Why did we pivot into equity crowdfunding?

Why did we pivot into equity crowdfunding?


The transformation FundedByMe as a service provider have undergone is quite heavy. Classic crowdfunding and equity crowdfunding are both based on the same principles – but in fact hardly the same.

Both cater to the basic need that people (the crowd) rather are participants then end consumers and want to be part of cool new ideas and companies. And also because creative and amazing entrepreneurs are having a hard time in  this recession to reach and convince those who might invest.

Therefore a lot of people are interested in the reasons why we left a profitable model and took the risk to pivot towards equity crowdfunding. There are many reasons for this, but let’s start with 5.

1. As genuine crowdfund ninja’s we, of course, have backed our fair share of awesome projects and felt great each and every time we received a new, innovative, product to play around with. Although we still are very much into being early-adapters we are convinced that there is one thing even more cool than this …. partial ownership in cool companies, won’t you agree?

2. Many amazing projects have, over time, had problems living up to the ambitious promises made in their campaign. This has had a bad effect on the industry’s credibility and made many platforms adjust there TOS. If you have pledged your cash for a crowdfunded project you often need to be very patient, however with equity crowdfunding these problems are not relevant as there is no shipping and production involved in the process.

3. A year ago we carefully started dropping the words ‘equity crowdfunding’ in different conversations we had with people. Together with the signals we got from our users (we did not talk with regarding this) we indicated that approximately 80% of all people were interested in the idea of owning a small part in a company.

4. Creating jobs. Over the last decade many people have adjusted their dreams and directions, no longer dreaming of careers in large multinationals but rather for small creative agencies and products. The economy is on its way up again and the crisis has left a lot of people thinking about their own endeavours as well. By allowing more startups to raise money, improve their chances of survival, we will ultimately help create jobs.

5. Although we have had the pleasure to work with some amazing creative projects over the past 18 months there are simply put too many crowdfunding platforms and too little awesome projects to serve them all. While all rules and regulations in Europe were already in place it made perfect sense to take this obvious step after we completed some extensive tests in stealth mode. Even though more equity platforms will see the light of day it takes a lot of experience, knowledge and effort to build a complex service like this.