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Espresso of Innovation: Start-up Saviours

By Martin Talks, global digital lead, president digital UK
Hello and welcome to this week’s Espresso of Innovation; a roundup of the hottest news and strongest stories from the world of creativity and technology filtered into a quick shot of inspiration. This week we’re talking about ‘Start-up Britain’: to misquote Doc, "Banks...where we're going, we don't need banks." - Back to the Future
Ever had a great idea as an individual or a business and wondered how on earth you are going to fund it? Banks not playing ball? Well help is at hand. And it is coming from you and me. Through crowd funding platforms anyone can contribute to the funding of projects, even if they've only got a few £s spare. It's another area where the world of finance is changing through digital innovation. Estimates suggest more than £1 billion was raised globally through crowd funding last year.
Crowded House
Probably the most famous of the crowd funding platforms areKickstarter, which launched their UK site at the end of last year and has just released its iPhone app, andIndieGoGo. It is the biggest website for funding creative projects. It has an all-or-nothing model where no money is released if the proposed monetary goal is not reached. However, it is more a pre-selling site than a search for a business partner. You pledge a certain amount, and in return you get a reward: either the product or something else, likeafternoon tea with a kitten ora date with a film star. It’s a one-time transaction.
There are now also a plethora of more niche fund raising sites:
Spacehive allows you to transform where you live by funding public space projects. The site offers a list of projects, from new parks to playgrounds, towards which people can pledge money.
They say we all have a novel in us. Well get it out now withUnbound. This website allows authors to pitch an idea and potential readers to pledge money to fund its writing. It is both a funding platform and a publisher; the site splits a book’s net profit 50:50 with the author.
Buzzbnk projects include a “forest garden” in south London, free Wi-Fi provision in Mansfield, and turning a primary school into a community centre in West Yorkshire. It’s a social enterprise platform, backed by leading charities and foundations.
Even the fetish and adult industry are in on the act:Offbeatr which allows the community to cast votes on projects they would like to see make it to the funding phase.
Dragon’s Den
Seedrs andSeedmatch take a more traditional approach. They still rely on the crowd, but exchange investment in the start-up for equity. You enter a long-term investment contract for five to seven years.

If this is all sounding a bit risky, well fear not. Even the FSA is cautiously getting on board. As of a couple of weeks ago,Crowdcube, that enables small businesses to raise money in exchange for equity, has been approved by the FSA. That means if anything did go wrong, you will now be able to claim compensation from the Financial Services Compensation Scheme and access the Financial Ombudsman Service to complain.
And it's not just limited to simple funds either:Bank to the Future is the world’s first “peer-to-peer” market to allow businesses to raise debt, equity or donations from consumers and investors in one place. Sir Richard Branson shortlisted it in his “Screw Business as Usual” competition to find innovative business models.
Brand Benefits
A real opportunity for brands could be asking consumers to back one of your R&D concepts resulting in a ready-made paying fan base with a real stake in its future - and one hell of a PR story!
Whether you are a business or an individual, a club or an organisation, you can make it happen for your own projects or someone else's. How about that flying car or any ofthese?

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