An Intro To Crowdfunding
Crowdfunding is the new bank loan, without the pressures of repayments. Crowdfunding is an online method of fundraising that allows people all over the world to put their ideas or pitches onto a digital platform. These pitches are then available for people worldwide to see, and to decide whether or not they would like to support the campaign. There are 4 main types of crowdfunding methods available, rewards-based, donation-based (Backabuddy), and equity-based (Uprise.Africa), and debt based, each with its own unique purpose.
In South Africa, crowdfunding is still a relatively new concept and with many South Africans skeptical about making online transactions, it is very much a rising industry. Rewards-based crowdfunding has become a growing force within South Africa, with Thundafund at the forefront. Thundafund is the brainchild of entrepreneur Patrick Schofield, who founded the company in 2013.
The way that rewards-based crowdfunding differs from any other form, is that in exchange for the money raised, the project creator is expected to give something back to the backer in the form of a reward. These rewards can vary, anything from a thank you card to a tangible product will suffice. However, when selecting rewards for your campaign, it is important that you keep both your project and your potential backer (audience) in mind.
Crowdfunding In 2017
South African crowdfunding has come a long way in the past year, and 2018 is shaping up to be even better. Thundafund is proud to be the leading platform of South African rewards-based crowdfunding for 2017. Having been able to watch and be a part of more dreams coming true than ever before in our history is a honor we could not have dreamed of in previous years. 2017 has seen the major development of categories such as the arts, and food and beverage, both exciting and important segments of South African culture.
This year alone Thundafund has raised over R8 million which is almost equivalent to the previous four years combined. This is incredible for a multitude of reasons. First of which being that the benefits and knowledge of crowdfunding have started to sink into the minds of South Africans, making it a viable funding option for entrepreneurs and artists alike. What this means is we have been a part of breaking down a major barrier to entry for a lot of entrepreneurs and artists, who previously were unable to follow their dreams and reach their full potential in their respective fields. A wonderful ripple effect can be seen in the projects and project creators we see and engage with on a daily basis. There has been a change in their way of thinking, they now are able to show true innovation with a mindset that ‘anything is possible’. This is something we are extremely excited to see progress going into the new year.
One of the most astounding things to occur this year in South African rewards-based crowdfunding was when SA rock band Fokofpolisiekar broke the record for the highest amount raised through a rewards-based crowdfunding campaign, which was later topped in November by a newcomer to the market Sugarbird Gin. Both campaigns raised over R1 million, and set the benchmark for what is possible in the year to come. What makes these record breaking campaigns so unique is how equally they reflect our views on how to succeed with crowdfunding.
Fokofpolisiekar, a well established rock band, with years of experience and a vast network of loyal supporters, proved the power in effectively tapping into your network and identifying what they want. While Sugarbird Gin, a total newbie to the market was able to use their rewards and strong brand mission to not only raise the money they needed but build up a loyal database of customers. In addition to this, both brands were able to use crowdfunding as a form of market research, to test if the market was ready and excited for what they were offering it.
“Breaking records, realising dreams. Thundafund went ‘next level’ in 2017. Raising more funds for entrepreneurs and creatives in 1 year than in our previous 3 years put together, we’ve seen South Africans embrace the power of crowdfunding.” Patrick Schofield CEO
Thundafund operates in 13 main categories which campaigns can crowdfund in; art and photography, community, craft, design, events, fashion, film and video, food and beverage, music, performance, publishing, sports, as well as tech and games. However, even though some of these categories have yet to reach their full potential,, others have shown wild growth and success.
Art and Photography
Art and photography has been a successful category on Thundafund for many years now, one of the main reasons for this is partially due to the strong artistic culture in South Africa. The arts have always been a method of self expression and different art and photography pieces have the ability to to stir up emotions in anyone.
This year Thundafund had the honor of working with an incredible initiative called Mutts. Mutts is a coffee table book filled with photographs and stories of various mixed breed dogs that have been given a fresh start with a loving family after a hard life. This book is not only about telling stories, but bringing to light the beauty inside each one of these animals. Emma O’Brien, a Johannesburg based photographer, created this visionary idea to give a voice to those without, but as with anything she needed funding to make it a reality. The goal was R155 000, which would go towards to costs of publishing the book, however with the strong emotive appeal of this campaign she was able to raise R166 040 exceeding her goal.
The Mutts campaign was successful due to its’ innovative nature and powerful message. The goal behind it wall was a combination of giving these mutts a voice, creating beautiful work, changing the stigma of mixed breed dogs, and to give back. All proceeds from the book sales go directly to the SPCA and CLAW foundation in Johannesburg, to help them care for the dogs who are still in need of a family and a home.
Food and Beverage
Thundafund has seen many exciting food and beverage campaigns over the years, but none have been as exciting or a profitable as the record breaking campaign done by Sugarbird Gin at the end of 2017.
