5 Remarkable Crowdfunding Successes
Last year, Zac Brown from Ohio wanted to make a potato salad.
But not just any potato salad. To reduce the costs of this venture, Zac launched a crowdfunding campaign on rewards-based site Kickstarter. His campaign raised $55,000 in a matter of weeks and the potato-party that followed became the stuff of legend.
An amusing story, but not truly representative of the crowdfunding sector as a whole. Yes, clearly everyone saw the humour in Zac crowdfunding the best potato salad of all time. Hundreds of people donated money without expecting anything in return, save for a few potato slices in mayonnaise.
This type of crowdfunding is called “pledging” – backers receive little more than a ‘thank you’, or perhaps a discount or freebie. The crowdfunding industry, however, goes well beyond pledging and has grown into a serious form of business financing.
Read Dutch? Check out this article on RTL Z.
Owning a piece of the company
More and more businesses are finding funding through either equity crowdfunding – by selling equity in their company – or loan crowdfunding (peer-to-business lending) – by paying fixed interest to a crowd of lenders. Last year alone, businesses in Europe took €2.5 billion via crowdfunding. Globally, the crowdfunding industry is set to overtake more traditional forms of financing such as venture capital and angel investing. Here we highlight 5 awesome crowdfunding successes from our #CrowdfundClub here at Symbid.
A warm home thanks to a computer server
One of the most well-known equity crowdfunding successes is energy start-up Nerdalize. The idea? Homes heated with the power of computer servers. The entrepreneurs launched their business with seed capital from the crowd. More than 150 investors bought shares with just €20 or more and have since been rewarded with significant value growth.
Nerdalize is now internationally known (thanks to the BBC, Forbes, TechCrunch etc.), has won several awards (most recently the Accenture Innovation Award) and earlier this year signed a partnership with Eneco. This is the promise of equity crowdfunding in a nutshell: help a young team of entrepreneurs and profit from their success. Just imagine if, 10-15 years ago, the tech giants of today had been funded via equity crowdfunding…
From home brewer to brewery in 5 hours
It started out as a hobby, a few guys brewing beer in their living room. But the beers of the Nijmegen Brouwtoren proved so popular they had to expand production. They opted for equity crowdfunding. Friends, family and the Symbid crowd were summoned to help and help they did. Within 5 hours 225 people together invested €90,000 and enabled this highly popular micro-brewery to scale up production from 500 to 8000 litres per month. Cheers to that!
Crowdfunding a crowdfunder
Last summer Lendahand – a Rotterdam-based social crowdfunding platform and close friends of Symbid – achieved the highest equity crowdfunding total in the Netherlands with €400,000 raised from 204 investors.
Together the Lendahand and Symbid crowds combined to help this social crowdfunding platform scale up and increase the number of businesses it supports in developing countries. A crowdfunder crowdfunded a crowdfunder.
Save the bookstore
If you live in the Netherlands then you probably already know how the story begins. It’s 2014, and bookstore chain Polare is bankrupt. Employees of its Rotterdam branch, formerly known as Donner, see a future for their beloved bookstore and take action. They launched a campaign at Symbid, hoping to activate the book-lovers of Rotterdam and beyond. It worked. Close to 2000 small investors jumped in to save this local icon.
“I am a small shareholder and I feel proud every time I step inside Donner, knowing that a small piece of the shop is ‘mine,'” says investor Henk Schaaf.
Meanwhile, Donner is progressing well and its shareholders meet regularly to discuss plans for future growth.
A €2 million turnover
It’s fair to say equity crowdfunding has so far been used mostly by start-ups. These young businesses get funded based on their potential for future revenue growth. But there are signs this is beginning to change as larger businesses notice the awareness-raising benefits of crowdfunding. Market research business Nebu is one of them: a 23-year, proven business with 90+ clients worldwide and an annual turnover above €2 million.
Nebu have used their crowdfunding campaign as a PR tool but also – in line with their company values – as a method of generating constructive feedback from the crowd. Unsurprisingly they hit their target amount in no time and raised it to € 175,000. In fact, Nebu is still overfunding with 3 days remaining – be sure to check it out.
Crowdfunding showing remarkable growth
It’s true that crowdfunding offers an alternative source of funding, for example when a business is denied by the bank. Increasingly, however, we’re seeing crowdfunding mature into the preferred option for marketing-savvy companies of all shapes and sizes.
For investors the benefits are clear: help passionate entrepreneurs realise their dreams while owning a piece of the business. Over €49 million was raised through crowdfunding in the Netherlands in the first half of 2015, with more than 1,500 projects and companies funded, and the industry is expected to double again in 2016. Now that kind of growth really is remarkable.
Read Dutch? Check out this article on RTL Z.