Crowdfunding is something that has become a bit of a phenomenon to date, with lots of interest in finding out more about how to use online platforms to directly raise project funding online. As part of Innovation in Giving, Nesta is supporting a range of web platforms focused specifically on crowdfunding. Alice Casey of Nesta who is developing the crowdfunding workstream is going to delve into these platforms a bit more by speaking directly with people who run them, to get their particular perspectives on crowdfunding.
First up is Nick Underhill of Keo Digital who leads the development team at Peoplefund.it.
Alice: Tell me about peoplefund – where did the idea come from?
Nick: The website was set up by KEO digital, a digital media company that pioneers community solutions to everyday problems. KEO digital was set up around the online community of River Cottage. It has upwards of 300,000 members who are all interested in food, gardening and an outdoor lifestyle.
In 2009 we set up a site called Landshare, which brings together people who have a passion for home-grown food, connecting those who have land to share with those who need land for cultivating food. Since its launch it has grown into a thriving community of over 70,000 people with some fantastic successes.
The next platform we launched was energyshare. This is a social network where you can connect with other people and community groups, find out how to generate your own renewable energy or support others to get a project off the ground.
As a result of these other projects we were confronted with a demand from people coming to us with their ideas. Rather than just pick one we decided to set up a platform that would allow ANYONE to set up their own projects. With Nesta’s support we built Peoplefund.it and have helped many groups start their own businesses and projects. We’ve learned pretty quickly that grass roots projects can lead to big things.
Alice: Why would people use crowdfunding instead of doing a regular fundraising drive?
Nick: Crowdfunding is a great way of raising money but it has many benefits over traditional sources of finance like banks and loans. First off it provides proof-of-concept. By offering people early access to your product or service you are in effect proving that there is a demand for it. Secondly it helps develop networks. When you become fully funded on Peoplefund.it you have access to all your backers, this can be invaluable when you’re starting a business to have a network to get your started.
Finally having a project online can really focus you to distil your idea into easy to read elements. On Peoplefund.it you need to make a video, offer rewards and describe your project. Just having these 3 things can really bring on your project or business in leaps and bounds. A perfect example of this is The Bicycle Academy. They need to raise £40k to help fill their premises with tools and machinery that would allow them to teach people how to make bikes from scratch. At the same time they wanted to prove that there was a demand for their services as well as get a list of interested customers. They managed to raise the amount in an unprecedented 6 days showing that not only was there a high demand for what they offered but they also started their business with a list of customers they knew were interested.
Alice: Crowdfunding has become a bit fashionable of late – do you think its here to stay?
Nick: As a way of raising finance it’s definitely here to stay. Crowdfunding offers a viable alternative to costly loans and has so many other benefits that it’s a no-brainer for some businesses. It’s obviously a case of horses-for-courses but the amount of crowdfunding options is increasingly rapidly in this country every day. For example you can offer products and services for capital or if you want to offer equity in your business in exchange for capital that’s possible too.
Alice: What’s different about peoplefund?
Nick: We are unique amongst the crowdfunding platforms because not only can you pledge your money to the project owner but also you can pledge your time and skills. This makes us ideal for startup companies who need advice, capital and unique skills to make their business a reality. We also have a wealth of experience and knowledge when it comes to digital community projects. Our previously established networks add up to over two million people who all have interests in this area. This is a massive bonus for all projects owners and can boost the funding of projects significantly.
Another thing that is unique about our site is our partnerships. Apart from the help and support of Nesta we are also partnered with Plymouth University. Having direct access to the UK’s leading enterprise university has helped stoke Peoplefund.it with fresh ideas and networks of people interested in crowdfunding.
Coming directly from our link with Plymouth University we have developed an affiliate scheme that allows any individuals to make money by recruiting new projects to the site. We ask that people encourage others with great business ideas to add their projects to Peoplefund.it, then lend them a hand to raise the money to reach their funding targets.
Once a project’s target has been reached, we’ll give them a slice of the action. It’s simple. Soon we’ll be rolling it our around the whole country, you can read more here > http://www.peoplefund.it/plymouth/
Alice: What’s the biggest fundraising drive you’ve seen so far on the site?
Nick: One of our previous projects attempted a major fundraising drive that even we thought might be too challenging. Young Rewired State targeted £20k in 10 weeks and ending up raising over £21k. That was one of the most amazing fundraising feats we’ve seen because so many people were involved in helping those guys out. It was a combination of social networking and online journalism that helped get them over the line. They were featured on the TechCrunch website and tweeted about by Stephen Fry and Martha Lane-Fox. It led to them getting support from all over the internet and they were able to raise enough money to run their ‘Festival of Code’ and help support some young coders from all around the country.
Alice: Do you have a favourite project raising funds at the moment?
Nick: Some of the most innovative projects on the site often come straight from the community. One project that’s raising money at the moment is the Perranporth Pool Project. A community based around a primary school is trying to get enough money together to renovate their pool and add in renewable heating. They’re offering swim passes, do pledge support and have a look at their fantastic video if you can > http://www.peoplefund.it/perranporth-pool/
To find out more about crowdfunding please contact firstname.lastname@example.org