PICNIC Festival Day 2: Crowdfunding 101
What happens when banks start crowdfunding? Arthur van de Graaf introduces Seeds Investment BV, supported by ABN AMRO.
“It's time the crowd gets to say yes or no”, says Arthur van de Graaf, an employee of ABN AMRO who recently started Seeds -- the world's first professional crowdfunding platform for sustainable entrepeneurs owned by a bank.
ABN AMRO doesn't decide whether the people promoting their initiatives on Seeds are good entrepeneurs. They don't decide whether their business cases look profitable enough. The bank only facilitates the platform. It makes sure agreements and transactions are alright. The only thing they ask from entrepeneurs is a little experience in social media, some networking talent and the ability to manage investor relations.
“As long as banks decide who is getting a loan and who's not, people keep following popular opinion”, van de Graaf states. As a side effect, risky projects don't have much of a chance. That's different with crowdfunding. The investment risk is low, since you get your proposed investment is refunded if the funding goal is not reached by a certain deadline.
Van de Graaf identified three crucial points for getting a project successfully crowdfunded:
1) Start by nurturing your first bunch of followers. We don't all need to be leaders; good followers rule.
2) Show me the money! Turn 'likes and shares' into actual investment, not by asking your fans if they are willing to pay, but by offering them a chance to get emotionally involved.
3) Manage relationships with your investors, as Return on Investment shifts to Return on Involvement.
Interestingly, van de Graaf hopes that once the crowd gives a 'go', entrepeneurs will return to parties they trust. So when funded with the help of Seeds, they can go to ABN AMRO for a loan after all, however this isn't mandatory. As banks are reinventing themselves and leave the selection of viable projects up to the actual customer, there can be no doubt about crowdfunding's significance for future business.
So why not become a partial owner of an innovative, creative, sustainable initiative yourself? The first funding round on Seeds ends September 24th, but keep your eyes open for the next round of projects or register to raise funds for your own amazing idea.
Contributed by Suze Krijnen