Will the crowd help us Engineer a better way of working?
At EngLancer, we are passionate about looking at how we can work differently to achieve our goals. We are always looking at best practice, as well as current innovation, across all industries to see if we can improve our approach to engineering or our wider working procedures.
It’s perhaps not surprising then that we have chosen crowdfunding when looking to secure the seed funding that will allow us to accelerate our MVP outsourcing engineering platform.
Why not check it out and tell us what you think?
What is crowdfunding?
Crowdfunding is a practice that enables you to fund a project or company by raising finance through a large (potentially) number of discreet investments, from multiple individuals or organisations. People in the industry often refer to it as “the democratisation of investment”. Put more simply, it allows all of us to invest in the companies we believe in, we buy from or we want to be a part of.
Why is EngLancer doing it?
As a start-up we see real benefit in raising finance in this way. Here’s why:
1. Synergy with the EngLancer principles
Traditionally, a company’s ability to raise finance was restricted by the size of its network and – more often than not – geography. Crowdfunding sites have though revolutionised the ability of companies like us to access investment they may have previously missed through the use of technology. EngLancer is trying to do the same for the engineering design industry by allowing companies to find the best talent regardless of their geographic location, or their existing supply-chain/ professional network.
By pitching on a leading crowdfunding site, your project gains huge exposure to a wide spectrum of investors. Even the process of pulling your pitch together adds value to your business plan. It makes you look critically at your product, your market and your offering. By putting yourself in the shoes of an investor (large or small) you are forced to make sure the business plan is answering as many of their questions as possible.
Further, a major challenge for start-ups like EngLancer is to be able to properly identify and assess all the holes (potential and actual) that the venture might have at an early stage. Through the crowdfunding campaign however, the entrepreneur has the ability to engage an audience of (potentially infinitely) experienced investors and business experts. Through the process of receiving the comments, feedback and ideas from the ‘crowd’ we believe we will be able to strengthen our business by reviewing/defending the potential strengths, weaknesses, opportunities or threats raised. Essentially we are crowdsourcing to research if we can improve our product, as well as potentially learning more about our customers.
3. It’s all or nothing
A business mentor of mine once gave me some very sage advice. “People will always try and spend your money for you.” Sadly, this is as true for raising investment as it is for any other aspect of business. Whether it is to pitch your idea, gain access to potential investors or just the marketing costs involved, the money soon mounts up and for a lean start-up like EngLancer, this can be deadly.
On all or nothing crowdfunding platforms like Seedrs though, a business only gets the funds raised if it reaches 100% or more of the funding goal. As such there is no fee to participate. If an entrepreneur sets a goal and doesn’t reach it, there is no penalty. In this case, all the funds are returned to each contributor, the company doesn’t get any money and neither does the platform. On the other hand, if the fundraising project is successful, everyone wins and gets to be a part of a successful (hopefully) project. Even in the worst case scenario though the invaluable feedback, comments, ideas and critical review however cannot be returned.
There is again real synergy with the EngLancer ideals here. We only make money if the work sourced through us meets its initial scope. Both platforms therefore create true meritocracies, with their procedures ensuring quality and that the strongest companies/ individual will thrive.
4. Getting on our soapbox
Pitching on a crowdfunding platform will also give EngLancer a great amount of exposure. The PR, the re-tweets and potential news articles will add real value by creating brand awareness for the company. In addition the Seedrs platform provides the opportunity to not only sell our product but the story and philosophy behind it. Potential investors are of course also potential customers. These people will definitely be more receptive to hearing about our vision and passion while watching the pitch video at their convenience, as opposed to taking a sales call from a member of our team when they are desperately trying to get their latest engineering project out of the door. The beauty of this process is that, subsequently the investor then potentially also becomes inherently part of our sales team, sending a link to their colleagues and freelancers to ensure a return on their investment.
5. Social proof
If we achieve our funding total, it will have generated a large degree of ‘social proof’. This will be hugely valuable and persuasive when we go forward to our potential clients. It essentially shows that other people believe in what we are doing. That is, it further demonstrates a market and a demand exists.
6. It means we play by the rules
The capital raising process and the regulations surrounding private startup offerings are difficult to navigate and because of this they present a risk to the business. We felt it was essential we stay within the boundaries of regulation. Equity crowdfunding helps manage these protections for both startups and investors. They are experts in this field and are heavily regulated. Because of this the process of meeting all the necessary requirements for selling equity becomes affordable and streamlined.
As our pitch offers “Come and help us re-engineer the way we engineer”