Rebecca Cooke, Trillion Fund
Technology moves fast. Just a few of years ago crowdfunding would have been a term that only fintech enthusiasts and start-up ventures would have been very familiar with. But what a difference a couple of years can make. Far from a niche subcategory of alternative finance, crowdfunding is now a real heavyweight contender and a threat to traditional finance and lending institutions. From generating capital to boost business ideas, make feature films and even restructuring the UK's energy mix, crowdfunding really is changing the finance sector.
At Trillion Fund we believe that crowdfunding is the key to creating people powered profits and giving communities ownership of their clean energy supply. But revolutionising the energy mix is no easy feat and navigating the corners of the internet to stand out and find your perfect crowdfunding partners in the public requires commitment, discipline and more than a little publicity.
But there are certain rules to follow which can and things to avoid to give your crowdfund a better chance at success.
One of the most common pitfalls of crowdfuning campaigns is the terminology of the raise. The golden rule to follow here is: don't ask people to donate to your campaign. The beauty of crowdfunding, it's USP, is that it really does give as good as it gets. People who invest in crowdfunding projects generally enjoy better returns than in an ISA or a pension fund and they have the bonus of being able to see the transparency in what their money is doing. A donation sounds charitable and implies that your potential investors are donating for a cause rather than for mutual financial, environmental or otherwise benefit. Never forget to remind your crowdfunding base that their investment is an investment for that will benefit themselves as much as the project.
Perhaps the most important part of a crowdfund is what happens before it goes live before even a single investment pledge is made, the planing, the pitching and the putting together of the campaign. The rule to take note of here is that the most important part of crowdfunding is the crowd. Knowing who exactly your target audience and potential investors are is key to offering them the chance to invest in something they are interested in. The beauty of crowdfunding for renewable energy is that it touches the lives of pretty much every person in the country and certainly every community. The same can be said for social impact investing. Identifying what changes people want to see in the world and in their lives and then offering them the chance to be a part of that change is a way to make change a fantastic returns tangible.
The best way to give the crowd a crowdfund they want is by finding a deep niche and finding your crowd within that niche. Ideally, crowdfunding works best when as many people as possible are compelled by a cause to pledge as much as they can, which is why Trillion Fund offers the opportunity to invest in a crowdfund from as little as £50. This means it can be tempting to go as broad and general with your campaign as possible. But do not be general about who you are targeting with your crowdfund.
The most successful campaigns also need large capital investors to invest and generate buzz around the campaign. Nothing is quite as exciting as seeing a raise edging ever closer to its target and almost universally, the closer a raise gets to clinching it's minimum raise, the faster the pledges pour in. But the final thing to remember here is not to give up on your push for publicity. Keeping the hype is essential to sealing the deal and getting the crowdfunding success that so many campaigns miss out on. Even if you are just £100 away from the closing of a million pound raise, make sure you get the word out to as many people as possible who may be interested.
Although no crowdfund is guaranteed to succeed, with enough traction and trepidation, real change and real money can be generated by you: the crowd.