New Economy Journal

Crowdfunding: Lessons From Shebah and Food Connect

Volume 1, Issue 3

June 4, 2019

By - Andrew Ward

Piece length: 829 words

Photo by Rob Curran on Unsplash
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I've interviewed both the Founders of Food Connect (Robert Pekin) and Shebah (Georgina McEncroe) in the last week and talked with them about their crowdfunding successes.

They both shared that 90+% of funding had come from women. Women voting with their money on the type of businesses they want to see in the world.

I also learned that they built a crowd that then decides to do the funding as part of their own mission.

These businesses aren't promising unicorn-like returns! In fact they were promising 'fair' returns and 'fairness in the system'.

Food Connect raised $2.1m in their online equity crowdfund

It is a subtle but important difference to optimise for your crowd, not the cash.

It's a Womans World

Focusing on the crowd and not the transaction is something I don't think most people (men) in the industry get.

By and large the industry (18 licensed equity crowdfunding platforms) are still talking to investors about 'being early into the next Facebook'.

When they do this, they focus on the investment as a product - and this leaves equity crowdfunding to compare against all other classes of investment product i.e housing, blue chip shares etc. On this basis picking unicorns via crowdfunding sucks.

If you see what else is working in the equity crowdfunding space (although nowhere near as well as Food Connect and Shebah), it's just beer and neo-banks.

There's not enough beer lines to support 18 licensed platforms in the coming years. So this number is likely to shrink. When it does shrink, the risk is that the media and “investor-class” will say crowdfunding “failed”. And for them it will have.

The truth is far from that for women.

Shebah raised $3m

Equity crowdfunding is working very well for businesses like Food Connect (largest raise in 2018, $2.1m) and Shebah (largest raise to date in Australia, $3m).

Some of the best platforms are run by women - Anna Guenther from PledgeMe in the equity space, Jill Storey from Ready Fund Go in the rewards space and campaign-management space.

You Must Invest In The Crowd

When speaking with Robert he outlined how Food Connect was able to get a grant that covered the costs of the campaign. This enabled he and Emma-Kate (his Co-Founder) to access the extra legals, design and time-resources required in order to do the successful raise. Without the extra resources the impact of the campaign on the core business may have been detrimental. Instead the campaign was successful and the core business was never busier.

Georgina from Shebah explained that she used equity arrangements with someone experienced and that she trusted who "campaign managed" the whole sophisticated investor side of the campaign. Georgina also explained that she had phenomenal levels of assistance from Birchal (the equity crowdfunding platform she used). Even with these resources she found the campaign to be one of the hardest and most exhausting chapters of her professional career.

Crowds Are Not Just For CrowdFunding

If you're considering any type of raise for your business then you may want to consider doing it like you were doing a crowdfunding raise.

Build a crowd in the pre-campaign stage that identifies with your mission, let them identify the funding gap, then you can show traction metrics and solve that funding issue with a few larger placements or lots of small ones through crowdfunding.

If you build the support from your crowd then funding via traditional finance or crowd finance is easier.

It may take longer to bring a crowd with you, but it's easier to demonstrate traction.

It may take time you don't have, but it will help you get the money you don't have…

Pre-Campaign and Campaign Management

If you don't have the time or skills to invest in this type of campaign, then you may find Campaign Management As A Service useful.

This is something every platform does to a degree.

The degree that they can afford to do it is limited - as most people need a lot of help and some stuff they just can't advise on because it is very context dependent. In the case of equity crowdfunding, the platforms may be unable to give too much assistance because under their license conditions granted by ASIC, platforms are playing the dual roles of 'promoter' and 'policeman' with regards to the offers being made.

Ready Fund Go are specialising in Campaign Management As A Service. They will get inside your business and act on your behalf to coordinate a large raise on any rewards or equity crowdfunding platform.


Shebah and Food Connect both genuinely grew their core business through engaging with their crowd. As the crowd began to buy into the mission, they agitated for a business-based solution that in turn created the conditions for a crowdfund.

This didn't happen by accident. These insightful Founders invested time, money and resources into their pre-campaign and campaign so that it would be successful.

Importantly, the offer to their crowd didn't have to be 'sold' on the basis of ‘outstanding future returns’. It was instead 'sold' on the basis of 'fairness'.

This is the sort of pitch that works well in terms of crowdfunding i.e they raise the most - and the pitch that works well in terms of the crowd.

If we want crowdfunding to succeed in Australia, then we - as an industry - need to help would-be fundraisers understand that it isn't about their deal, it is about their crowd.

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