PledgeMe’s Anna Guenther on Gandhi’s way to win the crowd: ‘First they ignore you, then they ridicule you, then they fight you, and then you win’
Crowdfunding company PledgeMe hit the $5 million magic number giving the company a reason to celebrate. Certain media reports are already forecasting doom and gloom, seeing the crowdfunding market as well, crowded. Idealog caught up with PledgeMe’s founder Ann Guenther, who also calls herself chief bubble blower, to catch some of her thoughts on equity crowdfunding.
Q: You have completed your first year of operations recently capping off a year of living, well, crazily. PledgeMe has helped raised $5 million from the crowd for various projects and investments. Share with us three hardest hurdles you have had to cross to get to where you are?
A: It’s been our first year in equity world (well – first 6 months!) but we’ve actually been around for just over three years, focussing initially on the project space. Here are some lessons we learnt.
1) Educating the crowd. We’ve had to put a lot of time, effort, and good old elbow grease into getting folk to understand what crowdfunding is and how it works well
2) Resourcing up. We were super boot strapped to start with, and it took us awhile to build up to the great team we had today. Getting beyond the co-founder stage to the rocking team with diverse skills stage was harder than it looks!
3) Backing ourselves. We’ve had a lot of advice in the last three years, most of it contradictory! It took us a while to learn to back ourselves on what we know.
Q: What are some of the highlights of the last year? What made these moments sweet?
A: One of my biggest highlights was at 6:04pm on 28 January 2015, when Stu and Sam hit the $100,000 raised mark just four minutes after going live with their equity campaign for Yeastie Boys. In the end, they raised half a million dollars in half an hour and really proved the power of equity crowdfunding. This was especially sweet as the Yeastie Boys crew are potentially the loveliest people you’ve ever met, and they really wanted to work with us to prove that you can do equity crowdfunding differently.
Three is not a crowd. They love to have fun at PledgeMe
Q: What were some of the not-so-savoury moments PledgeMe has been through so far?
A: Back in the early days, our transaction provider decided that crowdfunding was illegal based on some Wikipedia research. Those two days were two of the worst days of my life, but we really had our crowd rally behind us.
Q: What do you think the NZ crowd scene is likely to be, going into the next year, then two of three years down the road?
A: I think the crowdfunding scene is going to help a lot of companies get funding that might not have traditionally been supported, as well as more diversity in who is getting the funding (as well as the folk that are funding). We’re already seeing gender and age diversity on both sides of that coin.
Q: There have been some ramblings recently about the valuations and financial projections presented to the crowd. How vigorous is your process in ensuring these financials aren’t over the top, and unrealistic for the moms and pops who have little financial experience investing in crowdfunded companies?
A: We leave the creation of financial information to the company, and due diligence to the crowd. We do checks to make sure the information isn’t false or misleading, but we really think it’s up to a company’s crowd to decide.
Q: On normal listed companies, the Financial Markets Authority comes down hard, and the Stock Exchange comes down hard on companies. Do companies presenting themselves on crowdfunding platforms ‘get away’ a lot easier?
A: I don’t think this route is easier, there is still a lot of work getting your crowd on board. And, in some ways, it’s making the traditional rounds with family and friends a bit wider and bit more streamlined.
Q: Has there been sufficient education around the risks of investing on crowdfunding? What can be done to improve education, you think?
A: I think general financial literacy in New Zealand is lacking, but the warning statements around equity crowdfunding are strongly worded and repeatedly provided to potential pledgers. I don’t think it’s education on risk, really, more general education that is required.
Q: What would you say to the haters, those waiting for something to turn belly up, then go ‘tsk tsk’ and ‘we told you so’?
A: It makes sense that people are scared, as it is a big change from the old way of doing things. But, as Gandhi said: “First they ignore you, then they ridicule you, then they fight you, and then you win.”
Q: What keeps you awake at night?
A: My non stop to-do list running through my head. I never used to be a morning person, but that list has turned into a pretty effective alarm clock…
Q: How are the onesie days going at PledgeMe?
A: They’ve been in our lockers over summer, but things are getting a bit cold and rainy down in Wellington again…
Onesie day at PledgeMe