Crowd funding is pretty new to most people so I figured it would be helpful to try to explain the concept a little…and give a few details of how we will be using it.
What is crowd funding, in a nutshell?
Crowd funding is a method of raising a relatively small amount of money from a large number of people to reach a predefined minimum investment level, in a predefined time, so that a project can proceed.
There are a number of ways of doing this but the simplest is to offer predefined pledge tiers for which backers receive rewards (rather than equity in the project) and the satisfaction of knowing they were instrumental in getting the project off the ground.
How will that work with The Bicycle Academy?
We will be attempting to crowd fund TBA over 30 days by pre-selling course places and other limited edition goodies, then using the profits to pay for the workshop equipment.
People who are keen to see TBA get going will pledge towards the crowd funding campaign, either by pre-booking a course place or choosing another pledge amount with a different tier reward.
So, what different pledge tiers (and rewards) will there be?
This hasn’t been decided yet but they will be something like this…
Pledge £20 and get a hand printed commemorative TBA T shirt, and a thank you letter.
Pledge £50 and get the above + a commemorative TBA musette.
Pledge £150 and get the above + a hand made mini TBA bicycle frame.
Pledge £500 and get the T shirt + musette + a 20hr evening frame building course.
Crucially the rewards will either be better value than if bought outside of the crowd funding attempt (the courses), or exclusively available to backers of the crowd funding attempt (the T shirts, musettes and mini bicycle frames).
Will there be a limit on the rewards?
Well everyone who pledges will receive their tier reward if the target amount is raised.
Although we won’t limit the availability of most of the pledge tiers we will cap the number of courses that we pre-sell to 6 months worth as we think that this is a reasonable amount to commit to and deliver. So if you’re eager to get involved you’d be wise to pre-buy your course place during the crowd funding campaign to be one of the first.
What if the target amount isn’t raised in time?
The project must be fully funded by the end of the 30 day funding attempt or no money will change hands. It’s all or nothing.
Why all or nothing?
1. It’s less risk: We need around £30,000 to equip the workshop, but it’d be pretty tough having £20,000 and a bunch of people expecting us to complete the project so that they could get their reward. Similarly you’d be pretty annoyed if you’d invested £500 on the basis that you’d receive a frame building course but we couldn’t follow through. This way; either we get our workshop and hence you get your reward, or you keep your money and we have to try another way. Backers simply can’t lose.
2. It motivates everyone: If you want your reward, and to see The Bicycle Academy come to life, you’ll help spread the word and so will we, of course.
What happens if we exceed the target amount?
We keep on fundraising until the 30 days is up, everyone receives their rewards and we get to invest more money into The Bicycle Academy.
Why not pay for it ourselves or get a loan?
We need around £30,000 to fund the purchase of equipment for the workshop so that we can start to provide courses and make the space available for TBA graduates to begin their own frame building projects. Although we’ve got this far we don’t have enough money to take the project any further, and aren’t very keen on borrowing from the banks BUT we think it’s a great idea that can be realised with the imagination and support of our eventual customers and fellow riders (that’s you) !
When will the crowd funding attempt happen?
We will be making a 30 day crowd funding attempt in October 2011, giving us enough time to raise as much awareness as possible, and giving you enough time to find out more about the project and put some money aside if you’d like to support it.
Are there any good examples of other crowd funded projects?
Absolutely, many people have heard of crowd funding because of websites like kickstarter.com that have made headlines with some pretty amazing success stories like the TikTok ipod nano watch kit that raised almost a million dollars in just 30 days! Sure that’s an extreme example, but its a good way of illustrating how well crowd funding can work.