We get by with a little help from our PledgeMe.Friends

We first wrote about the idea of PledgeMe.Friends in our blog two weeks ago. Here’s a bit more about how we see our new friends-powered referral system working.

2014_07_08 PledgeMe equity launchOne thing we’re blessed with here in the PledgeMe office is a great circle of friends – be it our alumni, our shareholders, our personal networks, or our professional contacts. We’ve been around for a few years now, and have gotten to know people up and down Aotearoa New Zealand. We’ve talked at 100’s of events, met 1,000’s of people, presented to over 10,000 attendees and helped over 1,000 campaigns fund through our platform.

And, now we need your help. We need help finding and nurturing crowdfunding campaigners that might not come to us direct. Companies, organisations and teams that you think would be a natural fit for going out to their crowds, but they might not see it.

They might be so deep in the delivery of the work that is in front of them, that they haven’t had time to think about raising money to expand, or time to learn more about crowdfunding.

Great campaigns are already coming through our doors – but we know there are so many more awesome campaigns out there that just don’t know what they don’t know.

Project successes in last week

Things like ParrotDog are happening, things like Eat My Lunch are happening, things like The SpinOff are happening. These are all campaigns, across our three types of crowdfunding, that have done what our platform does best: activate their own networks to make their plans happen. And, their plans are so much more than just about making some investor they’ve never met a 30 times return. They’re about strengthening communities, building brands, and making a change in the world (even if it’s a beer based change).

But, these campaigns can be hard to find, hard to nurture, and hard to support. So that’s where you come in.

We’ve launched PledgeMe.Friends. We think there’s really nothing more powerful than our own crowd. You’ve shown us time and again that you back us: when we ate our own dog food (twice), when we made a magazine, when we wanted a new board member, and when you all decided I seriously needed a holiday.

What we really need most right now is more companies and organisations we can help through project, equity and lending campaigns. That’s where you come in:

If you are the first person to shoulder tap a company to run a campaign, and they end up running a successful campaign, we’ll give you a $500 success fee (either direct to you or pledged towards the campaign for you). The campaign needs to meet its goal by its deadline, and it needs to raise more than $50,000.

How is this going to work?

  • Fill out this form here (or email us on contact@pledgeme.co.nz)
  • If you’re the first person to recommend that company, we’ll get in touch and ask for an intro (if you can do it)
  • The more details about how we can help the better
  • You could even help them get to their goal – support, share their campaign, be their cheerleader (with benefits).

Yep – you can be from the company. If you aren’t the first person on board to recommend someone we’ll let you know, and send a high-five your way.

What does a potentially successful campaign look like?

  1. Something that has been around for a little while (eg. people have seen the work the creators are doing)
  2. A great crowd around the company or organisation – be it customers or friends
  3. Great communication – they should pride themselves on being awesome at communicating with their crowd
  4. A plan (or ability to create a great plan) – something that a crowd can get on board to make happen

Here’s to the next great campaigns that come through our doors. Hopefully with your help, friends!

Confessions of a Crowdfunding Enthusiast

Our latest guest post comes from crowdfunding enthusiast, Adam Millen. Engineer by day, children’s author by night, he went from backing campaigns to running one of his own. He’s hooked and planning another campaign. You can find out more about it at jackfeelsbig.nz/sophie. He tweets about crowdfunding @crazyideasnz and blogs at crazyideas.nz.

What would you do if your friends and family offered you a couple thousand dollars? They say they want to support that thing that you’re really passionate about, and the money is for you to produce something cool to share. What would you do with it?

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At the start of last year I had the idea of creating a book to teach kids the names for their feelings. And I crowdfunded it. I’ll tell that story, but first – why? Why do I care about crowdfunding ideas? Why should you care?

I care because I’m excited about the way that crowdfunding forms a bridge between people’s ideas and reality. A bridge for ideas that otherwise would never have come to be.

You should care because you could be one of those people! And it’s really rewarding to do! Both the creating and the backing.

So let me tell you my story. It actually starts even before I had the idea. I had backed crowdfunding campaigns and I already knew that I wanted to create something, but I didn’t know what.

Then, at the start of last year I stumbled across inspiration. I read an article laying out how important it is to teach young children to name their feelings and I saw a gap – it would be easier to teach these words if there were books with stories that specifically used these words. It seemed like something that I could put together. I couldn’t draw well enough for a kids book, and I don’t have the equipment for printing and binding. But I could find people to do those. I could use my engineering brain to analyse a complex concept and break it down to simpler parts. And I could come up with a suitable scenario to illustrate each feeling. I got pretty excited about this useful thing that I could create!

