5 years ago the term ‘crowdfunding’ would have been met with bemusement, now the arena has become, well, rather crowded. And quite right too. What a great concept to help little people, companies and organisations go to market with great ideas and get funded. Where traditional lenders like the high street bank may say no, or squeeze the life out of an idea, now punters like you and I can say yes at the click of a button and make dreams come true.
Sounds good? Well, even better, what about a world where the crowds already exist, so you don’t even need to go and find your backers, like at say, football clubs?! Easy money right?
Well not necessarily.
If you really want to raise the most money from a crowdfunding campaign you need to be prepared for a smarter more engaged audience now that crowdfunding is so popular. People want to know what will happen to the money, and whether they trust the people and the structure at a club, will have a direct correlation to what is raised.
There are primarily two different types of crowdfunding :
Firstly ‘rewards crowdfunding’ – where products or services are sold without incurring debt or sacrificing shares (e.g. signed football shirts or a chance to train with the 1st team); if its rewards you are offering it’s very easy to get carried away and commit a long list of unique experiences but don’t forget you need to be able to deliver on the promise. So if it’s a chance to travel on the team bus, you’d better check with the Manager first!
Secondly ‘equity crowdfunding’ – where the investor receives shares in return for the money pledged (e.g. community shares); this has the ability to take the relationship between club and investor to a new level. By allowing people to part own a club, a generation of transactions (rather than a one off reward) can be unlocked working on the assumption that if you own something, you are more likely to keep supporting it, both financially and emotionally.
So crowdfunding won’t work for every club but with a little bit of thought, it could have a huge impact.
If you’d like to know more please drop me a line – firstname.lastname@example.org or check out www.clubdevelopment.coop
From the Non-League Paper