‘Tis the Season: 5 Reasons I’m Thankful for Crowdfunding
A typical day at Crack the Crowd is a full one and I wouldn’t have it any other way. My team and I work with truly great clients. The projects are fun, challenging, and the ventures we support are changing the business world as we know it.
I’m not in crowdfunding randomly. A few years ago, when I joined my first crowdfunding company, I committed. I went all-in, never looked back, and never will. The reason? Every business needs funding—no matter at what stage it’s at, whether it’s a startup looking to launch, or an established business looking to scale. Crowdfunding has changed the way businesses seek and receive funds, and will continue to do so. The traditional ways of securing capital have never been more challenged. I think that’s a good thing.
In short, I’m feeling lucky and grateful to be in this industry. With the Thanksgiving holiday approaching, I’m sharing the top five reasons for why I am really grateful to be in this space—particularly on the eve of Title III of the JOBS Act going live next year.
1. It has never been easier to launch…anything
I’m not suggesting that launching is easy. In fact it almost never is, and the process will work parts of your brain you never knew you had. I was lucky enough to co-found my first company at 19, and despite fantastic growth and selling out as quickly as we could restock, funding was always a battle. I learned that sales and profit margins are irrelevant when you have to triple inventory orders every time you restock. And despite growth, eventually the cash runs out. Almost two decades later, I’ve launched many more companies, and one thing is very clear: The hurdle of finding capital is a lot lower than it used to be. In fact, it’s now at your fingertips.
2. Crowdfunding pays out on good karma
Warren Buffett once said, “It takes you twenty years to build a reputation and five minutes to ruin it. If you think about that you’ll do things differently.” The reality of crowdfunding is that your reputation, and how you’ve treated your family, friends, and customers will come back to help (or haunt) you. Those who act ethically, go out of their way to be kind, and treat others fairly, get the rewards (and respect) that kindness deserves. Likewise, if you haven’t played nice…well, this resource may not be for you. Crowdfunding doubles down on the best of us. Maybe it’s crude to monetize niceness, but I’m for anything that makes us take a step towards being a better person.
3. Crowdfunding makes entrepreneurs better business people
There is no such thing as faking it ‘till you make it when you ask total strangers for money. They’ll research, consult the oracle of Google, and seek out any flaws to ensure you’re as sure a thing as possible. Business folks who want to crowdfund the right way (shortcuts endanger a raise—always) have to have their act together to prove they’ve done their homework. Is the business plan complete? Have you nailed your pitch and messaging? What’s the timeline? Have you amassed a solid contacts list? Have you thought through your inbound marketing strategy? These are just a few of the tasks entrepreneurs need to know like the back of their hand to stand a chance at meeting their target. And when you consider that the tasks above (just a small fraction of what’s required) are like teachers, you can only get better.
4. Crowdfunding makes you more solutions-oriented
Some people liken crowdfunding to fundraising, and I can see why. Both activities attempt to mobilize a group of people to part with their money for a worthy cause. But crowdfunding is really only the beginning for a new venture. A successful raise will no doubt make a new venture’s market entrance possible, but the real unleashing of innovation happens after the raised funds have been applied—and after the product/service at the heart of the raise has been vetted for appeal. The awesome power of innovation is only unleashed when a business has formed a solid strategy to navigate the waters of ideation to the first sale. When you work hard to raise a large amount of money, you will find yourself fighting to make sure that labor hasn’t been squandered. You won’t allow yourself to get stuck by challenges and conundrums. You will find solutions no matter what.
5. Crowdfunding levels the playing field for anyone, anywhere
Our information overload has gotten to such a saturation point that it’s highly possible you don’t even notice when an advertisement is fighting for your attention, along with everything else. Crowdfunding, however, cuts through the noise—not with a louder call-to-action, but with authenticity. And something you can’t buy or fake is authenticity. Crowdfunding requires you to tell an authentic story, and ideally it’s a good one. We all know what happens when we hear a good story—we talk about it. We tell our friends. We pass it on.
Crowdfunding makes it possible for the little guy (or gal) with nothing more than passion and a dedicated circle of friends to attain just as much power as the biggest corporations on the planet. This is why we have seen—and will continue to see—garage-based startups from “no-name” towns across the world increase in number. You no longer need close proximity to Sand Hill Road. What you do need is a great idea, a good story, and the vision and determination to see your great idea through to the end.
I continue to be excited that I get to work with super creative people who have some of the most inspirational ideas, dreams, and business ideas I’ve ever heard. We’re on the cusp of a new level of innovation, and crowdfunding is just the tip of the spear. I can’t think of a better vantage point from which to ride the wave, and for that I am truly thankful. Thank you to our clients, our peers, our people.
Happy Thanksgiving from myself and my entire team at Crack the Crowd.