ActSeed is proud to be a collaborative partner with peerbackers.
Crowdfunding is becoming a popular approach for inventors and entrepreneurs to raise initial seed capital without incurring debt or giving up equity – a platform for essentially raising funds through donations from your own network and the crowdfunding community.
When you are trying to raise funds for your business or project, the task becomes much easier when you can demonstrate to your supporters that you are well-prepared to achieve your goals with the funding you seek. For this partnership, ActSeed has created discount codes for peerbackers users to join ActSeed’s Entrepreneur Group: “peerback11M” for a 10% discount on the monthly membership and “peerback11A” for a 25% discount on an annual membership.
Sally Outlaw and Andrew Rachmell, the peerbackers cofounders, are seasoned entrepreneurs and have successfully partnered in the past to create and produce “The Next Wave with Leonard Nimoy”, a TV series was devoted to exploring innovative technologies for both start-ups and existing companies. Below, we share some insights from Sally about her experiences while building peerbackers.
Q. Describe your “Eureka Moment”.
A. When I heard about the first-ever British soccer club funded via the web (ie., through many people paying a small subscription fee), I was hit with the idea that this “funding by the crowd” approach could work for small business. I knew the market opportunity would be huge as finding capital is the #1 pain point for entrepreneurs.
Q. How did you fund the company to its current state?
A. We funded the company in part through crowdfunding ourselves! We thought it was the right thing to do since we were building a crowdfunding platform and we wanted to have firsthand experience with raising money this way – in part so we could be in the best position to understand the requirements and to advise those using our service when we launched. The remaining dollars were contributed by us, the two founding partners, as well as a no-interest loan ($5,000) from an Advisor. We were fortunate also in that we worked out a payment plan with our web development company so we could pay over time as we built out the site so we hustled every couple of months to come up with that quarter’s payment.
Q. ActSeed champions the need for solid planning and preparation from the very beginning. How important is planning and prep to your company’s success?
A. There was so much planning that went into our site development & launch as we had to think through the architecture of the site including all the ways our users would interact with our platform, as well as what functionality we as administrators would need to manage the projects & financial transactions occurring through our website. Now that we have successfully launched, our ongoing planning has primarily been focused on how many projects we need to attract to post on our site & how we are going to attract them in order to hit our financial numbers. This planning has consequently led us to reach out to specific partners (Universities, Community Programs, etc) who work with the types of entrepreneurs we cater to so we could form mutually beneficial referral relationships.
Q. How long did it take to get your idea into the market from initial concept to first customer?
A. Being an under-funded, boot-strapped start-up, it took longer than it could have of course to go from initial concept to first customer – I’d put it at about 1 year. Our development curve was as follows: 3 months to fully develop the concept including research on industry & competition and financials, another 3 months to build a simple mock-up site & to crowdfund through it to raise some capital (the crowdfunding part was a 60 day raise), 4-5 months to design, build out & test the fully functional website and launch.
Q. What influence have the internet and new media had on the way you are marketing, selling and supporting your products/services?
A. Our venture would simply not exist without the internet and new media. It is because of the viral nature of the internet & social networking that our site, and crowdfunding in general, has ignited. Crowdfunding works best when you have a crowd (!) or can attract one using all the new media tools (we have embedded numerous sharing tools into our site for entrepreneurs to use to promote their ventures).
Q. Describe the challenges you faced as you built your customer base, including defining the customer target, establishing the right price and pricing strategy and of course, closing the first few deals. What wisdom can you share with other entrepreneurs?
A. Defining our target customer was easy – entrepreneurs needing capital – especially those needing $25,000 or less (and there are hundreds of thousands annually in that market). Our biggest challenge has been in finding the right sort of entrepreneur to use our service – those that are social media savvy, creative, and willing to promote themselves. Believe it or not, about 75% of those that submit to our site to post for funding never even follow through – either with registering, posting or promoting their venture on the site – which, as a life-long dedicated entrepreneur, I found very disappointing. I’ve heard the term “Wannapreneurs” and I guess that would apply here…meaning if you are not passionate enough about what you do to follow through, to shout about it from the roof tops and tell everybody you know and ask for their support, then I say stop now! We’ve started to overcome this obstacle (of getting the right customers) through creating strategic partnerships with those that already work with our target market. In terms of the wisdom to share question – I guess the biggest mistake I see is start ups declaring a huge target market but not indicating what % of that market they intend to capture and how. They will go to a VC and announce they are in a “40 billion dollar market” but then will not define what part of that market they can engage and explain the strategy through which this will be accomplished. So, I’d suggest knowing this before pitching!
Q. What techniques have you used to establish credibility in the eyes of customers, investors, partners, personnel and the general public?
A. I guess I’d say that we have established our credibility through our good customer service (led to great word-of-mouth and referrals), our relentless desire to help other entrepreneurs (as everyone can see how genuine we are in our efforts to support small business owners even when they are not our clients), and through the media attention we’ve received (for example being covered within 60 days of launch by both The Wall Street Journal and Entrepreneur Magazine). The technique we used for the media coverage was simply being scrappy. We did not hire a high-priced PR firm – I subscribed to HARO (Help A Reporter Out) as a source for journalists and built relationships with them, as well as I reached out to editors who were covering my topic (boot-strapping a business). Believe it or not – it works! (This is how we got covered by The Wall Street Journal – it started by an email I sent the editor).
Q. Have government, University, or other community / economic development programs been useful?
A. The most effective entities for us in this regard are the universities as we are beginning to establish working relationships with their business schools, entrepreneurial programs and clubs to offer their students and participants our funding solution for the ventures they are trying to launch.
Q. What is the most important thing people never tell you about joining or founding an early-stage company?
A. That you have to make everything happen. As an entrepreneur with a good idea for a product or service, you tend to think that the world is waiting for you…but they’re not. Getting going & noticed requires a constant investment of energy & resources…you have to have an incredible and endless amount of drive. Even on the days when you score big wins, you can often feel like – as you sleep – your venture is losing ground! BUT the good news is that with enough hard work & dedication eventually someone will hear about you and step up – whether it is an investor, an advisor, a media source, a big partner or customer and then your business can rock-n-roll!
Q. Is there anything else you’d like to share that we didn’t ask you in the questions above?
A. Find a co-founder (it’s hard working alone and you will need varied skill sets). Make something that people want.