Coming back  to my first question – what would you create? Have you had ideas like this? Have you seen something missing from the world? Maybe you thought “someone should definitely make that”. Maybe you could be the one to do it!

I shut myself in my room over the Easter long weekend last year and wrote up a dozen stories and laid the groundwork for some more. I came up with a defined project. I would get illustrations done for 15 stories and publish them in three volumes.

Next I did some research on how much that would cost and got quotes from printers and illustrators.

If I set my crowdfunding goal at $20,000 that would mean I would need to pre-sell eight hundred copies of the book at $25 each. That balanced the fixed cost of fifteen stories worth of illustrations with the variable costs of printing, postage and crowdfunding fees.

I hadn’t done books before. I didn’t have an existing customer base or relevant community to go to. I had friends and family, but the $20,000 goal was not realistic. No worries. I just had to re-package.

I redefined and resized the project – to get illustrations done for just five stories, and with those in hand, publish “Volume 1”. For me, crowdfunding would be a stepping stone. Maybe the thing you’re passionate about is too big for a couple thousand dollars. Can you make part of it become a reality on this budget? It could be the first step to something awesome.

For my campaign, the main reward would be a copy of the book for pledging $25. For $5 and up, backers would be kept updated and would get to choose which five feelings went into the book. For $50 they would get a signed copy. There were options all the way up to a thousand dollars. The $25 reward point tends to be the most popular, but it’s important to cover the whole range to leave all of your crowd satisfied.

So what about your passion? If you packaged up a project with a budget of a couple thousand dollars, what would you share? Something tangible – like a print of a painting of yours? Or an experience like tickets to your big show? A virtual reward maybe – like an mp3 of your song? Public appreciation – like a place in the credits at the end of your documentary? Or involvement – like being part of the crew, getting inside access or VIP (Very Important Pledger!) treatment? If all else fails, how about some merchandise – like a tshirt with the name of the community group? There’s so many options if you think freely about it.

Ok. So I had my plan laid out. Next, I spent a weekend putting together a video. I had the technical know-how, and I had my idea pretty well condensed, both of which helped. My delivery wasn’t the greatest though, and it took hours of recording to get just a few minutes of not messing up my lines. And then a whole lot of editing!

If you’ve got an idea that you want to crowdfund, you’ll need to make a video. And you need to be in it. Why is this so important? People need to see your passion for this thing. If you don’t believe in it, why would anyone else? But I’m sure you can get excited about your big idea! You also need to keep it short and to the point, and it helps if your camera is stable and your shot is well lit.

The next thing I needed was a crowd. I made sure that I started talking to people even before I launched, trying to make sure I had a list of core backers that I could depend on to pledge immediately. My closest friends, immediate family and other friends who also happened to be in my target audience. When the campaign opened, it was people from this list that gave it a running start.

The sooner you start building you crowd, the better. Even before you have all the rest planned out, it helps if you make a habit of talking about what you’re passionate about. Post on social media, join relevant community groups. It all helps.

After that I reached out wider, direct messaging every single Facebook friend I had. The second push was enough that the first few days got me to about 30% of my goal. This is a typical start for a campaign that’s going to make it. It’s is a very exciting time. And then things leveled off. In general, a typical successful campaign will spend the next ten or twenty days steadily plodding toward the 60% mark. This part tested my perseverance. Someone who really liked the idea pledged $500! Then several days passed with nobody at all pledging. Then  I got an article on Stuff! But it didn’t bring in any new backers. There were definitely times when I wondered if I would even make it!

I made sure to send updates out during the campaign. I engaged with my backers and encouraged them to help spread the word. It was hard work keeping at it, even when the early optimism flagged.

Most campaigns that reach 60% by the 5-days-to-go milestone will get to the mark. As the countdown approaches, if you’ve got enough funding that it’s looking credible, the fence-sitters jump on board. The despair of the middle of the campaign is suddenly replaced with joy! All your hard work has paid off!

I reached my goal, and actually managed a little bit more. In the end about three-quarters of my backers were friends and family.

