Entrepreneurs trying to bring their big ideas to life often take the crowdfunding route. Debuting your product on a large platform while gaining the support of potential long-term customers sounds like a no-brainer strategy. However, although crowdfunding seems to be a great and easy route to generating funds for a new company, there are many challenges along the way that most people do not stop to consider before taking the jump.
The 2015 Canadian Crowdfunding Summit, which was hosted at MaRS on March 3, looked at all of the different factors and channels of possibility involved with crowdfunding. Covering everything from investments and lending to product development and online models, the full-day event also featured panel discussions, mentor sessions, keynote speakers.
One of the speaker sessions, “Top 10 Risks of Crowdfunding and How to Navigate Them,” focused on the risks involved with crowdfunding and addressed the crowdfunding journey from initial development and planning to post-campaign considerations. Speakers at the event included Gimmy Chu, co-founder and CEO of Nanoleaf; Neil D’Souza, co-founder and director of operations at Mass Fidelity; and Robert Wakulat, who specializes in social enterprise legal services at Wakulat Dhirani LLP. The speakers detailed their experiences with crowdfunding, discussing problems they had dealt with first-hand as entrepreneurs taking their products onto crowdfunding platforms such as Kickstarter and Indiegogo.
Despite the warm reception that both Nanoleaf and Mass Fidelity received throughout their crowdfunding campaigns, they both met some challenges along the way. Gimmy Chu described how his company successfully launched two Kickstarter campaigns, but not without some hiccups.
Nanoleaf’s first campaign was very successful from the outset, receiving a significant amount of funding within the first few hours, but the company was unsure of how to fulfill all of the orders it received. Manufacturing and fulfillment are two key factors that many company founders do not consider during the initial setup of their businesses. How quickly and successfully a company gets its product to its customers says a lot about the company itself, as it essentially builds the brand reputation and establishes consumer relationships.
One important success factor that the speakers agreed upon was being resourceful. It’s common for budding entrepreneurs to lack resources such as industry contacts and capital, but these are easily resolvable issues. Neil D’Souza mentioned the initial exposure Mass Fidelity received from his reaching out to his personal network, connecting with friends and family members to announce his new product. The panellists also agreed that an initial video campaign is very important for gaining exposure, especially in today’s world of social media.
“We didn’t have the money to hire a video production company, so we decided to just shoot it ourselves and had to think outside of the box. We actually ended up pre-recording the audio and lip-dubbing it later for better sound quality,” said Gimmy.
Hosted by the National Crowdfunding Association of Canada, an organization focused on crowdfunding assistance, regulation and education, the Summit offered a space for emerging entrepreneurs and experienced professionals to foster new ideas with key advice and tested results. The event also featured a pitching room, which allowed startups to pitch their companies to industry experts and potential customers. The winner received a package that included services such as media coverage and support.