Although startup founders have incredible business ideas all the time, very few make them a reality. Many startups have potential, but people often lack the funding to develop them fully or the presentation skills to sell them to investors.
This is where crowdfunding can help you. Crowdfunding can assist you in covering costs and immediately reaching an audience.
This article features interviews with six startup founders who have launched crowdfunding campaigns and explains what made them successful so that you can use these insights for your own crowdfunding campaign.
What is Crowdfunding?
Crowdfunding helps startup founders raise thousands or millions from anyone with money to invest. Through crowdfunding, anyone with ideas can present them to interested investors. Investors can choose from hundreds of ventures and invest as little as £10. Small businesses and startups must raise a minimum of £10,000, with no venture on how much money they can raise. Crowdfunding websites generate income from a portion of the funds raised.
This will increase the opportunity for entrepreneurship by expanding the pool of investors outside the traditional circle of owners, relatives and venture capitalists.
According to Fundsquire, a growth funding company for UK businesses, 672,890 new businesses were established last year, 4.2% from 2020, equating to 1,843 new companies per day. Another growing tendency in the UK crowdfunding market is transaction value, which some studies predict will exceed £49 million in 2022 and more than £51 million by 2026.
6 Successful Startup Crowdfunding Campaigns
1. SortFlow Limited
SortFlow is a London-based cleantech startup that provides software applications to help the waste & recycling industry be more efficient.
Their original development was for a recycling plant digital twin in 2020. However, SortFlow’s CEO, Luc Mallinger, became frustrated with doing all the performance modelling on Excel sheets, and he decided that it was time for the cleantech industry to have custom software tools to help perform this task.
Mallinger used his own savings to get the company off the ground and build a prototype. Although he heard about using crowdfunding campaigns to raise the capital they needed, he admitted that this didn’t appear feasible for them.
“Crowdfunding tends to be more B2C, and we are purely a B2B company,” he explained. “So, this may not have seemed at first glance to be the most obvious route. But given the space we operate in, I thought we would have an audience [because] there is now a real appetite from all types of investors that aim to change positively. The challenge was for us to present our solution in a way that would make sense to someone who knows little or nothing about the recycling industry.”
Through the crowdfunding campaign they launched, they were able to generate the funding they needed to allow them to successfully launch their solutions and work on a third application that’s backed by Innovate UK.
2. One Hundred Group Ltd.
One Hundred’s goal is to become a significant player in the trail running market by organising the first Mountain Trail 100-mile and 100km World Championship.
With an estimated 20m trail runners globally, growing by an average of 12% p.a. over the last decade, One Hundred believes that mountain trail running needed a performance-based global competition with prize money, marketing and high-quality broadcasts to attract the pros & the masses.
One Hundred® was born from the dream of its Co-Founder and CEO, João Andrade. He was previously a health-tech / biotech entrepreneur for over 13 years, putting the focus on mountain trail running. The now ultra-marathon runner who tackled ultras up to 175 miles was, until recently, just a businessman in sports and didn’t do more than the usual not-so-bad “two or three trips to the gym every week”.
At the end of 2016, he decided to take the focus off his executive “city” work, which used to consume “up to 20 hours a day”, and committed to making a radical change in his life.
He started by searching Google for the most demanding endurance tests in the world. He found Badwater 135 in the USA and pointed the needles to be one of the 100 selected to compete there in 2020. The coach, Tiago Aragão, who later became the co-founder of One Hundred®, called him “a tad crazy” but agreed to prepare him for the race.
From there, he began training and participating in national and international competitions. Without being able to shut down his entrepreneurial mind during these events, he kept his eyes on race organisers until he realised that there were countless opportunities in mountain trail running.
In 2018, João Andrade, who was the first Portuguese to enter the London stock market with his own startup back in 2016, sold his stake in his previous company and decided to start One Hundred® to create the world’s first mountain trail world championships for distances of 100km and 100 miles.
From the start, Andrade shared that they raised funding through a SEIS round using a crowdfunding platform. They decided to combine an EIS crowdfunding raise with funding from a private equity firm for the second round of funding.
“We wanted to increase our exposure to brands and sponsors, be under the radar of larger funds, and be the first to open up the opportunity for the extensive community of trail running to invest in its future via One Hundred,” Andrade explained.
When asked what the “secret sauce” that made both crowdfunding campaigns successful was, Andrade said: “Studying and planning very well using examples of other successful crowdfunding campaigns and working closely with the campaign manager at your chosen crowdfunding platform to make adjustments as we progressed.”