Even after the crowdfunding campaign was a success, I still had a lot of hard work to do! Producing and shipping a quality children’s book took plenty of time and effort. I spent most of my Easter long weekend this year personally delivering books to backers (a great experience in itself). Now I’m all done and I’m selling the book on my website. A book that might never have existed.

I’ve made my crazy idea a reality. How about yours? If you don’t have a project of your own, get on board with someone else’s. Help them make the video, share their page. Or back it!

Crowdfunding is going to be the bridge to reality for a whole stack of ideas that otherwise never would have gotten there. And that’s exciting.

 

Keep your eyes peeled for Adam’s upcoming campaign, Sophie Feels Big.

 

Our results and our friends

TL:DR, we didn’t hit our forecast last year, and we’re ok talking about that.

It’s a funny beast, transparency – since we went out and crowdfunded ourselves, our forecasts are out there in the ether (and journalists’ hard drives). And when it’s time for us to post our annual accounts as a Financial Service Provider, our results are there for the world to see.

Not that we mind – transparency is our bread and butter. We truly, deeply believe that openness and accountability make the world a better place. (That said, it grates a bit when commenters on news stories about us can still hide behind a pseudonym, and frankly, behave like schoolyard bullies).

It’s true, we didn’t hit our forecast last year. For a whole bunch of reasons. Because educating companies through the process takes time, because we’d calculated our forecast on two strong months at the start of the year, because the market got crowded, because the first blush of being in a new industry faded, because we stick to our fee structure in the race to the discount barrel bottom, because it’s fucking hard work in start up land.

But the explanation for what happened in the past really isn’t important, what is important is what we’ve done since last financial year. Which, in start up time was light years ago. 

We’ve:

  • Launched an education programme to help companies through the process, CrowdfundingU – better supported, well prepared companies are more successful.
  • Gotten two new board members to help build our strategy, Jessica and Mel, with expertise in financial markets, sales and marketing.
  • Launched our lending platform, with Eat My Lunch hitting the ball out of the park on their Lunch Bond campaign. PledgeMe.Lend will enable more great NZ companies AND organisations access the funding they need. 
  • Changed our structure (with our team, not against them) to better match the evolving market and demands of our business.
  • Had over 1,000 successful campaigns through the platform. Yep, 1,000+ campaigns have gotten funded through us.

 

And, we’re excited. Really excited. Tired, but excited.

Things like ParrotDog are happening, things like Eat My Lunch are happening, things like The SpinOff are happening. These are all campaigns, across our three types of crowdfunding, that have done what our platform does best: activate their own networks to make their plans happen. And, their plans are so much more than just about making some investor they’ve never met a 30 times return. They’re about strengthening communities, building brands, and making a change in the world (even if it’s a beer based change).

Project successes in last week

 

But, these campaigns can be hard to find, hard to nurture, and hard to support. So that’s where you come in.

We want to launch a new idea today: PledgeMe.Friends. We think there’s really nothing more powerful than our own crowd, you’ve shown us time and again that you back us when we ate our own dog food (twice), when we made a magazine, when we wanted a new board member, and when you all decided I seriously needed a holiday. 

What we really need most right now is more companies and organisations we can help through project, equity and lending campaigns. That’s where you come in:

If you are the first person to shoulder tap a company to run a campaign, and they end up running a successful campaign, we’ll give you a $500 success fee (either direct to you or pledged towards the campaign for you). The campaign needs to meet its goal by its deadline, and it needs to raise more than $50,000.

 

How is this going to work?

  • Fill out this form here.
  • If you’re the first person to recommend that company, we’ll get in touch and ask for an intro (if you can do it)
  • The more details about how we can help the better
  • You could even help them get to their goal – support, share their campaign, be their cheerleader (with benefits).

 

Yep – you can be from the company. If you aren’t the first person on board to recommend someone we’ll let you know, and send a high-five your way.

The path to changing how New Zealanders do business was always going to be tough, and we’re so thankful to our crowd for supporting us. Here’s to the next great campaigns that come through our doors. Hopefully with your help, friends!

