“Alone we do so little, together we do so much” – Helen Keller
Although the British food and drink industry continues to be tyrannised by the multi-million pound supermarkets, the once inconspicuous underdogs are biting at their ankles as public loyalties start to shift in preference of novel startups.
Where once the lure of ‘cheap convenience’ was enough to win over the British public, startup food and drink businesses are harnessing the power of a crowd as a means of introducing innovative products and services to a now forward-thinking market.
As interest grows in artisans, an increasing number of food startups are turning to crowdfunding for cash. In the last five years small-scale, indie businesses have received an outstanding following on crowdfunding websites such as Crowdfunder, Crowdcube and Kickstarter; all offering an alternative means for startups to raise vital finances.
Although supporting startups from a whole variety of industries, from retail to internet business, food and particularly drink remains one of the cash-raising platforms’ most successful categories. Whether it’s due to the industry’s healthy pool of forward-thinking entrepreneurs, or the public’s realisation that the food industry is in need of a drastic overhaul, funds of over £6 million were raised in a three-month period at the beginning of 2014, and has continued with the same pace well into 2015.
As a communal social initiative, crowdfunding relies on the public backing where the donor is either repaid in rewards, or with equity stakes in the business. This in turn leads to a unanimous desire for success between both business and donor.
Whether a community group, business or social enterprise, crowdfunding platforms’ ultimate goal is to realise unattainable expansion dreams achieved through community support and financial investment. Startups can opt to follow the traditional means of fundraising with platforms such as Crowdfunder and Kickstarter whereby investors are simply offered rewards in the form of product or services as a ‘thank you’ for their investment. Alternatively, investors can buy into businesses in which they see potential, owning pivotal shares in the project – this financial investment can be found on Crowdfunder’s sister company Crowdcube or similarly at Seedrs.
With an increased interest in long-term investment, Crowdcube recorded in July this year as having 214,877 investments, with investors donating a transformational £111,382,737. This subsequently supported over 300 businesses that would have otherwise remained pipe dreams. Not only does crowdfunding appear to help reduce the complexities of raising finances through conventional means, it offers startups the opportunity to grow interest and drive traffic towards their brand, often initiating exciting new retail opportunities from interested investors.
Words by Helen Upshall