New publican toasts success of crowdfunding
Published 27 Aug 2013
A mixologist may try to shake up some more investment to expand his company after successfully generating £20,000 through crowdfunding.
Simon Collier will now kit out MRC’s Newmarket Bar in Thurso, using the money raised with help from the Caithness community.
He offered 12% equity in MRC Bartending through the cash-generating method, which sees companies or organisations appeal to a large group of people for small contributions that, when added together, provide the money for a project or business venture.
“I always had confidence this would be achieved, but I was genuinely overwhelmed by the support, especially from local people,” said the 29-year-old.
“We are already thinking of round two. Within the next three to five years, once the business is up and stable and can support itself, we could look at a possible second venue or expansion into other markets and development to handle external events on a larger scale.
“The details are all vague and market-dependent but I’m very keen to give it another go because the community now has a better understanding of what crowdfunding is and how it works.
“That understanding, I feel, would make another crowdfunding pitch, from anybody, quicker to be adopted.”
The venture attracted around 30 contributors, with the largest being £5000 from another business. It was supplemented by commitments ranging from £10 to three more four-figure investments.
An invite-only celebration for contributors is due at the end of the month when the venue is likely to be complete.
“Reaching out to the public has not only driven investment income - it has also widened my customer base,” said Mr Collier, managing director of MRC Bartending, which will have around 10 staff.
“Even if they have not had the money to pledge an investment, so me people came and spent their money over the bar, which in the long term is even better because a bar can attract investment but it needs customers to survive.
“Now that we are funded doesn’t mean we are going to disappear,” he continued. “We are going to support local people - it’s all about the crowd when it comes to crowdfunding and without them it is impossible.
“This is a business for the public and we want them to come and enjoy it.”
Online fundraising platform BankToTheFuture - which supported this innovative way of securing investment as an alternative to high street banks for business finance - helped Mr Collier finalise his business plan and create his fundraising marketing material. Its team will return north to document progress and feature the project as a success story.
“Simon showed that this type of funding can offer so much more to a business than a bank loan,” said Simon Dixon, chief executive officer of BankToTheFuture. “People are now deciding which businesses get funded, not banks.”
Earlier this summer Aberdeenshire brewer BrewDog raised more than £1 million from investors in just 24 hours after launching a crowdfunding scheme. It is not a new concept, however the spread of internet access and social technologies have led to growth, extending the reach of crowdfunding campaigns.