Seeking new onesie wearing People Wrangler

PledgeMe is onesie central, and while our Chief People Wrangler Tash may never have worn a onesie, she’s taking it one step further and growing a whole new person to rock a onesie out. A PledgeMe baby! (yes, we are patiently waiting to see whether bubs will wear a dinosaur or a panda onesie…)

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[This is what the team would probably look like while discussing Panda’s vs. Dinosaurs – that’s Tash in the red]

Which means we’re after someone to fill the Tash sized hole in our lives while she is on maternity leave. Chief People Wrangler is an all-encompassing title, which means you may end up doing anything and everything to help ensure the PledgeMe boat sails smoothly. You’ll be the first and last point of contact for Projects, as well as making sure enquiries around PledgeMe.Lend and PledgeMe.Equity are taken care of by the right people.

 

No two days are the same, except for the fact that you are constantly inspired by amazing people doing cool things the length of New Zealand.

 

Now, here’s a list of Tash specific things that we’ll miss, but that you’re not required to bring to the table:

  • Her ability to knit and talk at the same time
  • Her good humour, even in tense Twitter situations
  • The way she just gets shit done, like the manual she decided to write for you (yes, you). It covers everything you could want to know and she decided to revamp it to be the most useable guide on the planet.
  • The fact that one day she’ll knit us a PledgeMe onesie. Right, Tash??

 

Here’s are the general qualities we’re looking for in the perfect People Wrangler:

  • Not afraid to be a bit quirky. We occasionally wear onesies to the office (but only on Wednesdays).
  • Attention to detail – passionate about inbox zero (TBH, inbox ten is fine too)
  • Tech able. No, you don’t need to be able to code C#, but you should know you should be able to work your way around embed code and excel spreadsheets.
  • Empathetic. You need to want to help people, and get the best out of every project creator that comes through your inbox / our office.
  • Able to think on your feet (and office chair). Happy to point out things you think could be improved, then leading the charge to fix ‘em.

 

What this actually means day-to-day:

  • Responding promptly to correspondence regarding projects, an understanding of CRM’s would be a bonus!
  • Supporting creators during project creation, and managing all the steps from reviewing initial request to project close out.
  • Financial management – you’ll be in charge of reconciling pledges, and creating payments to be authorised.
  • Answering enquiries in a timely manner – and forwarding on when help needed
  • Support at events (every few months – it’ll be fun, promise)
  • Picking up on the details around what we do on a daily basis, and finding ways to fix or improve our processes.

 

Hours: 10-15 hours per week – Must be able to work at least 2 hours per day (Monday to Friday)

Location: Wellington (though flexibility to work from home)

Rate: $20-25 p/h (depending on skills and experience)

Applications close EOP 29 July, and we’ll look to conduct interviews 2nd week of August. Please send your application through to anna@pledgeme.co.nz with an email talking about why you love crowdfunding and a link to your LinkedIn (or CV if you really want).

 

Ps. We’re really going to miss you Tash!

South Island Roadie: Part II

Over 7 days we met with over 200 entrepreneurs, doers, and supporters.

We travelled from Invercargill to Westport, and stopped a bunch of places in between. I wrote about the first leg of our roadtrip here, and this is what happened after we left the furthest Southern town (aside from Stewart Island that is).

 

Dunedin

Dunedin is my home town, so returning to the stomping ground of my youth is always a little bit disconcerting. Gone are many of the highlights of my university days (oh, Gardie), but replacing them are start up spaces, beautiful and massive street art, and an amazing re-use of the old commercial district.

We held our evening event in the Abacus Bio offices, which is part of a beautiful historic building on Moray Place. We had everything from berry farmers to tech start ups, from priests to students, ready to learn more about crowdfunding for companies. The room was packed, and it was at this exact moment we ran out of Crowdfunding magazines (sorry everyone!).

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There were some great questions, and a good of bit of weighing in from the attendees on their thoughts around investment, the law, and what a good campaign could look like.

Afterwards, we went out to Thai with some of the attendees, and got invited to park up outside of one of their houses for the night (well – I was outside, Kelsey got a bed!).

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Timaru

The next day we continued on our way to Timaru, where Shaun and the team at Vetta Technologies hosted us in their new co-working space. We had a mix of alumni there (Sam and Rachel from the Super Power Baby project came along to listen) through to cafe owners and local charities. We even had a shareholder, Craig, host some after event drinks downstairs.

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After a night in Timaru (thanks for the bed, Sam and Rachel!) we wove our way up to Christchurch.

It’s around this time that I introduced Kelsey to the podcast Serial. Our driving got a lot more intense after that, as Kelsey was listen with a renewed focus to what was happening over the sound system.

