In conversation with Karl McCracken, Growth Hub Connector at the North East Growth Hub, about Crowdfund North East LEP
'Why I’m really excited about the North East Local Enterprise Partnership’s Crowdfund North East LEP campaign'.
The general idea with crowdfunding is that start-ups with whizzy new product prototypes raise the money for production tooling by getting a whole bunch of customers to pre-buy the product, or become small equity investors. Crowdfunding is also used by charities raising funds for specific projects.
But the North East LEP’s scheme is a little different. And obviously, by different, I mean better! It’s aimed at established businesses and the LEP has committed one million pounds to match pledges made by customers. (Small print: You still have to work to make those sales; the LEP’s contribution is capped at £5,000 per business.)
Effectively this is a double-your-money scheme, which makes it a pretty awesome deal. Several of my North East Growth Hub clients are taking part and interestingly, they aren’t businesses you’d normally expect to see doing this sort of thing.
Tom Webb, founder of Estate Tea Co, has been importing exotic teas since 2015. To begin with he focused on trade sales and supplied high-end cafés and department stores, but in 2018 he opened a tearoom in Gateshead. He’s now outgrown that and was on the cusp of moving to Heaton when lockdown started.
Estate Tea Co.’s crowdfunder provides a way for Tom to reconnect with his customer base. He can re-open his business with a fan-fare and raise the funds he needs to fit out his new premises. Customers can choose from over a dozen different things to buy – from a cup of tea and a slice of cake at 10% off, right up to private parties and beyond. Along the way, he’s developed new skills in marketing, and has produced promotional videos and some great social media content. And all that must be good for business.
So is crowdfunding right for your business? If you’ve no more than ten full time equivalent employees, and sell products or services to the public, I really think you should take a look at Crowdfund North East LEP.
It could be the start of a whole new way of thinking about your business, and a great way to get going again.
Karl McCracken is a Growth Hub Connector at the North East Growth Hub, providing one-to-one support and advice to North East businesses looking to access business support and finance and funding. For more information visit www.northeastgrowthhub.co.uk.
For more information about Crowdfund North East, visit www.crowdfunder.co.uk.