A guest post by Jonathan May @hubbubnet.
On the morning of launching their own crowdfunding campaign, Jonathan May, CEO of Hubbub and long-standing client of The Social Change Agency talks about why they decided to take their own medicine when it came to raising finance for their social enterprise.
In case you haven’t realised, Hubbub is crowdfunding. This blog sees the launch of our 3-week campaign to crowdfund our own investment.
Hubbub builds fundraising communities. We connect projects to people and empower organisations to develop and strengthen the relationships they have within their communities and supporters. Our core product is a crowdfunding platform that can be branded and operated by schools, colleges, universities and non-profits – bringing the engagement and interactivity of Kickstarter or IndieGoGo to sectors where fundraising and communities really matter.
And now it is our turn.
We’ve built a great product and an even better team, and we are now looking to expand. We’ve explored a variety of ways to raise investment, and crowdfunding using equity is a great fit. After all, what could be more perfect than a crowdfunding platform crowdfunding itself so it can provide more crowdfunding platforms?
What is equity crowdfunding?
Equity crowdfunding is like any other ‘angel investor’ round, except the fundraising is open to the public, and anyone can put in as little as £10 and as much as tens or hundreds of thousands of pounds. It seems the obvious way to fundraise for Hubbub.
There’s a huge opportunity in the UK higher education fundraising space. Just 1 in 50 UK alumni (former university students) give back to their universities in any given year, but between them they give over £750m. We believe that by leveraging the power of crowdfunding as a means to sourcing inspirational campaigns and providing the key reasons to give, we can increase this participation rate, as well as lower the fundraising costs for the existing market and other sectors such as the charity sector.
Globally, the market is staggeringly large – over $8bn is given to US universities by their alumni every year. Whilst engagement rates are higher – around 11.4% – online fundraising still represents less than 10% of total giving.
Our goal is to change this.
But like the projects on our site, we need money to scale up. The business has been picking up considerable speed. Not only is the University of York’s site doing excellently, but we now have 6 live platforms and we’re expecting to have another 10 live soon. We are generating revenue through the sales of our software, we’ve launched our email to social campaign tool with great success and have serious interest from other non-profit organisations.
Why are we doing this?
We want to get on with growing the business, growing sales and growing revenues – and do so quickly and efficiently. Crowdfunding opens up fundraising opportunities to friends and family, advisors, customers as well as the more experienced investors who are already interested in participating. But more importantly, we want to raise money through crowdfunding – as opposed to the traditional venture capital route – because we fundamentally believe in fundraising in a positive, open, constructive and supportive way – in a way that involves the friends, family, professional contacts, customers and stakeholders in our business. I mean, that’s why we started Hubbub to begin with. It’s a no brainer.
More importantly, we spend hours advising people and organisations how to crowdfund. We want to walk the talk and we know that this experience will enable us to be even better at supporting our customers.
We feel privileged to be supported by a pretty awesome network. Raising money from ‘the crowd’ is not really any different to raising money through a friends, family and angel network or existing investors, except that it’s done publicly in a way that is easy to share and show to people around you. It widens the pool of potential supporters and investors. There is significant business benefit to involving YOU, and the wider Hubbub community, in the process of fundraising. We don’t just want to raise money, we want to raise a network and a community of people who want us to grow and scale – we want people to share what we do with the world, and to bring us new leads, new opportunities and new business.
Finally, we want to protect our stakeholders and our long-term mission. To date, this network has stuck with us and believed in us for three incredible years. Several of our student network and university customers have even asked to invest. We want to give everyone an opportunity to be part of our journey.
Our mission here is to create the world’s biggest philanthropic network – the team, technology and strategy are ready to make that happen. Now we want both the cash and the support to help make it a reality. Will you join us?’