Christchurch

There we were lucky enough to have a crowd of our shareholders give us a place to stay, host us for our event, and be the overall fantastic folk that they are. The turn out for our crowdfunding talk had a similarly diverse feel with youth workers to a company that listed in 1999 showing up to learn more.

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We had the Sunday off after our Christchurch workshop, and had some great conversations overlooking Christchurch while listening to this playlist:

 

Westport

Our last two events were held over mountains in Westport. There was so much interest there, we held two events, and met with everyone from the Mayor to a powerbar company. We need to say a major thanks to Peter Howard, from Buller REAP for sponsoring and coordinating the events for us, and for Epic Westport for letting us use their beautiful (and new!) space.

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Massive thank you time

To all the attendees that crowdfunded to get us down South: thank you!

For all the event organisers & supporters who gave us spaces to speak / sleep: we couldn’t have done it without you.

And to the amazing folk (especially Rachael) at Jucy who sponsored the van we slept in: a HUMONGOUSLY HUGE THANK YOU! You made it possible for us not only to visit our crowd down South, but to sleep outside their houses in a non scary way 🙂

With over 200 of our crowd met while we toured the South, we feel like a North Island tour needs to happen. Do you agree? If you want us to come to your town, let us know in the comments below.

South Island Roadie: Part I

For someone that gets carsick, typing this blog in the back of our Jucy caravan while we drive to across Central Otago wasn’t the smartest move I’ve ever made. But, watching the terrain and inspired by the folk we’ve met, I thought I should share what we’ve seen and done and learnt so far on our South Island Roadie.

Our road trip kicked off on Tuesday, with Kelsey, Nick and I converging on Queenstown. After a delayed start (nothing like a diversion to Christchurch so we could find a bigger plan to fly in on) we arrived in beautiful cool Queenstown. Barely a cloud in the sky, dotted with parachutes and gliders weaving between the hills.

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Innovation Queenstown, Queenstown Resort College, and the University of Otago hosted 12 entrepreneurs for the first stop on our South Island roadie. We had everything from a fashion start up  to brewers to winemakers learning about the fundamentals of equity crowdfunding. We shared stories from our learnings, and heard more about the local experiences of the founders from Queenstown, Wanaka and Cromwell. Of developers working in hostels, ex Google employees finding work internationally but not in NZ, and entrepreneurs desperate to create companies that solved local and global problems.

We had the invite of a place to stay from one of our alumni, Craig, who created the Wonky Donkey man, and spent the night talking about life, creative funding, and watching shooting stars from his spa pool.

In the morning, we thought that the ice on the windshield would be easy enough to scrape off. Only after a first attempt did we realise that the ice was actually on the inside of our caravan, making us a bit late for our first meeting of the morning.

While our Chair completed some work skypes in the van, we met with a local entrepreneur to talk about her start up and Queenstown. After one of the best breakfasts we’ve ever had at Bespoke Cafe, we jumped in Ting’s car to see the magical spaces she works from (at Sherwood). We were sold.

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On the way to Invercargill we stopped in Cromwell, to visit Brendan who had attended our session the night before. He’s starting up an urban winery in Dunedin – bringing Central Otago grapes into the inner city to make his wine, and then bring it back to Central until it’s ready to consume. We got to taste test it a bit early.

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In Invercargill we were met at the Pride offices, and quickly shuttled to the Community Trust of Southland board room, where 35 locals converged on the offices to hear more about crowdfunding (and experience some beautiful local brews, care of Nash and Invercargill Brewery).

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We talked about crowdfunding for not for profits, had a gentleman break out his bubble blowing hat (he told me he was a better bubble blower than I was!) and met founders, social entrepreneurs, and event organisers.

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After a few (awesome) Invercargill Brewery beers, we headed out for dinner at Louis’ with some of the attendees. We learnt about the local economy, films, attempts to keep young people local, Swedes (the vegetable, not the people), and why everyone there stayed in Invercargill.

In the morning, we headed over to Invercargill Brewery (in our PJ’s) for a shower and a tour.

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Day three Post_3 - smallAfter our tour, we met up with the Love Local crew to learn more about urban farming, vegetable bags, feeding locals who live below the poverty line and Brexit (because, Brexit even affects folk in Invercargill!).

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Thanks so much to the 50 entreprenuers, founders, and doers that we met with over our first two days on tour. Here’s to you, you inspiring people.

Next up: our talks in Dunedin, Timaru and Christchurch!