Zump‘s mission is to help more people find the home they want. So, they built an all-in-one property app that gives you more homes to search from than any other platform and an easy first step to selling your property.
Before launching their crowdfunding campaign, Gray and his co-founders raised funding for Zump through the family office and a few angel investors they successfully connected with.
They decided to raise capital through crowdfunding because they wanted to try a different route to see if it unlocked any other opportunities.
“We are a consumer-facing product, so having the potential exposure was appealing,” Gray explains.
Gray attributes the success of their crowdfunding campaigns to their ability to effectively convey the problem they were trying to solve.
“I think many people have felt the problem we highlighted, so this resonated well,” he explains.“ All the startup’s founders are deep in the property industry, and we all kept hitting the same problem through our own experiences, clients’ experiences, or the experiences of people we know. It’s too hard finding the right home for sale on the market, and there is no way to easily explore interest in your own home without committing to putting it up for sale.”
“50% of homeowners stay in their homes for up to 4.4 years longer than they wanted to (I’m in this group). A key reason for this is that they can never find what they’re looking for. 50% of homeowners are unsatisfied with their homes. All this has led to a vicious circle: Homeowners search property portals for their next home and don’t find what they want. Therefore the majority don’t put their home up for sale because it’s a massive hassle and commitment. This further reduces supply, reducing the likelihood of finding what you want on portals.”
This is on top of the fact that property is a vast and potentially very exciting investment opportunity.
Canopey is the home for buying better. They’re on a mission to make shopping sustainably easier for everyone, to make buying without worrying about your impact on the planet and people.
After spending more than five years working at festivals for Greenpeace UK, Canopey founder Thomas Panton was tired of seeing the fields of waste left behind at the end of every weekend. He started a company to collect and upcycle leftover festival tents. The business was a success, but people kept saying the same thing: “We want to shop more sustainably, but we don’t know how or where to go”.
He brought in co-founder Hugo Douglas-Deane, and Canopey.com, the home for buying better, was born.
Before crowdfunding, Panton and Douglas-Deane raised a small round of investment from friends and family. This was followed by a round which included several angel investors and two investment funds. We closed the round with our Crowdfunder.
They decided to raise capital through crowdfunding because Canopey.com is all about creating a community of people and brands who want to build a better future. We’re an inclusive home for everyone: eco-warriors, refillers, and those who are just starting to think about what they buy.
“We knew a Crowdfunder would be the perfect way to bring our community together and give everyone the opportunity to own part of the company and its exciting future,” Panton shares. “We also had the privilege of being on an impact startup accelerator programme, which gave us extra insight into the crowdfunding process.
An incredible 350 investors pledged money for their crowdfunding through the crowdfunding campaign they launched.
When asked what contributed to the overall success of their crowdfunding campaign, Panton points to two things.
“The first is that people want to shop sustainably, but it’s too hard right now,” he said. “[The investors] saw that Canopey makes it simple, it’s about making buying better and more accessible for everyone, rather than just focusing on the eco-warrior, and that resonated with them.”
“The second reason is that people saw our exciting and ambitious vision: we’re here to take sustainability mainstream, building big from the beginning and challenging the big-boy polluters along the way. We’ve already built great traction with more than 4,500 people in our community and a strong network in the sector. Combine this with a lot of hard work, and we ended up smashing our target despite being pre-launch.”
5. Revive Eco
Revive Eco is a sustainable biotech company creating alternatives to palm oil from used coffee grounds. Having developed a patent-pending technology to manufacture their products and recently closed an investment round, they are now focused on scaling up their manufacturing capacity to launch their products to market. They are engaging with a range of global cosmetics and food manufacturers actively seeking more sustainable raw materials for their products.
Revive Eco’s founder, Scott Kennedy, got an “A-HA” moment that led him and his co-founder, Fergus, to create and launch their startup when they were both studying Entrepreneurship at Strathclyde University whilst also working in cafes alongside their studies.
“These two worlds collided as we started to look into the waste created by cafes, specifically focusing on used coffee grounds,” Kennedy tells us. “It made no sense to us that tonnes and tonnes of this material were being thrown in the bin every day.
This shifted our mindset away from coffee grounds being a ‘waste’ and viewing it as material that was just ending up in the wrong place. This was very much the lightbulb moment for us, and since then, we have worked incredibly hard to develop processes to create a range of innovative and environmentally beneficial materials from used coffee grounds.”
