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5 Reasons you should crowdfund in 2019

26 February 2019 No Comment

By John Auckland, Tribe First

We’ve said goodbye to 2018 and after celebrating on New Year’s Eve, we’ve felt just optimistic enough to make ambitious resolutions, though experience tells us they are likely to be forgotten within a few short weeks. Rather than recommending you neglect Netflix in favour of a gym membership or give up your favourite tipple for kale smoothies, I’ll give you something better: five reasons that show why 2019 is the year your business should use crowdfunding.

 Fundraising via crowdfunding rather than banks is seen as more viable option for entrepreneurs

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.

 

More funds each year are being brought in by crowdfunding

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 UK is the best place to crowdfund in Europe

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.

 

Crowdfunding can help grow and engage 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.

Starting a new journey into 2019, there are many choices for you to enable to you to boost your entrepreneurial credentials and develop your business. With the funds your business needs at your disposal it can be a year of great success!

About the Author

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.

Links

Website: https://www.tribefirst.co.uk/

Facebook: https://www.facebook.com/TribeFirstCrowdfunding/

Twitter: https://twitter.com/Tribe1st

Instagram: https://www.instagram.com/tribefirstcrowdfunding/

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