Why Consider Seed Investment via Crowdfunding?- We chat to thought leader Barry James.

by Startacus Admin

Why consider seed investment via crowdfunding? We chat to crowdfunding thought leader, Barry James.

Earlier this week we highlighted the Crowdfunding: Deep Impact Conference that returns 'up North' this November to Sheffield. Given our love of all things crowdfunding, be they whimsical, wonderful or very investible, we relished the opportunity to have a chat with those folks who have become the very thought leaders who are steering the way in the crowdfunding circuit.

Barry James Founder of the Deep Impact conference is one such, well respected, crowdfunding thought-leader. We were delighted recently to be given the opportunity to chat to Barry about; the growth of crowdfunding, why startups should consider seed investment via crowdfunding, the future of crowdfunding, and the upcoming Deep Impact Conference.

So, take five minutes out from the crowd, grab a coffee, a Krüst Cronut (a what?) and read on...

(If you are going to launch your own crowdfunding campaign, you should check out our free crowdfunding support package!)

Hi there Barry, the UK appears to be at the forefront of crowdfunding investment - why do you think that is?

It's been an amazing turnaround actually. When we ran our first event just over two years ago, some people were very sceptical. The consensus seemed to be that it was an American fad that would never fly here, because the business culture is so different. But we decided to test it out with a small event - when this packed out virtually overnight we had our answer, and quickly decided to run the first national UK conference.

[This led directly to the creation of the Westminster Crowdfunding Forum, which we help run, and the Crowdfunding Centre and the Crowd Data Center, to collect live data on what's happening here and around the world.]

We soon realised that the big challenge was awareness. Here was this great thing, capable of helping businesses get started / grow and hardly anyone knew about it - much less understood the potential. Journalists included - so we devised a press strategy generating dozens of press releases on a weekly basis over several months. Which is what led us to create TheCrowdfundingCentre.com. http://thecrowdfundingcentre.com/ By the end of last year we started to see the effects build, and by the spring it had become a hot topic.

Now the UK is growing faster than anywhere else. Great credit is due to the many platforms, including world leaders like Crowdcube and UK leaders like Crowdfunder, who've made so much of this happen. So it's difficult to say but I think the biggest factor is the surge in awareness - the realisation that it's here, it works and it's a great way to get a business started.

Why should a startup who's currently considering Seed investment look at crowdfunding as a funding option?

If your startup is crowdfund-able, there’s a whole heap of reasons. Firstly it's in your direct control - you don't have to wait for a bank-manager or anyone else to give you a green-light. In the time it would take you to write a full business plan you can often get fully funded, with a full order book, without the burden of a loan to repay or any loss of equity.

Plus you'll know up-front whether or not there's a market that you can reach for your product or service. If you succeed, along with the cash, you typically gain an enthusiastic crowd of customer-advocates keen for you to succeed who'll give you good feedback and support as well as helping spread the word.

It can be very intensive, and a lot of hard work, but it's also a great learning experience, about yourself, your product, your market and your business - and you are building your business right from the word 'go'.

Tell us a little bit more about yourself and how you came to be a respected thought leader and voice in crowdfunding?

I've been an entrepreneur for 25 years and an innovator since the start of my career - as an analyst and software designer. What fascinates me is the interplay between technology and society. As Marshall McLuhan pointed out "We shape our tools and then our tools shape us”. It seems to me this is running in ever faster cycles with the internet shaping society and vice versa.

My original degree was a typically strange combination, Psychology and Maths. So when social media exploded across the world, I knew that the technology was trivial, but was soon fascinated by the psychology and it's implications for society and the economy. I needed to understand how and why - what were the mechanisms that were 'changing the game'. A crowd can coalesce around a cause or an idea fast - as famously in the 'arab spring'. But this in endemic and quietly embedding into the world economy - we're now hyper-connected.

Crowdfunding brings money to that transformational picture and is, in my view, in the process of democratising money and finance. We are seeing it go viral - and whole new economic models emerging.

Because of my background as an entrepreneur it was immediately obvious to me that this provided a whole new and more powerful way to get new ventures off the ground, and would have a big impact on innovation, because it short circuits the old decision-makers and puts the makers in direct touch with the consumers.

It's a new kind of freedom for both. The crowd get to choose, to fund stuff they actually want. Entrepreneurs no longer need the permission of a bank manager or other gatekeeper - or to jump through their hoops and serve their agenda - to get the cash they need to get off the ground. This is transformative.

I suppose it's this vision, and the passion I share with my team, that have brought us to prominence. I know it's what drives us to keep pushing the boundaries.

You are the Founder of the Crowdfunding: Deep Impact Conference that returns this November to Sheffield - Tell us about the event, its core themes and its goals?

It's about the deep impact that crowdfunding can make, and is now making, on startups, business growth and entrepreneurship. Creating a new entrepreneur's journey that's supportive and, ultimately, making a deep impact on our economy, making it more people centred.

We want to continue to bring people together to explore and better understand what's happening and what's possible. How they can use crowdfunding to fund and empower their own ventures but also to support refresh and renew innovation and entrepreneurship more generally.

The Deep Impact Conference, also known as Deep Impact III, is, as the title suggests, in its third year. In the future, what predictions can you make about the impact that crowdfunding will have on the traditional route to entry for business investment?

I think it will transform entrepreneurship. The ability for any entrepreneur to connect directly with their market, have a dialogue and even be steered by it is revolutiontionary. So too is the ability to fund a startup without resorting to debt or to selling off part of the business at an early stage. To combine these things totally re-engineers the entrepreneur's journey in a way that was never before possible. It also creates ventures that mature much faster, because their energies are focussed on building the business not pleasing, cajoling or convincing the gatekeepers. They become much more investable because they've proven their product, their team and their market - not to mention generated some initial revenues. That's very attractive to investors.

That's why investors are starting to seek such ventures out, rather than vice versa. That’s new - and there will be a lot more of this.

In your experience, what is the most common mistake that someone makes when running a crowdfunding campaign?

Clarity of message is crucial and needs real work to get it crystal clear and simple. However the biggest mistake is to assume that the crowd will find you - via the crowdfunding platform. You need to start with the interest, and the crowd, that you have, nurture and grow it. You can't start too soon - way before your campaign ideally - building your relationships and growing interest. It's a big mistake to assume that once you've 'told' your audience, your work is done. It doesn't work like that. Awareness needs to be nurtured and fostered over a period of time. In some cases, you can do this over the life of a Crowdfunding campaign, but it's much better to start building sooner and know early on where your audience, and your support, is coming from.

On the 12th Nov, the day before the main conference, we'll be running Crowdfunding Masterclasses where people can learn the mechanics of Crowdfunding - how it works and how to succeed - so we'll be sharing all our experience and secrets there in much more detail.

Give us your pitch in less than 140 characters - why should someone attend Deep Impact III?

Only at Deep Impact III you can meet the pioneers & learn HOW, WHY & WHAT you should be DOING about #Crowdfunding in 1 day!

Cheers for the chat Barry and we look forward to hearing more from you very soon.

Early Bird tickets are currently available for £75 from the Crowdfunding Deep Impact site  - this includes the full day conference, lunch and refreshments. With the Crowdfunding Masterclass on the 12th and the main Deep Impact conference on Thursday 13th  November. We look forward to hearing more about both events over the next few weeks. Don’t forget to tweet us at @iamstartacus if you are attending.

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• #crowdfunding
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Published on: 17th October 2014