What is Crowdfunding?
Over the last decade, the progression of technology has equipped entrepreneurs with inexpensive tools to convert their ideas into successful businesses. Due to social media, companies have been able to build large, overnight tribes of customers and product champions.
Though an early-stage company should prioritize bootstrapping as its means of financial sustenance, for some, this is not always a viable option. Converting some ideas into businesses can be capital-intensive, particularly those dependent on expensive production and R&D.
A crucial step many entrepreneurs are skipping is the market validation stage. When you’re low on capital, you become more efficient with resources and utilize all tools at your disposal to make the business succeed. When you’re still figuring out the vision of the company, building the prototype and testing the market need, the last thing you need is external pressure and exertion of control. During the early stages of a company, utilizing resources efficiently is vital for survival and raising money from investors or applying for grants can become a huge distraction.
This is why entrepreneurs are exploring alternative finance models – in 2015 the crowdfunding market grew to £3.2 billion (NESTA). Crowdfunding brings together a group of passionate supporters to fund a project that they believe in bringing to life. Launching a rewards-based crowdfunding involves putting together a 30-day online campaign comprising a video pitch, high-quality product shots, details on traction, business model, team and press. The campaign is used to secure pre-orders and sales to assess the demand for the product. Running a campaign with a deadline means you have a chance to create urgency around your product and/or service to sell your idea to customers. If you meet your funding goal, you get to turn your idea into a business and if you’re unable to meet your target, you now have direct feedback from the market giving you the opportunity to refine and launch again.
UpEffect, a crowdfunding and support platform for social good products that are addressing today’s greatest challenges. What this essentially means is we help aspiring founders with purpose-driven ideas, raise funding and take their product to market.
We look for three things in our companies: the business model, founder credibility and how they measure their impact. Selected companies then benefit from our network of crowdfunding experts, social entrepreneurs, marketers and much more to help them convert their idea into an UpEffect crowdfunding campaign.
Are you a charity?
No, we are a purpose-led profit organisation, more importantly, we are a social business. Everything we do is focused on creating sustainable social impact and profit helps us achieve this through growth and scaling.
What makes UpEffect different to other crowdfunding platforms?
Over 50% of crowdfunding campaigns fail on the major platforms, particularly niche campaigns as there are thousands of mass-market products launching at one time. To help social entrepreneurs effectively utilise rewards-based crowdfunding, we have analysed the market data and built a platform optimised for campaign success.
We believe these entrepreneurs need a cultivated space to bring their ideas to life. Due to our selected niche, we attract supporters that believe in the power of a creative and entrepreneurial generation - a community you will not find on any other crowdfunding platform.
To create a sense of urgency around the live campaign, we implement an all-or-nothing model, which helps set targets and also offer protection to funders so that project owners are only able to collect their funds once they have met their minimum-funding goal. This means that entrepreneurs are continuously motivated to ensure they succeed. This is also a good way of building credibility for supporters as funders are more comfortable supporting an idea that they know project owners are serious about making a reality.
As a social organisation dedicated to elevating community development, we believe in complete transparency. Revenue helps us to ensure we are able to deliver for our beneficiaries in a sustainable way over a long period of time. For this reason, when a project is successfully funded, we apply a 5% fee to the total funds raised. There are no costs for set up or creating a project.
Supporters will only be charged the amount they have opted to pledge for the project.
Stripe is the most widely used merchant platform for crowdfunding and is well known due to its reputation and security. We want our funders and project owners to feel comfortable when exchanging money, therefore we make the best technology available to you.
Fundraisers will need a Stripe account with a good standing to set up a campaign. Funders won't need a Stripe account but will need valid payment details.
Who are the project creators?
Our project creators are social entrepreneurs who have set out to positively change the world through business. We are big believers in the creative talent that this group has to offer to the social enterprise movement, therefore we provide them with a platform to bring these ideas to life.
What type of projects can I post?
All projects must be intended for social business purposes i.e. should be focused on elevating community development by creating social or environmental impact.
The funds being raised should be for turning your idea into a product or a service.
What is your project approval criteria?
We review projects based on the following criteria:
- Evidence of the social problem you are trying to address
- Your project must be financially sustainable
- A compelling story
- Your goals and rewards must be realistic and viable. You are not allowed to offer equity, stock, loan, lotteries or raffles.
- Your credibility as a project owner
- The credibility of your team. Do you have the skills to deliver on what you're promising to your funders?
- Are you dedicated to making the campaign a success?
More on our criteria is available here.
Who owns the project?
Creators of the project have full ownership of the project. All pledges being made are in support of the project, not UpEffect. These projects are the independent creation of our social entrepreneurs. There is no equity involved.
What type of support do you provide?
We work very closely with our users from the very start of the project all the way till the end of their campaign to ensure project owners are optimised for success.
Can I raise funds for charitable projects?
No, there are some excellent crowdfunding platforms already in the market that accommodate fundraising for charity projects. Our intention is not to compete with them.
We advocate financial sustainability for businesses, therefore your idea must demonstrate how it will generate revenue and sustain itself.
How much can I raise?
The minimum funding requirement is £10,000. There is no maximum crowdfunding requirement on UpEffect.
What is the project creator's responsibility?
To maintain the quality of projects on our platform, all projects go through an approval process and depending on the quality of the campaign, we will decide whether your project is suitable for our platform. This helps us to ensure a high success rate of crowdfunding campaigns.
Potential funders might contact you for more information on your project from the 'contact me' button allocated on every project page.
I’ve submitted my project but I can not see it online
When you submit your project, it does not go live immediately. A UpEffect team member will contact you to discuss any areas of improvement which will help you raise as much funds as possible. We will work with you to ensure your project is ready to go live.
What country do I have to be from to start crowdfunding?
Anywhere in the world that allows you to use Stripe.
Who are the supporters?
Supporters are people like you or us who believe in a creator's idea and want to bring it to life to create positive change in the world.
Supporters pledge for a project and in return you get to see the social impact your investment contributes to as well as benefit from rewards offered by the project creator.
Your investment in UpEffect projects will generate an invaluable return: social change and impact in local and global communities.
What are rewards?
Rewards are incentives for funders. The better the quality of your rewards, the higher the chances you have of securing funding. This is a great way to get pre-orders for your products and services. Be as creative as possible!
We advise that you offer reasonable rewards that you are confident you will be able to deliver.
How can I contact you?
We are always excited to hear from our social entrepreneurs and supporters! You can contact us at firstname.lastname@example.org We aim to get back to all emails within 48 hours of office hours (9am - 6pm GMT).