Big thanks to Jucy for sponsoring us to take this entire road trip, and to Innovation Queenstown, the University of Otago, Queenstown Resort College, Pride Real Estate, Innov8 Invercargill for all supporting this leg of the trip.

Don’t just observe. Do.

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Emerging out of a social impact get-together one evening last week, a question that keeps popping into my head parked itself in the middle of my mind. “Will these good conversations be turned into good action?”

Surrounded by great people from near and far, with the skills and experience to come up with ideas that can help to alleviate social issues like child hunger, the concentration of poverty, access to housing and domestic violence, a cynical voice in my head wondered “what will come out of this evening of commentary?”

One bright takeaway was a shared thought that I really believe in: that real social change doesn’t start with coordination from the top, from the observatory. It happens on the ground, in the places that are affected, by those that have been affected and want to wipe away the issues that plague their community. Social entrepreneurs, who truly understand the issue and can delve into the causes and rally their community to take action by acting themselves, are the ones who can make meaningful changes. Through pragmatism rather than perfect planning. Through walking rather than talking. There’s a disconnect between well-intentioned governments and institutions and the areas where social problems exist. Everything needs to be measured and justified and ultimately, gets slowed by the checks and balances of large organisations.

At the very core of government involvement is the democratic dilemma: that long term plans fall by the wayside in favour of short term stopgap initiatives. The misfit between short term government cycles and long term sustained social issues creates an incentive misalignment. For me, government’s inability to really confront social issues will remain — there’s always an easy excuse: complexity of measuring, risk aversion, lack of clear financial or social return, the effort required, the opportunity cost of addressing a single cause, etc — because it’s a slow moving machine.

It’s up to proactive problem-tacklers to lead and let government follow with their support — social enterprises and not-for-profits solving real and immediate issues by simply doing.

Now, with the full crowdfunding arsenal of Project, Equity and Lend, we want to give social enterprises and not-for-profits the chance to fund their causes through their communities. We want to let them thrive in an environment that they can co-create with their crowd. They choose their cause, their community and the social, financial and emotional rewards that they can offer to investors.

For investors seeking social impact, be proactive. You can’t rely on the quick and effective distribution of your tax money to help solve the immediate social issues that government struggles with. Instead choose your cause, the community you identify with and feel strongly about and support them in return for social, financial and emotional reward.

Social enterprises are changing New Zealand. You only have to look at the number of hungry bellies that Eat My Lunch have filled over the last year.

Crowdfunding exists to empower the doers of our world. Don’t just commentate on what someone could do to address existing social issues. Take a leaf out of the doers’ book — support them by pledging and empowering them to do.

Ethical Lending

Our friend, Raf Manji, Christchurch City Councillor and progressive banker, shares his thoughts on how the financial system is broken and how crowdlending can help to create a more supportive and sustainable marketplace between borrowers and lenders.

Raf Manji, progressive banker

 

One of the great opportunities for crowdlending or peer to peer (P2P) lending is that it can create a form of agency that does not currently exist in the lending marketplace. P2P is generally an unsecured form of lending, between individuals, where the amounts lent are usually small scale and distributed over a number of borrowers, in order to spread risk. As it becomes more sophisticated, lenders are starting to focus more on credit ratings and scores and use data to discern whom best to lend to. This is starting to drive a shift in interest rates and how those are calculated, with lower rates for better risks.

But what if lower rates actually lessened the risk of non-payment and default? I have just finished reading a very familiar story, where a borrower took on a short-term loan for an unexpected family need, and ends up being bankrupted. What kind of financial system promotes that? Well, sadly ours does. The need for short-term loans, outside a traditional borrowing format, such as a mortgage, can often be the straw that breaks the back of highly indebted borrowers. However, this straw is not the loan itself but the outrageously high interest rate that is attached. I would argue it is the unreasonably high interest rates (by that I mean anything over 20%) that cause default, not the actual loan itself. In other words, the default outcome is baked into the deal from the beginning.

