In the past few years a revolution has crept into the world of the entrepreneur, making it possible like never before for bright ideas to raise money in a few weeks or days. This revolution was born of the Internet and it's called crowdfunding. I find it hard to imagine a bigger change coming over entrepreneurship that we are witnessing right now, courtesy of Indiegogo, Kickstarter, and several other companies in this growing financial arena.
When I was a much younger inventor the opportunities to raise money for one's business ideas were much more limited than they are today. There was the ever friendly bank manager, who would smile kindly and explain that if your business venture failed then your house would become the bank's house. And there were venture capital opportunities which required the entrepreneur to jump through loads of hoops: creating an impressive business plan, answering interminable questions, and only then, if you were lucky, came an offer of the funds you needed in return for a huge slice of your company. And a few of us were fortunate enough to get funding from some sort of government initiative aimed at encouraging growing British technology companies.
But nowadays there is a new kid on the funding block - crowdfunding. Just follow the simple campaign instructions and advice on one of the major crowdfunding web portals and you will soon learn what the world thinks of your bright idea. If your idea really is a stroke of genius, or just plain interesting, or if it captures the hearts or imaginations of enough visitors to that web portal, hey presto - you will get the financial support you are after. And if the idea bombs, and only a trickle of money flows in, you will know you are following a risky path and that you would be better off ditching your idea or at least reworking it to make it more appealing to your target market. That's one of the advantages of running a crowdfunding campaign - you get to test the market without spending serious money.
Two of the other great things about crowdfunding are that anyone can try it and almost any well thought out project has a chance of success if its funding goal is realistic. As I write, the current offerings on the Indiegogo portal include the usual mix of commercial ideas aimed squarely at the bottom line of a balance sheet, but there are also several philanthropic proposals: help get a marine, injured in action in Afghanistan, and his wife and seven-month old son, to Hawaii for a restful vacation; help to build sustainable homes for orphans in Africa; and raising money for a couple in the USA to help pay for their baby's medical bills.
I first started to take more than a casual interest in the crowdfunding revolution when one of my companies, Retro Computers Ltd., launched a campaign at the end of 2014, to raise money for the production of the Vega, a retro version of my 1980s ZX Spectrum computer. We set ourselves a target of £100,000 and 2 months in which to raise it. The speed of the response amazed us - we reached our target in less than 36 hours and ended with a little over £150,000. But our success was totally eclipsed by a remarkable venture, described as "a revolutionary beehive invention, allowing you to harvest honey without opening the hive and with minimal disturbance to the bees." Who would have thought that such an idea could generate so much enthusiasm in funders? Yet the four Australians who launched their campaign, seeking around $7,000 (USA), were rewarded with a whopping great $12,487,309, some 17,385% of their target, making my company's achievement of 150% pale into insignificance. And good luck to them down under!
I predict that crowdfunding will eventually eclipse banks and venture capitalists as the principal sources of funding for commercial ventures, and that the next stage in this revolution will see entrepreneurship as the most popular career choice for many young people who have a bit of get-up-and-go, but who previously would have followed a more traditional career path. I'm certainly hooked on crowdfunding, and Retro Computers Ltd. Is about to launch its second campaign on Indiegogo, this time for a hand-held version of our Vega games console.
You can find details of my latest project here