My crowdfunding adventure!
Today I would like to write an article about how we managed to get expansion capital for Ludejo. As most of you know: we started from scratch last May. Ludejo is born out of the idea that better business actually can be done if we make knowledge and information available in many different ways to everyone, regardless of education level, (cultural) background or native language. We like to achieve this with an enthousiastic team that believes in fair business practices. We translate, localize, transcreate, train and provide our customers with e-Learning. With an open mind, free. Ludejo means: ‘open space to play’…
The first 3 months: May, June, July 2017 have been about sowing. In August we were already harvesting!
Like many other entrepreneurs, I have spent a lot of time thinking about how to make the right strategic moves. Deliberate decisions aren’t quickly made and of course other people were depending on me. So I could choose anything I believed in, as long as it was a wise decision. No pressure at all.
I started Ludejo with my own money. I didn’t get a loan, I didn’t opt for a start-up capital from a bank. I can almost hear you thinking: “Doesn’t she see the risks?”. And he answer is: “yes I see them”. I only think that genuine entrepreneurship, with a clear and heartful mission, is about: going into this 100%. If there is still some fear left, it would limit me and thus the company from growing. I kind of ‘jumped from a cliff’ and sensed the enourmous freedom of flying in the open air, my wings spread out.
The thinking process lead to the idea of raising expansion capital, to have some extra months to become more solid. I decided to try crowdfunding to raise the expansion capital. I think within the localization industry (where all the translation and localization companies are part of) no one ever did that before, so I had to pioneer. I had several calls with a well known platform in the Netherlands (where we are based). And started writing my pitch, collecting information to share with them. I first had to convince the platform owners about Ludejo’s mission.
It’s not common to raise capital through crowdfunding for a company in the localization industry, but… it is possible (so I now know)!
Why did I want to try this? I’m not sure about other company owners and entrepreneurs, but whenever I talk with a bank about them being a service provider for me for expansion capital, I feel treated as if I were a criminal. Because the banks have no real idea in general about entrepreneurship, they also have no idea of what we really need. What we don’t need though, is that they keep talking about paper X, paper Y, signing here and there and everywhere and then the time consuming waiting for their systems to approve the figures. No need to listen to us at all. At a bank the system is leading. Something goes in and a ‘Yea’ or ‘Nay’ comes out. Based on how much fear is integrated into the system by the parameters they have set. This bureaucratic system based on fear could’nt be part of the fundament of my company which is based on the opposite: love. So I wanted to choose something else. As an experiment. Crowdfunding.
This bureaucratic system (of a bank) based on fear could’nt be part of the fundament of my company which is based on the opposite: love.
What is needed for crowdfunding through this platform?
- a good story
- an overview of what you expect in the coming 24 months; where are you heading with your company?
- a cash flow overview and an explained business model
- a pitch (to be posted on the platform), with pictures and video (to be found on our facebook and instagram page)
And then the big day was there: September 12, the pitch would go online… I was excited, so was our Marketing Manager, Andrew, who worked out the pictures and the video. Before going online I asked my contact person of the platform: “how many days will be have to raise the amount?”. He said: “60”. I was hoping this would be enough (because in crowdfunding it is all or nothing).
The pitch would go online around 3 PM. I sort of ‘forgot about it’, because I was working on a large project together with our Project Manager Suzanne. Around 5 PM I got a call from Andrew. He said: “Are you watching the progress of the crowdfunding?”. “Eh, no…”, I said. He: “Please do, it is like watching a rugby game, so exciting! Every time I refresh a few percentages are added” Not really knowing what he exactly meant by that, I picked up my phone and saw this:
In total we needed 3,5 hours to raise 100% of the amount requested. It was amazing.
No pittfalls? Yes. One. Make sure you choose your own notary’s office for the transfer of the amount and don’t use another one chosen by someone else (for example by the platform you work with). Unfortunately I didn’t work with my own notary’s office and had to pay for example 500 euros for 3 short phonecalls they made. My own notary would never éver calculate something like that to me. (Because they still like me to be their client a next time as well). Almost 200 euros to fill out a model (full of mistakes), etc. So please take that advice from me: never work with another notary than your own choice! A good notary knows that you’ll be loyal to them if they provide you with good service, wise advises and fair prices!
The psychological effects of crowdfunding: the fact that a crowd believes in you is a totally different feeling than if a bank would allow you to get a loan.
So now I take a chance to say to all the investors: A BIG THANK YOU! We are working very hard at the moment to realize the plan(s) we made and help this company grow. Without your help and support this wouldn’t be easy.
About the pictures in this post: with a small budget and the wish of having a few good pictures with Ludejo’s team, we bundled everyone into cars and drove to a nearby popular Swedish furniture store. The Guerrilla photo-shoot, (even if we were tired at the end of a long day), was good fun, and we think the results perfectly capture the spirit of Ludejo!