We hear stories all the time of how a small loan balloons into an unpayable debt, and bankruptcy arrives soon after. Why would any rational lender promote this approach? Well, the interest rates are so high that they actually do get the principal back and a reasonable rate of interest, prior to the loan going bad. One might ask, why don’t they just charge a manageable and reasonable rate of interest in the first place, and not cause such personal misery to those least able to afford the loan?For me this comes down to the ethics of finance. Those who have easy access to capital, benefit both from lower rates and higher returns. The current financial system is heavily weighted against those who are not engaged in the tax-free housing Ponzi scheme and who rely purely on basic wages to survive. The low-grade “instant finance” lending system that services this end of the market is parasitic and unconcerned as to the outcomes they create. They argue they are providing capital to those who are unable to access traditional bank lending. That’s true and raises issues about our mainstream banking system. They would also argue that they price interest rates according to the poor credit of the borrowers. Of course their credit is poor! They live on wages and are often already in debt. The strain of that debt simply compounds away, with stagnant wages no match for the power of compound interest.

So far so bad, but what does P2P have to offer in this space? I would venture that it can offer a new form of ethical lending. This ethical lending is about the broader concept of helping people out, as you might do for a friend, not simply profiting from someone’s short-term cash squeeze. I would argue a lower interest rate would not only probably increase the likelihood of the loan being repaid but would be a fairer cost for the money provided. How interest rates of 20% plus (standard even for credit cards) can be charged, in an environment where, to all extents and purposes, the cost of money is negligible, is simply wrong. I propose that we look at creating an interest rate system where the rate falls each time a repayment is made. So where the initial rate may start off at a high level (I think 20% should be an absolute maximum), it reduces by a certain amount, for example, a half to one percent, after each payment, until it comes towards a reasonable level. How these numbers are crunched remains open.

The beauty of open, peer-focused and distributed systems like PledgeMe, is that they can experiment and iterate new ideas and findings, in order to reach an optimal outcome. For me, that outcome is where lenders make reasonable returns and borrowers pay reasonable and manageable costs for borrowing money. The current lending system is completely inequitable and broken and one of the jobs of PledgeMe has is to fix that and redraw the relationship between lender and borrower. No pressure!

Like a little piece of coal, we shine under pressure! 

 

PledgeMe Roadie 2016: Heading South

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Things have moved quickly at PledgeMe in the last couple of years. With more ways than ever for entrepreneurs and companies to raise capital and grow their businesses, we’ve decided to hit the road to tell you all about it.

So, whether you live in Invercargill or Kerikeri, we’re coming your way soon for a session on how your company or organisation can raise necessary capital through your crowd. In late June we’re starting with the Tour de South Island and we’ll be making stops from Invercargill to Nelson (full timetable below).

Why are we coming?

As New Zealand’s first crowdfunding platform we’ve noticed some of our most amazing campaigns don’t necessarily originate in our major cities… which is why we’re hitting the road this winter and bringing PledgeMe to you!

What are we talking about?

Earlier this year we set up CrowdfundingU as a way to help Kiwi companies get ready to equity crowdfund. We’re bringing the first session in this six part series to your town.

Things that we’ll cover:

  • What are the types of crowdfunding for companies?
  • Who’s your crowd and how do you communicate with them?
  • What requirements or documentation do you need for equity crowdfunding and crowdlending?
  • What’s next….

 At the end of the session you’ll have a solid idea of whether and how crowdfunding could work for your business (or other type of entity if you aren’t a company and you’re keen on crowdlending).

Where are we going?

How much does it cost?

Tickets are $20 each or 3 for $50. We also have a sponsorship opportunity in each location for companies wanting to support us on more significant level and become a bigger part of the event.

But there’s a catch: we’ve put a minimum threshold of 20 tickets sold for us to lock in each our South Island stop offs – so we need you to buy in advance if you want to come along!

How you can help

  1. Come join us for an evening in your home town by grabbing yourself a ticket
  2. Share this with your crowd (or on Facebook / Twitter)
  3. Are you one of our fabulous alumni? Want to come on the road trip WITH US? Get in touch with the team to chat more.

 

We can’t wait to visit you 🙂

 

How to: Annual General Meetings

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For those of you with a 31 March balance date like us, it’s getting to AGM time.

Running your AGM (especially your first crowd related one) can be a bit daunting. We thought we’d share how we do things to make it a bit less mystical (onesies are optional).

 

The nitty gritty

Registered companies are required to hold an annual meeting of shareholders (AGM) annually unless a resolution in lieu of a meeting is passed.

 

Typically, you need to have your AGM within 6 months of the previous financial year closing (eg. if your balance date is 31 March you need to have your AGM by 30 September of that same year) or 10 months if you fall under an exemption.

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