Interview with Josje Damsma – entrepreneur at social start-up Jo Cadeau.
Josje and her team successfully crowdfunded for JoCadeau on Crowdaboutnow.nl. Crowdfunding model: loans. Amount raised: 35000 euro. Number of contributors: 100.
What resources did you approach to get financing for your project?
Apart from crowdfunding, we had one other resource at hand: our own investment. We are 5 founding members and together we invested 25000 euro at the very start of our business.
We decided to crowdfund a little later, for a specific part of our business: to launch the website, have our unique business design, as well as to create and implement marketing strategies. These were essential in making our business known to a wider audience.
Later on, we received a subsidy of 50000 euro from Stichting Doen for our sustainable business, JO Cadeau.
What made you decide to crowdfund and why did you choose Crowdaboutnow?
A while ago, my business partner and I participated in NewVenture – a business plan competition organized by government institutions in The Netherlands. This was a place where startups were advised on financing models. Many participants at the event said that our business – JO Cadeau – would be fit for crowdfunding. After the competition, it was Crowdaboutnow that approached us with a proposal to launch a campaign on their platform. We decided to give it a try.
Tell me how the crowdfund campaign was started and how the experience went. What were the biggest challenges?
The campaign started in July 2013 and lasted 2 months. We specifically chose that time frame in order to focus our attention on it. We invested 2 days a week for the campaign, which I think is a significant amount of time. Preparing the materials for it – the video, the pictures, the text – took a lot of this time and effort. One thing we did not consider before was that we would need to invest some extra money in flyers, a short film and other types of publicity for the crowdfunding campaign itself.
How has crowdfunding changed your perception about getting financed? Did your crowdfunding campaign have an added value except the money raised?
Yes, crowdfunding was definitely more than just raising money. First of all, one important benefit was the opportunity to test the business plan in front of the funders. Is our business idea easy to understand? Will people believe in it? Will they validate it with their interest and money? We had the opportunity to investigate these questions and receive feedback.
Second, we received media attention, which also helped create visibility and attract funders. For example, we had some interviews in national newspapers and radio channels because the business idea was so new.
Third, we framed our proposal so that people would be incentivized to become our ambassadors. We had 100 investors in our campaign. They had plenty of motivation to promote our business idea in their networks. That’s because they would benefit directly from it. Our service connects two target groups. On one hand freelancers, on the other hand people who could use the freelancers’ services. The latter category can go on JO Cadeau website and choose, for example, an hour of work from a freelance designer, and make that hour a gift to a friend they have, who needs a logo or a website. It was thus in the interest of investors (many who were freelancers choosing our services) to help us really kick off the project. To choose the right incentive for your funders is very important.
Last but not least, Crowdaboutnow – the platform we campaigned on – invited us in their business meetings. We even had the chance to meet with the Minister of Education and Queen Maxima, because we were a good example of how a creative, social business can successfully employ crowdfunding as an alternative financial model.
How would you describe the experience with the crowd? Did it change anything about your project (production, concept, or your expectations about it?)
We used the loan model of crowdfunding, which means people gave us loans with approximately 3% interest per year, that they will receive back in 4 years. I would say that ⅔ of funders were already in our personal network and ⅓ were investors not in our immediate network. We also had one big investor we didn’t know beforehand, who invested 5000 euro in our idea.
I think the project was successful because we had a lot of investors and we raised the amount we set out to. In this sense, the crowd really validated our idea and we knew after that people are interested in what we want to offer. However, we didn’t change anything about the concept and functionality.
What were the difficulties you encountered? Did any aspects of crowdfunding make you feel uncomfortable? Why?
We did feel uncomfortable about asking money also from our friends and family. This makes us reluctant to crowdfund again.
How do you feel about having your campaign on the platform: did the possibilities (for sharing, for uploading, for engagement with the public) fit your needs?
We did not have any difficulties in this sense. However, we did feel like we crowdfunded more on Facebook than on the crowdfunding platform itself.
How many people you know are also crowdfunding?
I think I have seen at least 5 people in my network crowdfunding recently.
Where there things about crowdfunding you wish you were aware about before starting it?
Yes. I wish I had some advice on how to communicate the project more clearly.
On the team level, we afterwards wished we had focused more on branding ourselves as a social enterprise, which we are, rather than being a profitable business, as Crowdaboutnow suggested.
All in all, we invested much time and I think crowdfunding would be very difficult to do on your own. Luckily, we were a team of 5.
Would you crowdfund again?
No, we would not crowdfund again in the immediate future. We don’t want to ask our close friends and family for money again. Furthermore, the time required is too much.