Images_Digital_Edition_January_2020

www.images-magazine.com 38 images JANUARY 2020 Cr owd p lease rs Crowdfu nding could help you raise money to gr ow your busine ss, but it takes time and effort to run a suc cessful campaign. Here’s what you need to know W h en 3 r d R a il P r i nt S pace opened in Peckham Levels, London, in January 2018, it already had the support of a creative community who had pledged £11,558 to help transform the 4,000sqft space into a fully equipped, open access screen print studio. Two years on, studio manager Holly Clarke believes the benefits of crowdfunding have been more than just financial. She says: “It’s such a different experience from going to a bank. It allowed us to outreach to the community and people in our field and helped us raise awareness of what we were setting up. It opened doors to new opportunities and partnerships, which we continue to work with today.” Holly and the 3rd Rail Print Space team raised funds via Kickstarter, a global crowdfunding platform focused on creativity and merchandising. “This was the crowdfunding platform that we were most aware of at the time and it enabled us to completely outline all that we wanted to achieve, allowed us to create exciting visuals and offer exciting rewards, which we felt suited our set-up,” explains Holly. “Our target i ncreas i ng l y access ibl e, success i sn ’ t guaranteed. Tim says: “An average of 70% of campaigns fail to achieve their target, and that figure has remained consistent for the last 10 years.” Holly adds: “It took a lot of hard work and perseverance to create our new space and raise the funds to make it happen.” Types of crowdfunding There are four main types of crowdfunding, with various platforms specialising in each model. This makes it easy to set up and run your own campaign. ■ The reward model This is by far the most popular type of crowdfunding. Users can set up their campaign on platforms like Kickstarter or Indiegogo, and offer rewards or perks to supporters in return for their pledges. ■ The equity model This type of crowdfunding is usually reserved for disruptive, seed-stage businesses that have a good chance of growing quickly. The best-known platforms are Crowdcube and Seedr, where investors can buy a stake in a business, typically raising in excess of £100,000. ■ The lending model Also known was £10 , 000 an d we ran a f our-wee k campaign. In the end we had 117 backers and raised over £1,000 more than we’d imagined.” How does it work? Put simply, crowdfunding is a mechanism for raising finance by putting out a call to a large group of potential supporters or investors – the crowd. The funds are typically raised from a large number of small contributions rather than a small number of large contributions, and there are several well- known platforms that support different methods of funding. Tim Wright, director and co- founder of crowdfunding consultancy Twintangibles, believes that there are two key reasons why crowdfunding has taken off in the last decade. He says: “Crowdfunding has become very popular in the last 15-20 years thanks to the internet and social media – we can reach more people and we can do it at a low cost. Secondly, the financial crash of 2008 meant that people were forced to look for alternative ways to raise money – and crowdfunding fits the bill.” Although crowdfunding has become