Crowd funding business development questions

[Nooj]

Hi all, thought I'd mosey on over and see what the collective wisdom reckons to this.

As you may or may not remember, I've been running Shiny Bike Syndrome (my own company) for five or six years now and after a slow start I am now doing alright, averaging about 8 bikes a week with the valeting, plus the odd VentureShield job and a few sales in my webshop.

There are a few things I'd like to do with the company in the near future, but they all involve seeking external investment. I'm currently investigating crowd funding to get them off the ground. How do you all feel about this method of business investment?

Do any of you know anything about crowd funding? Are you, or have you been, actively involved in any? I've been reading up on it and know the basics, but want to know what a random selection of people think about it (to reflect the mixed bag of people who would be potential investors if I go ahead).

I want to hear all of your ideas and thoughts on this subject, even if you have no actual experience I still want to know how you feel about this funding method as I need to know what doesn't appeal about the idea as well as what does, so all feedback will be useful!

Thanks :-)

[WhyNot]

How much investment are you talking and whats your plans for the future? It seems like an awful lot of work if you only need >10k investment.

I'm in sales and marketing role so investment isnt my strong point, however the more people you have involved in your business the more complicated it will become, unless you can leverage these people into helping you expand and create a franchise, secondary sites etc.

[Nooj]

Good question. For the first stage I reckon I'd only need about £4k. For the 'big dream'... I have no idea, I need to look into the costings, but I'd expect it to be over £100k to do everything I want, more if I wanted to take it across to Europe as well.

[WhyNot]

4k isnt a big investment, certainly not worth the hassle on crowdfunding on. Second question is - If you increased marketing efforts and took on more work to increase funds is that something you'd have time in your schedule to do? Or would that involve expanding staff?

In the long term id personally i'd look to the bank for a business loan, that way if you needed added expertise then you can employ people at your wish who would be a better quality than those involved in crowdfunding.

[Nooj]

I could take more work on (it's already there waiting), but then I'd have no time for business development. The next thing I want to get into is top quality carbon fibre bike parts. I have already bought over 100 moulds and have someone lined up to do the work, I just need the initial lump sum to buy materials up-front, have some renovation work done to some of the moulds and get a basic website and brand image together (some of which I can do myself, but I'll at least need to cover my time).

I applied for a bank loan a couple of months ago and they (Experian, through my bank) turned me down. They were happy to lend me more than this when I first set up and had no money though :-s

[Long John]

Crowd funding sounds a bit involved for £4k, without knowing anything more than the contents of this thread, would an interest free credit card be an option. This is how I managed to fund my track bike, Santander 18 months interest free on all new purchases. Just needed a plan, bought everything on the card I could then put the cash to one side. I would imagine your suppliers will accept payment by card and you get an interest free loan which you control to suit your cash flow. At worst you can get a balance transfer near the end of the period to switch to another card, just never forget to pay the minimum..

Just a thought.

[Dabz]

£4k is a very small amount to seek external funding for - you'd need to give away equity or show enough of a return for it to be worthwhile. At that level I'd be looking at funding through the banks (ask more than one, they might want to get your banking for themselves) or on a low interest rate card. There are plenty of small business loans available and the government are trying to loan more to businesses.