Never fear, weirdos of the workplace, there are plenty of ways to find money for your nonconformist projects. Here are 4 ideas for securing outside funding.
Securing outside funding can make or break a startup. For startups serving creatives, the funding process can be even more challenging.
Take Mario Rueda for example. As he hustled to get funding for his company, he began to feel like an outsider among his fellow entrepreneurs. The platform he co-founded, Book a Street Artist, connects a network of 500 artists to clients who need entertainment for their corporate parties, weddings, and other events. At startup competitions, he says judges were focused on the fin-tech and biotech companies, not one that serves the artist community.
“As a young entrepreneur, you try to fit into the boxes that are out there,” Rueda says. A b-school grad who left his job in the corporate world to pursue work that aligned with his values, he wants to take Book a Street Artist to the next level. While his business model isn’t instantaneously scalable for millions, he sees the immediate impact on the lives of the artists he features in the app.
Many entrepreneurs fall into this unique space in startupland: Making an impact, but in non-traditional ways, that may not attract investors. Or, they are ready for investment but don’t want to let go of control. Never fear, weirdos of the workplace, there are plenty of ways to find the money for your nonconformist projects.
1. Enter Competitions Made for Trailblazers
Rueda knows a startup competition isn’t for him when he sees a questionnaire asking him about customer acquisition cost and other metrics that don’t fit his business model. A new breed of competitions is emerging, though—one that favors societal impact.
Book a Street Artist made it to the finalist level at the Berlin Creator Awards, a competition that includes for-profits and nonprofits alongside artists. This global competition, sponsored by WeWork, is in its first year.
“The Creator Awards are about trying to uncover people who don’t fit into the traditional systems of funding,” says WeWork co-founder Miguel McKelvey.
Red Bull Launchpad also doesn’t shy away from socially-minded entrepreneurs. Park & Diamond, which manufactures foldable bike helmets, took home top honors at the Launchpad event in May 2017 when they were still in the prototype phase. As a result, the company was then able to showcase the collapsible helmet to a much larger audience at the TechCrunch Disrupt conference in New York.
While new awards pop up to fill the need, other contests are now embracing winners with social impact. GoSafely’s Annemarie Stockinger, who designed an alert device to help anyone walking alone feel safer, kept her expectations low when entering tech-focused competitions such as HackATL.
“Hackathons lean not toward social impact but to the coolest newest thing,” Stockinger says. “So I was shocked when they called us for the final round.”
The college-aged crew of GoSafely ultimately won first place at HackATL 2016, and applications for this year include a social impact category.
2. Turn to Crowdfunding
Besides competitions, Stockinger is also taking advantage of crowdfunding opportunities to raise capital without being tied to investors. “While I am interested in having a company that can stay afloat, I want to help people,” she says. “I’m concerned that any outside funding might not align with that goal.”
When choosing a crowdfunding platform, Stockinger suggests studying similar projects or competitors. “Looking at the data, I saw that social impact projects do better on Indiegogo,” Stockinger says. “Also, their video hosting is on YouTube, so it’s searchable and can drive traffic to our campaign.”
3. Take Crowdfunding to the Next Level
Let’s say you wouldn’t mind getting investors involved, but for whatever reason, you can’t tap into traditional investment routes. A newer alternative (as of January 2016) is to crowdfund an investment round.
Platforms such as WeFund, SeedInvest, and StartEngine connect anyone willing to invest with exciting new companies. The people drawn to the campaigns are often the same people who would buy the product, making crowdfunded investors an important resource for customer insights, too.
“The people who invest care,” says StartEngine Co-founder Howard Marks. This month, StartEngine kicked off its first round of funding using its own platform. “(Our investors) want to understand why we’re doing this, what our past is, and what our future is. There’s as much trying to make money, but also an emotional investment.”
4. Don’t Lose What Makes You Different
At the end of the day, just embracing the fact you’re a misfit company may be what you need.
“At some point, we realized, f— it, we’re just going to do our thing and tell our story,” says Rueda. “And we as an art-tech company managed to convince investors to invest in us.”
This guest post by Bridget Riley was originally published on WeWork’s Creator Magazine and has been revised for FreshBooks.
about the author
Bridget Riley is editor of WeWork's Creator. She cut her teeth in journalism at Emory University with internships at NPR, CNN, and the San Francisco Business Times. After graduating, she took a leap to Beijing, China, where she copyedited at the Global Times and ran the magazine of the American Chamber of Commerce in the PRC. Follow her on Twitter: @bridget_riley.