Before launching their crowdfunding campaign, Revive Eco’s co-founders had previously raised seed investment from angel investors, which enabled them to catalyse their development work. They have also successfully secured a range of grant funding from the likes of Zero Waste Scotland, InnovateUK and Scottish Enterprise, which alongside their seed investment, enabled them to continue their R&D work and grow their team.
They also entered various competitions and were fortunate to secure prize money through competitions including Chivas Venture, Shell LiveWIRE and Scottish Edge, which were all integral to their continued growth.
They decided to raise capital through crowdfunding because they have always been interested in crowdfunding as a funding model and have always had an appetite for incorporating it into their investment strategy.
“We felt that this was the perfect time for us to raise capital through crowdfunding as we had begun to garner real traction in various industries and were at a really exciting stage in our growth journey,” Kennedy explained. “As such, we were confident that our proposition would appeal to a wide audience of both experienced investors and individuals who are as passionate about the environment as we are.”
“Since our inception, we have always been driven to forge a community of like-minded individuals who can help push us forward. We never wanted to operate in a vacuum and close off what we are working on from others. Thus, crowdfunding has allowed us to share what we are working on and our future plans and ambitions.”
Through Revive Eco’s crowdfunding campaigns, they have now welcomed over 600 new investors to their community, and the co-founders couldn’t be more excited about that.
When asked what the “secret sauce” that made their crowdfunding campaign successful was, Kennedy pointed to the amount of work he, his co-founder, and the entire Revive Eco team put into the crowdfunding campaign long before it went live and anyone saw it.
“Preparation was crucial,” Kennedy said, “and we put huge amounts of time and resources into preparing our campaign and our launch, e.g. driving pre-registrations before launching the campaign to ensure there is an existing base of interested investors ready before we launched.”
He also points out that authenticity and communication were pivotal.
“We had several team members involved in our pitch video to give investors a real glimpse of the people behind Revive. Communication was also key, ensuring we were quick and thorough in replying to questions during our campaign. With the campaign only being live for a finite amount of time, we knew we needed continuous and concise engagement with interested investors to maximise our investment.”
Goodvest is the first saving solution allowing you to invest responsibly. Our mission is to democratise SRI. They have developed a platform for our clients to build a better future by investing in 6 sustainable themes (climate transition, clean energies, gender equity, and water). Our climate transition funds, for instance, only include companies whose carbon footprint is in line with Paris Agreements, and we exclude harmful industries such as fossil energy, gambling and tobacco.
Goodvest was created after a simple observation of the UN: Every year, $2.4 Trillion must be invested in clean energies. Coincidentally, Socially Responsible Investment (SRI) has a more positive impact on the planet than becoming vegetarian or ceasing to take the plane. To investigate the issue, we’ve conducted 400 savers interviews and uncovered two issues:
Firstly, despite the 65% of French and 80% of Millenials desiring to have responsible savings, a very small proportion of them (5% to be precise) do. Besides, the existing savings solutions offer little to no transparency, an opacity deliberately maintained by the banks. In addition, there is a limitation of accessibility in terms of fees, the complex process associated with opening an account, the lack of digitalisation and a minimum amount of investment often too high.
Before launching their crowdfunding campaign, Goodvest’s CEO, Joseph Choueifaty, explained that they raised funds from business angels and banks and obtained public grants.
He decided to raise capital through crowdfunding because, since its beginning, Goodvest has been committed to changing savings together.
“Moreover, we have continually involved our entire community in the company’s construction,” Choueifaty explained. “To further involve our clients in the company, we have gone the extra mile by allowing as many people as possible to participate in its development.”
Choueifaty attributes mutual trust as the secret sauce for their crowdfunding campaign success.
“Because we work with and for our clients, I think the mutual trust we have built up has made this campaign a success. Moreover, our core business is based on the transparency of our investments. We have nothing to hide, which increases trust.”
Crowdfunding is an excellent way to raise funds for startups.
We hope this article helped you and increased your interest and understanding of crowdfunding. Trendscout is an excellent platform for crowdfunding that you can use to raise funding for your startup.
We offer excellent networking opportunities by connecting you directly with other startups and investors. It allows you to pitch your ideas and learn from other startups.
Our team of consultants will become an extension of your team. We will get to know you, your team, and your business offerings. This will help you gain insight into your pitching and refine your model as a result.
If you want to know more about crowdfunding, investing, or other services that Trendscout offers, you can call us today. Rest assured that someone from our team will assist you every step of the way.