By James Mathie
FIVE 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 people, companies and organisations go to market with great ideas and get funded.
Where traditional lenders like the high street bank may say no, 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 need to find your backers, like at 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 structure at a club will have a direct correlation to what is raised.
There are primarily two types of crowdfunding: Firstly ‘rewards crowdfunding’ where products or services are sold without incurring debt or sacrificing shares (e.g. signed football shirts); if it’s 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; 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 can be unlocked working on the assumption that if you own something, you are more likely to keep supporting.
So crowdfunding won’t work for every club but it could have a huge impact. If you’d like to know more contact me at james@club development.coop or check out www.clubdevelopment .coop
