The original plan wasn’t to turn the DRI into a fully fledged company straight off but to just throw out a helpful little app into the international startup community for a relatively low outlay. Without trying to run before walking, DRI has set itself the objective of seeing how cheaply It can launch by bootstrapping as far as possible. There’s no need to give away equity and courting investors at this stage would be both lazy and foolish until some form of business case had been proven. Until there has been any degree of meaningful validation achieved, DRI will hold back from approaching investors and has set out to find ways of accessing minor development capital (free money) without giving away equity. For the time being, this rules out approaching accelerators, or taking out a loan. The following Forbes article details why you should consider not taking VC money and the arguments are kind of the same for DRI, even at the seed stage:
My first experiences with crowdfunding were about 2 years ago when this new form of financing was just starting to hit the headlines. In my deal brooking capacity, I thought it might be a good idea to set up a deal arrangement with a crowd funder. The only significant UK player at the time was CrowdCube and the idea was to shove a few of the smaller deals I got from time to time, over in the direction of CrowdCube. A year or so later one or two others started popping up such as Seedrs and it was in my time as director of Keiretsu Forum London that I came across CrowdBnk, who were themselves looking for launch capital. As DRI started taking shape I started to research the different types of crowdfunders activity and saw that there were mainly three types. Firstly, ‘equity’ based crowd funding (the main players being Seedrs & CrowdCube), secondly were the donation based sites, where pledges or ‘donations’ are given usually to charitable, social or media focused causes (IndiGoGo) and lastly there was ‘reward’ based Crowdfunding where product rewards are exchanged for a fee. In a way, these rewards can be viewed as pre-launch or early sales revenues, with the additional bonus of achieving free marketing. It was therefore a no-brainer for me to explore reward based crowd funding and the current biggest UK operators for this are CrowdBnk. If you are considering crowd funding then the following link might be helpful: www.startups.co.uk/which-crowdfunding-platform-should-i-use.html
My experience with reward based Crowdfunding is that it relies less on how many investors are ‘signed up’ with the Crowdfunding website but more to do with the degree of marketing prowess that do or don’t posses. You need to be pre-armed with a planned series of ready & waiting marketing activities. I was still getting some of my marketing ducks lined up and approached it a little earlier than would have been good. My experiment with rewards based Crowdfunding can be seen here: https://www.crowdbnk.com/p/d-risk-it. At some point in the future I plan to also try and display on Kickstarter (which has the largest international footprint), as well as the interestingly configured AppsFunder.
Like to share your recommendations or experiences?