5 reasons for crowdfunding in the year ahead

January 31, 2019

Another New Year’s party, and another period of making optimistic resolutions.  We really, really mean to stick to them but (if we’re being honest with ourselves) they are likely to be ditched by the time we get to February. Rather than recommending you give up Netflix and get a gym membership or swap your weekend (and evening) drinks for the most vitamin-packed smoothies, I’d rather give you five reasons why 2019 is the year you should use crowdfunding for your business.

Crowdfunding is seen as a more viable fundraising option than banks 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.

https://www.ey.com/uk/en/services/specialty-services/ey-tmt-hub-services-fast-growth-the-ey-fast-growth-tracker

Crowdfunding campaigns are bringing in more and more funds each 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% growth on 2018.

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

https://www.statista.com/outlook/335/156/crowdfunding/united-kingdom?currency=gbp#market-revenue

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.

https://www.jbs.cam.ac.uk/fileadmin/user_upload/research/centres/alternative-finance/downloads/2018-ccaf-exp-horizons.pdf

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.

https://www.thirdsector.co.uk/crowdfunding-worth-one-charity-2019-says-charles-wells/fundraising/article/1433419

Crowdfunding is a great way to 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.

A new year opens up many possibilities for you and your business. Crowdfunding in 2019 can help you develop your company, grow your loyal tribe of supporters and give a boost to your credentials as an entrepreneur. All best wishes for a phenomenal 2019!

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.

 

 

Links

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

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