10 things crowdfunding investors want most from digital media investments

Tim Brundle presenting at Culturetech

There was a lot to like about last week’s CultureTECH festival held in Learning Pool’s hometown of Derry.  So typical of Derry that our city’s event managed to combine both culture + technology.  Many attendees agreed it was the culture element that elevated the festival way above the millions of other web summits that every man, woman & dog hosts.  A lovely taster of some of the magic we expect to see for 12 months during 2013 when Derry becomes the first ever UK City of Culture.

I enjoyed listening to many of the speakers on Friday (especially Andrew Dubber (who advised us to invent the future rather than trying to predict it), Fiona McAnena, Sir Nicholas Kenyon and of course lovely Ben Hammersley) but the speaker who gave me the most insight into one of the topics I’m most interested in was Tim Brundle.  Tim is Director of Innovation at the University of Ulster where over the past few years he’s made investments of between £5k & £328m in over 60 tech companies & seen returns on investment of 0.8x to 42x.  I suppose what I’m trying to say is that he knows what he’s talking about.

It’s a well known fact that everyone suddenly wants to be in digital.  According to this presentation, by the end of 2011 87% of the top 100 VC firms had digital media funds or portfolio investments.

For the purpose of this blog I’m going to share with you the 10 things Tim believes people investing through crowdfunding schemes are looking for in digital media investments.  While Tim was talking I thought about our own company and how attractive we would have been starting out if we’d been scored against these criteria.

  1. Business Model is first up and most important – people want to believe that they’re going to get money back.  Giving thought to your business model & revisiting it from time to time is something every business should do & I’ve written on this topic before.  For new businesses and teams seeking investment it’s incredibly important to spend time getting it right as a small change in your business model can make big differences in the shape of and priorities within your eventual company.
  2. Location – most people seeking a project to invest in via crowdfunding look for something that’s local to them.  With the internet I’m not sure why that would be.  Even if you’re close by you won’t be able to influence what they do – but I guess it’s something to do with local knowledge & familiarity.
  3. What Tim calls True Grit in a team.  I heard him say a few times during the course of the day that early start up success does not necessarily guarantee success in subsequent ventures and because of this crowd fund investors want to try out with newbies.
  4. Goes without saying investors look for a Smart Idea.
  5. More interesting is that they look for an idea that will generate a Big Splash.  This means something that people think can be rolled out quickly, catch on fast & generate rapid user adoption.
  6. Investors look for a product that is Beautiful – doesn’t everyone?
  7. Kentucky Windage – a term which originated in rifle shooting & is about compensating for your shot when using a hinky shotgun by trying to second guess where the bullet is going to go.  In this instance it’s about how people try to second guess what the route to market of a new product is going to be.
  8. Personalisation – people base attractiveness of the investment around what the product or idea means to them, how it appeals to them & how they imagine use of it would enrichen their lives.
  9. The product itself is quite low down in the list of considerations but crowd funding investors are interested in whether or not it appears to be Authentic and Real.
  10. The last one I like.  Does the idea or product have a Future & Enduring appeal.  Tim told us the well known story about Zhou Enlai’s take when asked about outcomes of the French Revolution 200 years earlier – of course he believed it was “too soon to tell”. 

I’ll leave you with this pic of Tim & me taken on Friday night after a fabulous day at CultureTECH.  We’re very lucky to have someone like this in and around the Northern Ireland investment scene and so accessible to companies starting out.  I know Tim has been a great help to many fledgling startup tech businesses and like me, he love, love, loves to see teams pitching.

I’ll finish by expressing my thanks to Mark Nagurski and the entire Digital Derry Action Team for giving us such a great event last week and for sealing the exciting twinning deal with London’s Tech City.

3 comments

  1. Nice roundup of a good talk. I would hope that location would be, as you say, much less important in the modern day but ultimately an investor can find all the deals they want within 50 miles of their home so why go any further. And there are no funds of scale here in Northern Ireland so this says that startups need to leave if they want to secure growth investment. Chilling.

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