Sugarbird Gin is a new craft gin brand on the market in South Africa, it was founded out of a love for just good gin. This is their montra, not to be the best but the favourite, to be top of mind among South Africans. Craft gin is a fast emerging market in South Africa, and there is an ever growing array of options to choose from. Sugarbird saw this barrier to entry as an opportunity to stand out amongst the clutter in the category. It was this that led them to their record breaking crowdfunding campaign. Raising an astonishing R1 086 973.00 during their campaign they proved that crowdfunding is more than just a method of obtaining capital for a new business, but can be a great method of introducing yourself to the market.
Creating a campaign as a new brand that breaks records is no easy task, Sugarbird proved that it takes hard work, innovative thinking and a strong team to accomplish such feats. Throughout the campaign this brand continued to create exciting and relevant content to update people on the progress of their campaign, they took risks and broke down barriers by offering rewards never before seen on Thundafund. Their most innovative offering was allowing people to get in on the action and buy a batch for which they would receive a 25% return within 6 months. This proved to be a huge success and ultimately set them over the top, sealing their spot in the crowdfunding hall of fame.
Music as a category on Thundafund has seen many successes such as Saarkie, Shut Up! It’s Sunday, and Kahn Morbee. These campaigns have all shown the power in a loyal network of fans, and how they can rally together to support a crowdfunding campaign. The most successful campaign in this category was Fokofpolisiekar, which started in March of this year.
Fokofpolisiekar launched a campaign Fokof Crowdfunding at the beginning of 2017 to record and independently release their third studio album Selfmedikasie. This album caused a lot of excitement as it was their first album to be released in 11 years, since their sophomore album was released back in 2006. This campaign was an instant hit amongst fans, as could be seen when they reached their dream goal of R500 000.00 in only a week. This campaign was the first of the year to break South African rewards-based crowdfunding records, raising R1 081 010.00 from the campaign.
The overwhelming success that this campaign was caused by three main factors; the band’s network, their project and their rewards, but most importantly how these three factors all worked together. In crowdfunding these are known as the three pillars of success, and by tapping into even one of these can make a successful campaign. Fokofpolisiekar hit a sweet spot, with a network of fans longing for a new album, and excited about any merchandise that they could find. Throughout this project the rewards were changed out of necessity as there was not enough for all of the demand.
Publishing has proven to be one of the most successful categories on the platform. With humans each having a story to tell there is no end to the exciting novels that have yet to be written and that need to be published. One such campaign told the stories of amazing South African women, women who had an impact on our history and made change for the better.
A to Z Amazing South African Women
In 2017 Modjia Books set up a crowdfunding campaign to publish their latest book A to Z Amazing South African Women. This book was created to celebrate South African women, the rebels, artists, troublemakers, athletes, dancing queens and freedom fighters that shaped our past and the amazing accomplishments that they have been a part of that shaped our future.
The success of this campaign was due to hard work, and how the project played on honoring the past and the people that helped shape the world we all live in. This project was one that could resonate with people in a way that was more than just great reading material. In a similar manner to what made Mutts a success, this campaign was rooted in emotion, but also in culture and South African pride.
As a human race we are all social beings, and what better way to interact with each other than at events designed to celebrate a shared interest. This year Thundafund has seen several events come onto the platform, either directly occuring or indirectly as a result of a great campaign.
Harare International Festival of the Arts 2017
#HIFAMustHappen was a campaign earlier this year that was setup by ‘The Friends of HIFA’ who had a goal of keeping this incredible festival going. HIFA, which has been around since 1999 as a small arts and culture festival in Harare, has grown drastically in the last 18 years and transformed into more than just a festival. HIFA is a sliver of joy for the people of Harare, a time of year where they can celebrate and show true self expression through the arts. However, due to the political and economic conditions in Zimbabwe, it was uncertain that the festival would be able to fund this monumental event. The campaign was aimed at aiding HIFA in the extreme costs associated with putting on a festival of that magnitude and was successful in raising R292 039.00.
This campaign was an important one as it spoke to a passionate group of individuals who truly believe in the hope that HIFA provides to a nation in crisis. The support from the artistic community was overwhelming, as big acts such as Freshlyground were eager to aid the organisation in any way they could. The campaign received many praises from airists and festival enthusiasts alike, as they all knew it was an important cause that needed to supported.
Film and Video
Film and video is an art that has only become more and more accessible to people all around the world. It is an art and therefore a form of self expression. It is because of this that there is an underlying layer of passion and fire for this medium and why we experience a number of great campaigns in this category. One such project that has dominated this category in last few months of 2017 is The Bull.
The Bull is a short film by a passionate and enthusiastic team of individuals. This film follows a young woman through the last days of her pregnancy and discovers the strange magic that burdens her reality. This film is a fairytale about new life in a world where creatures have more in common than the shapes that separate them. This campaign was started as a method of obtaining the funding needed to bring their vision to an international audience. The costs of submitting a film to international film festivals are high and relatively unachievable to the unknown filmmaker, which is why crowdfunding seemed like the best way to seize this opportunity. To date The Bull has raised over R60 000.00 which will go a long way towards helping them achieve this dream.
