The Glasgow Chambers of Commerce recognised the emerging trend of businesses turning to the crowd for funding and wanted to know what the scene was like in Scotland.
At the end of June 2013 the GCC received the hotly awaited report by Twintangibles detailing the crowdfunding market in Scotland.
What was a little surprising was the massive under-utilisation of Crowdfunding in Scotland. In the UK, crowdfunding was worth £200m and so if you were to take 8% of that- as Scotland is 8% of the UK population- you would expect to see about £16m being raised. However there is less than £1m being funded this way. In looking for reasons of this Twintangibles left this open to speculation.
Why aren’t there more platforms and money being raised in Scotland?
Well Scotland is starting its own platform crowd. We have the recently released SquareKnot that is a really flexible platform allowing businesses to choose between a combination of equity,reward based and peer to peer crowdfunding. Then there is reward platform Bloom VC which launched back in 2011 just after our own platform launch (please click here to read further). Next month will see the launch of ShareIn, an equity-based platform based in Edinburgh focusing on tech and bio-tech.
If we look across the water to the more high profile campaigns by Obama, Veronica Mars, Zach Braffs and Smosh they have allowed crowdfunding to become more commonplace in America. Whereas in Scotland the highest profile campaign we have is BrewDog and their excellent Equity for Punks campaign -although strictly speaking that was a public IPO.
It will be interesting to watch out for further research in this area as it could be a number of things- Are Scots just wary? Do we have smaller disposable incomes in the first place? Have they not come across a campaign that moved them? Is it a cultural thing that we’re a bit more reluctant to donate to business?
There are many possible reasons it could be but crowdfunding seems here to stay and as many organisations that hand out grants are looking for innovative ways to fund raise and banks can see it as proving a product or venture has real consumer potential, small businesses need to start getting in touch with the motivations of their customers or else they will be missing out on some serious cash.
This is a great Ted talk by Brian Solis – who you might remember from a previous post on the Conversation Prism. It looks at how technology, in particular social media is affecting capitalism and suggests a Generation C. What’s your relationship with customers like? He advocates that business is not so much business to consumer or business to business but people to people.
Our friends who make fabulously nutritious pizzas have asked for our help with an idea of theirs. They desperately need a new van to keep up with demand at events for their pizza’s and to be able to go to new events. They thought crowdfunding would be a great way to help them reach their goals, so we have helped them prepare everything that they will need prior to their launch last week.
Whilst they have featured in the TV series The Entrepreneurs, that showed the ups and downs of getting their product to the wider market, and won many awards such as The Scottish EDGE, Best New Product and have also been acknowledged as a business with the highest impact, yet they still face tough challenges. As their blog shows they have had a particularly bumpy ride with their past sampling vans.
Like any crowdfund, there are several challenges faced and the key here is ensuring the tone of voice is appropriate. This is a highly visible start-up and they have their products in several supermarkets. However, they are still a start-up, and finding smaller amounts of funds for new projects is a massive challenge. Remember Nucoco? We crowdfunded £12,000 for their branding and packaging for the same reasons.
SoLoCo have helped with their campaign strategy, rewards and social media strategy up until the launch. Eat Balanced have taken it on from there, and I think they have hit exactly the right tone of voice, producing fun imagery to show what the funds can buy. It won’t be easy, but it is one to watch. I wish them well!
If you would like to support them and get your name on their new van – or spend a day with the Eat Balanced team and Professor Lean tasting pizzas, click here.
What’s under your feet? Could you be living above an undiscovered Roman settlement?
Archaeology Scotland are celebrating an important time in their calendar- Scottish Archaeology Month- and to kick it off they are planing a dig of national significance. The residents of Fairmilehead are being asked to explore a square metre of their gardens to dig for evidence of Roman habitation. Due to conflicting historical maps a group of archaeologists believe that a temporary Roman Settlement could have set up camp in this area. These findings would fill in the missing piece of a trail of roman settlements found across lowland Scotland.
The dig is mostly funded by the Heritage Lottery Fund but for Archaeology Scotland to really do everything they want for the weekend they need to raise an additional £1500. SoLoCo is helping by giving them the tools and knowledge they will need to engage with their existing membership as well as by reaching out to new members to explore community archaeology; skilling up people interested in the past with the know-how to find hidden treasures in their own back garden, without needing a huge team of archaeologists behind them.
Contributors to the Roman Quest weekend will be taught how to dig and identify remains, they will also be invited to the end of weekend party and will get the chance to see what has been discovered and what those findings mean. And for those who fund £150 they can participate in a private dig with a Roman historian at their side.
The more households who can participate, the more information they can gather for the archaeologists and historians. If you live in that area, or know someone who does and want to join in then please contact Dianne Laing at Archaeology Scotland.
If you would like to contribute to the fund and join the after dig party, just click here!
Last month saw FirstPort’s Founders Fund successfully complete a crowdfund raising £4235, which was £1235 over their target. So, how did they do it?
SoLoCo helped them to work out their messaging, campaign strategy, social media strategy and appropriate platform to raise funds for the ‘Barry Ayre Award’, an award won by social enterprise City of Play.
The £3,000 target was to celebrate the achievements of the outgoing Chair and Founder of First Port, Barry Ayre as well as those of social entrepreneurs who FirstPort have supported over the years.
So this is what we did.
- Helped to Create a Network Asset Map of all the social enterprises supported by FirstPort as well as other social enterprise network organisations in Scotland.
- Identified the appropriate messaging based on the SoLoCo crowdfunding pillars: reputation, branding, social media engagement, networks, geography and hook.
- Identified relevant rewards
- Identified the appropriate platform – in this case buzzbnk.
Challenges and our solution.
Having identified the networks and how to communicate with them, we wanted to work on a strategy that counteracted the ‘big dip’, the time half way through a crowdfund where activity tends to ease off. The aim is to find something that will re-energise the campaign; you want to attract new audiences without boring those who funded you in the early stages and you really want to keep the momentum going.
Because the crowdfund was for an award, we announced the shortlist two weeks before the end, and those who donated could also vote for who they wanted to win, which meant that the friends and families of the shortlisted entrepreneurs wanted to join in and share the crowdfund too.
- Really work on your network Asset Map. Are there people who you know you can call on to donate on Day 1. There is nothing worse than seeing a crowdfund with no money in it’s first week.
- Work out what your hook is – why will people want to stick their hands in their pocket for you?
- Make sure your rewards are relevant to your campaign. T-shirts and wristbands may be easy to organise, but is it really something that your target market wants?
- What can you do half way through the crowdfund to revitalise the campaign, bring in a new audience? (if you’re bored, so are your followers!)
- Ask around from other people who’ve crowdfunded – what is the customer service, technology been like to use?
If you have an idea and would like some help to crowdfund it contact us here