2019: The Year to Crowdfund Your Business - Technologgie (2024)

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By John Auckland, Tribe First

After the fun of celebrating the start of another brand new year, we feel just enough optimism to make ambitious New Year’s resolutions. Experience tells us that, although we mean well, these are often abandoned by early February. I won’t tell you to give up your Netflix subscription and swap to a gym membership or to exchange your weekend drinks for the latest fashionable smoothies. What I will do is to share the key reasons why 2019 is the year you should crowdfund your business.

Crowdfunding Is Regarded as a More Viable Fundraising Option Than Banks

While many might assume that banks are the go-to for business funding, this option now falls behind crowdfunding amongst entrepreneurs, according to EY’s 2018 Fast Growth Tracker.

EY’s poll of 380 UK business owners showed that while venture capital fundraising came out on top, 20 percent of entrepreneurs view crowdfunding as the most viable fundraising strategy for their businesses – a higher proportion than the 19 per cent who chose bank financing.

Crowdfunding Campaigns Are Bringing in Increasing Funds Every Year

The transaction value of UK crowdfunding campaigns shot up by 12.6 per cent to £58.2 million in 2018, according to Statistica. In 2019, the increase is projected to be even larger, at £66.4 million – a 14.1 per cent growth on 2018.

This growth trend is projected to continue year-on-year to at least 2023.

The Best Place to Crowdfund in Europe? the UK

According to research from the University of Cambridge’s Judge Business School, the UK is leading the way when it comes to crowdfunding and peer-to-peer lending.

While the UK’s £4.9bn alternative finance market is the largest in Europe, the European market is still growing remarkably fast. So for early and growth stage businesses, there are huge opportunities right across the continent.

Crowdfunding ‘Will Be Worth More Than Any One Charity in 2019’

The income generated by crowdfunding will be worth more than any single charity by 2019, according to JustGiving’s CMO, Charles Wells.

Wells put this prediction down to the fact that crowdfunding platforms are attracting swathes of young people – a key demographic that charities struggle to engage.

I know from experience that crowdfunding attracts many young tech-savvy entrepreneurs with fresh, innovative and disruptive businesses ideas. It also draws in a new generation of young investors who are accustomed to using technology to connect with others, sniff out opportunities, and make their fortunes.

Growing and Engaging Your Customer Community Base

New investors are likely to become customers, particularly if you offer discounts or exclusive products and services during your campaign. These new customers are also likely to be your most loyal and vocal supporters who will sing your praises and challenge your critics online.

Crowdfunding campaigns also offer a unique opportunity for your business to run a dedicated marketing and communications campaign. It’s the only period in your company’s lifetime that every pound you spend and every media spot you gain contributes to bringing in new customers and investors, which effectively doubles the reward of your efforts.

To make sure you get the most out of the opportunity, it’s really worth recruiting a seasoned PR professional to lead the media push.

Each campaign you run raises your profile amongst a constantly growing crowd, puts your business and idea through an important vetting process, and brings you valuable feedback that, if implemented, can help your company thrive.

There are many, many possible ways for you to develop your business as well as growing your business’s tribe of loyal supporters. In the process you’ll also be increasing your entrepreneurial credentials. As 2019 gets going take the opportunity that crowdfunding offers. The year ahead can be a good one!

John Auckland is a crowdfunding specialist and founder of TribeFirst, a global equity crowdfunding communications agency that has helped raise in excess of £14m for over 45 companies on platforms such as Crowdcube, Seedrs, and Seedinvest – with a greater than 90% success rate. TribeFirst is the world’s first dedicated marketing communications agency to support equity crowdfunding campaigns. John is also Virgin StartUp’s crowdfunding trainer and consultant, helping them to run branded workshops, webinars and programmes on crowdfunding.

In February, John is running a series of global crowdfunding bootcamps alongside Grant Thortnton – who support businesses seeking early-stage funding – and leading equity crowdfunding platform, Crowdcube. The bootcamps aim to help entrepreneurs prepare to raise money via equity crowdfunding in just five weeks.