In this episode, we expand on our previous podcast about equity crowdfunding as an alternative fundraising route for your startup company. So far, iNeed has raised ~£208,000 on CrowdCube alone for their mission to help mobile users find anything, anywhere with recommendations from friends. Simon Grice, the founder of iNeed, was nice enough to sit down with us to share the secret to their astounding success.
Listen below or on iTunes.
Show Notes
You can check out Simon’s equity crowdfunding campaign for iNeed on CrowdCube here, which has raised £208,620 thus far. “You can download iNeed now! iNeed is rapidly growing in the $5.3bn annual mobile advertising market by providing a better way for everyone to find any business they need.”
– iNeed is a free app that helps a user find anything, anywhere and capitalizes on recommendations from friends. This could be a local business or something highly specific like a particular type of mechanic. You can download the app here.
– The company aims to make searching for a service on your mobile device much easier than it currently is through google, yahoo, or another search engine.
– iNeed is doing their fourth round of funding and has funded there app through a mixture of crowdfunding and traditional angel investment. They have raised money on Seedrs and CrowdCube.
– Equity crowdfunding seems to be an especially good fit for consumer-facing companies because there are more people that can benefit from the app or service. If the campaign is for a specialized business-to-business service, app, or business, then it might be harder to get individuals interested in the campaign if they don’t have previous experience in the industry.
– It’s important to line up at least 30% of the investment amount you are seeking ahead of time for social proof and to begin to get the campaign going. This could come from your existing connections, customers, or previous investors. The minimum investment in iNeed is £20.
– Seedrs seems to be very good at the early stage when it comes to equity crowdfunding. CrowdCube is a better fit for established companies.
– Don’t forget to carefully consider how you will give liquidity to your investors on a particular equity crowdfunding platform. Are you open to being acquired in the future? Will you seek the IPO route?
– One way to gauge the potential future value of your company is to compare the startups to others that have exited in the same space. Keep in mind that there are many other ways to value the future value of a company, like a discounted cash flow analysis.
– Simon doesn’t believe that equity crowdfunding will replace traditional angel investment. The average investment on CrowdCube is £2,000. The majority of iNeed investors joined the investment opportunity for about £200 – £400. These investors don’t look into the detail of the investment as much as a traditional angel investor.
– Rather than being a “game changer,” Simon thinks that equity crowdfunding is a contributory funding method to other forms of investment.
– The motivations behind someone investing in a campaign on CrowdCube or Seedrs is very different than the motivation behind pledging to a campaign on Kickstarter or Indiegogo. The motivation is more financial than the desire to own a product or help out a creator.
– Simon’s main takeaway from doing several equity crowdfunding campaigns has been to not rely on the crowd as a crutch. Equity crowdfunding doesn’t make traditional fundraising for a company any easier, it’s just a different way of fundraising.
Conclusion
Don’t forget to check out the iNeed CrowdCube campaign here and to download the free app! While you’re at it, don’t forget to rate this podcast in iTunes. Finally, I’d love to hear what kind of crowdfunding campaign you are running via a comment down below!
