in equity investment to help businesses scale. £130m of that was in 2017 alone. Another UK platform, Seedrs, passed £300m of investment last year and has included companies from 8 European countries on its platform.
On a more global scale, rewards based crowdfunding platform Indiegogo (which we are proud investors in) is close to having generated an incredible $1.5bn for businesses and projects. That’s quite a crowd!
It’s incredible how this new format of fundraising has helped so many businesses find the cash and support they need. Many of these entrepreneurs would have ended up trying to persuade a bank manager to loan them the cash, and I know from experience how difficult that can be. We spent many hours at Virgin pleading with banks to extend our overdraft and to loan us more cash to continue to grow companies like Virgin Records and Virgin Atlantic.
Had crowdfunding been around when we were launching Virgin businesses in the early days, we definitely would have made use of it. In fact, the first ever (unofficial) Virgin Atlantic flight was actually crowdfunded. It wasn’t a slick operation like the crowdfunding platforms around today, but it did the trick.
I was on my way to the British Virgin Islands and was stuck in Puerto Rico due to my flight being cancelled. I had a special someone waiting for me in the BVI so I borrowed a blackboard and write “Virgin Airlines” on top and “$39 one way to BVI” underneath. I went round all the passengers who were on the cancelled flight and managed to club enough together to hire my first plane. So Virgin Atlantic was born.
Crowdfunding is so much more than just raising money. It helps you to create a tribe of customers, ambassadors and super fans. It brings market validation, access to new investors, promotion and real time feedback.
However, publicly showcasing your business and calling for people you’ve never met to invest is still a challenge. A crowdfunding campaign isn’t as simple as creating a video, putting it on a website and watching the money roll in. As with any fundraising, you have to convince people to part with their cash and take a bet on you.
Plus a bad campaign can have more negative effects on your business than a simple rejection from a bank, as it’s in the public eye.
This is an issue that Virgin StartUp – the entrepreneurial hub of the Virgin brand - has been tackling. The team at Virgin StartUp has helped more than 2,500 entrepreneurs launch and grow businesses since 2013 and distributed over £30m worth of Start Up Loans in the process. They’re seeing many of these businesses who they helped to start need more funding in order to scale – with many turning to crowdfunding.
To give these start-ups the best possible chance of being successful they’ve launched CrowdBoost – a seven week accelerator for start-ups looking to scale through equity crowdfunding. This programme brings together experts to work with the companies on every element of their campaign; from understanding what investors are looking for in a pitch, to shooting the campaign video and how best to set the company valuation.
The great news is this accelerator currently has a 100 per cent success rate with every start-up to launch a campaign after attending being overfunded. You can see their pitches below:
- Capsicana - Latin American street food sauces: raised £222,790
- Opitat - ethical skincare brand made from recycled coffee beans: raised £217,500
- Efoldi - a portable, foldable mobility scooter brand: raised £939,650
- Player Hunter - connect with footballers, scouts & clubs worldwide: raised £509,570
- Asap Water Crafts - electric motorised crafts for lifeguards: raised £280,260
- Stem And Glory – award winning vegan restaurant from Cambridge raised £616,170
- Future DJs - an education business with a large social impact for young people supplying professional visiting DJ and Music Production tutors: raised £538,380
It’s focused on helping businesses to scale and because of that the start-ups need to be looking to raise a minimum of £100,000. The programme is currently open for applications until August 11th. To find out more information head over to Virgin StartUp.