Profit + Purpose by Kyle Westaway

Author:Kyle Westaway [Westaway, Kyle]
Language: eng
Format: mobi, epub
Publisher: Wiley
Published: 2014-09-15T00:00:00+00:00

Smart Crowdfunding

A hot new fundraising approach that has emerged in recent years is crowdfunding—raising small amounts of capital from a large number of people, typically through an online platform.

Soma founder Mike Del Ponte knows a thing or two about crowdfunding and executed a brilliant fundraising campaign by blending a smart mix of angel investment and crowdfunding on Kickstarter.com to launch his company. The most successful crowdfunding campaigns have been launched at the design phase, when an organization has created a good prototype of a product, but requires capital to go into full production. This was true for Soma, and Mike not only did a great job of attracting funds through his Kickstarter campaign, he also leveraged it to help draw in traditional investors.

The key to successful crowdfunding is mobilizing both friends and the media. The media needs to be well targeted, with strong readership, a large reach, and a relevant audience. But potentially more important than the media is getting your friends excited and on board as advocates. In order to do this, you've got to spend a lot of time prior to launch soliciting and listening to their advice, giving them a sense of ownership in your mission, which increases their commitment to seeing it succeed. Surprisingly, Mike found that crowdfunding is not only about the money you raise in the campaign, it's about the media exposure and about building a community and gaining social proof of concept. One last benefit is that it helps you learn what consumers want from your product. Mike used his campaign to capitalize on all of these benefits.

Mike had never imagined he would end up running a high-design, sustainable products company; he had planned on being a priest. As a student at Boston College, a Jesuit-Catholic university, he was inspired by the priests and nuns there to follow in their footsteps. So he headed next to divinity school at Yale, where he discovered that while he didn't think he'd make a great priest, he was good at inspiring and connecting people to empower people to follow their dreams. He also met a group of young social entrepreneurs at the school, and he started helping them out with their ventures and discovered he really liked it. So he became a social entrepreneur himself and launched Sparkseed when he was 24. Sparkseed is an organization aimed at helping young social entrepreneurs gain access to capital, mentorship, conferences, and community—everything they would need to make their organization thrive. But after running the organization for a number of years, launching initiatives around the globe—including food programs in Africa, composting programs in the United States, and helping design green companies—he decided he wanted to get some experience in the for-profit startup sector. So he joined a young startup called Branchout.com, a professional network on Facebook, where he led the marketing team. While he was there, the user base grew to 25 million and the company raised $49 million in venture capital. But he felt that as interesting as the work was, it wasn't his calling.

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