While The Bull is still live on Thundafund they have shown great success for an unknown film with limited resources. It is truly passion and determination that drives this project, without having a wealth of resources at their disposal, The Bull team have managed to gather an immense support. This project is trusted as it is clear that the whole team is behind this project and that they have truly poured their heart and soul into making it a success.
The community category on Thundafund has continuously shown great success, as it allows people to fuel positive change in the world. On top of this, it allows people to be champions for change, and it gives non profit organisations a centralized place to find funding for different objectives.
#35SmilesIn35Days was a campaign set up by the global organisation called Operation Smile whose main objective is to repair cleft palates in children. Operation Smile ran their campaign and hit their goal of raising the money to repair 35 smiles in 35 days. However, Operation Smile exceeded their goal by R11 110.00 making it possible for them to repair 2 extra smiles. The total amount raised by this campaign was R203 110.00 over a 45 day period.
One of the key factors that drove this campaign to success was definitely a strong network of loyal supporters. With 35 years of experience, Operation Smile has built up a vast international network of loyal supporters. This is their network, and to take it a step further than just reaching their own network, Operation Smile enlisted the help of celebrity brand ambassadors, who helped them launch the campaign on the Expresso Breakfast Show, and continued to push throughout the campaign. With a clear campaign objective of ‘35 smiles in 35 days’ along with a vast reach among various networks, this campaign was always destined for big things.
Streetscapes City Gardens
Streetscapes is a visionary initiative created to turn people from being homeless and hopeless into happy and productive members of society. Streetscapes was started out of a passion for helping those who have been abandoned by society, and left to fend for themselves due to a series of unfortunate circumstances. The goal of this project is to create city gardens that turn the unemployed into entrepreneurs, who learn to grow their own produce that they can then sell. The project raised R37 833.00 to help them fund their third city garden in Cape Town.
This was a great project as it dealt with an issue that every South African is faced with on a daily if not hourly basis, homelessness. We come into contact with them everyday, and all have our own views and opinions on the matter with one general consensus that something must be done. This campaign gave the people of South Africa the opportunity to take action and be a part of the change we would all like to see coming in the future.
2017 has been one incredible adventure, and Thundafund and the team have enjoyed every second of it. There have been more successful campaigns than ever before, and serious growth in almost every category. From this, easily the best year in SA crowdfunding history we are able to better understand the nature of crowdfunding in South Africa, and therefore can better help our campaign creators to succeed with their campaigns.
While every project is different and can not all hold the same amount of interest, we have found that one of the most common factors with successful campaigns is the project itself. From the idea, to the layout of your project page, the whole concept must say the right thing to the right audience. Transparency breeds trust, and this is often a key factor in whether or not the backer will help fund you.
One thing that project creators are always encouraged to do before their campaign goes live is to build up a network of supporters who believe in their campaign/idea. This is crucial for the early stages of funding, and will ultimately help build the trust between the project creator and a backer who is having their first interaction with the campaign page. A common misconception to many is that the platform’s network on it’s own will be strong enough to carry the campaign, and in some instances this can happen. However, usually this will not be the case, as people use the project creators direct crowd to refer the quality of the project. The wider crowd need to see ‘your’ crowd supporting before they jump in.
Thundafund is a rewards-based crowdfunding platform, so as to be expected the rewards play a fairly large role in the campaigns success or failure. While the rewards may not be the icing on the cake in every campaign, they can make a small donation turn into a large one in some cases. Certain rewards can help build the credibility of a new brand, or even to test the market to see which of your products will be most successful in the future of your business. Rewards can also play another role and become the driving force behind a campaign, leading it to victory. In these cases the project and network may not be the strongest assets of the campaign creator, but people love to buy unique and innovative products and services that they could not get elsewhere.
Thundafund is a trusted platform, our role is to facilitate that trust and help businesses establish themselves. Through our diverse network we are a well connected company with ties to media across our various categories. This allows us to help our project creators extend their reach and build up a solid network for the future of their business/project, beyond just the campaign.
Predictions for 2018
Crowdfunding is a powerful tool that can be a great source of raising capital, marketing your brand, and testing your idea in the market. At Thundafund we have high hopes for 2018, and with high hopes come equally high plans, goals and expectations. We expect rapid growth in all sectors, with crowdfunding becoming a mainstream channel for entrepreneurs in South Africa to raise capital and launch. It is our belief that South Africans are the innovators of tomorrow, and it is our ‘new year’s resolution’ to bring those innovations to the world, to see South African entrepreneurs, artists and inventors succeed in ways that have yet to be possible until now.
“2018 beckons and our aim? To double up again. We’re part of the entrepreneurial movement in South Africa that is re-writing people’s futures and dreams. Every business going live, every creative project realised, every new product launched is an opportunity for us to build a prosperous nation of people doing it for themselves. That’s the expanding culture we’re part of, ‘don’t wait on others, make it happen yourself’. “ Patrick Schofield CEO