Raise your game

Find out if you're ready to crowdfund, whether to garrote or grow your business and how to simplify your life.

I’m toying with crowdfunding equity instead of going down the traditional angel/ VC route. Why shouldn’t I?

It’s been heartening to see the early success of the two main crowdfunding platforms, PledgeMe and Snowball Effect. For now they are demonstrating that crowdfunding can work, with the lousiest deals struggling to get funded and the better ones funded. Perhaps there really is wisdom in crowds.

Crowdfunding works best for companies with appeal to a critical mass of investors. The easiest deals have been breweries and wineries, with three successful so far. Other successes, such as Aeronavics and movie The Patriarch offered a slice of cool, while CarbonScape had a green market to appeal to. So take stock of your crowd; think particularly about your customer base, people who believe in your space, and then assess whether or not they can invest enough.

But before you start, make sure that your company is ready for investment, which means having a great product, growing revenue and a solid team and governance. Be clear on what the investment will be used for, and how you will manage such a large number of investors.

Which brings us to another issue: is this a precursor to a public offering? If so, then it can help gain publicity and investors. However, the maximum amount possible to raise by a crowdfunding campaign, $2 million, may be insufficient to get you to a good IPO. That means you may need larger investors, and you will need to take care that they are not scared off by a crowdfunding round. It also implies you should leave value on the table for the next round, so that crowdfunded investors see a lift in value in the next round.

The sorts of companies the Punakaiki Fund invests in tend to want the simplicity and relatively low pain that comes from one or a handful of investors per round. The best companies tend to be able to raise money easily, and can choose to go out to the crowd as a way to get their customers or fans on board, rather than doing it solely for the money.

My business is half a success. Which means it’s also half a failure. How do I decide whether it’s worth carrying on?

It’s time to work on the business, not in the business, and figure out whether this can really work. The options are to sell or close the business, shrink it down to the core that is good or to make major changes to attempt to grow. I left out the option to keep drifting along, as it seems like you know that is not acceptable already.

I would guess that the fact that you are being honest with yourself means you know what the main issue is already, and need the courage to address it. So step out for a bit, on your own, with an internal team or an external facilitator, and create the three possible paths forward. Could you sell the business – either to your partners or to an external party? Can you remove the lines of business, people, customers or other issues that are holding you back? Can you find and press the grow-button to accelerate change?

Once you have the options, then decide what to do. As you think, be guided by the joy you felt when you started the business, recall the impact you wanted to create and the reasons for starting. Give yourself a deadline and the courage to make the change.

I’m so busy with so many things, and I just don’t know how to juggle. How do I manage it all? How do YOU manage it all?

My advice is constant on this – prioritise. And that is not just selecting the top few things to do, but actively deselecting the remaining things. This will be painful, but cathartic as well.

I recommend reading The life-changing magic of tidying up: The Japanese art of decluttering and organizing by Marie Kondo, a brutal approach to decluttering your home. Kondo recommends holding each item you own, one by one and by category (for example, all the clothes at once), and asking “Does this bring me joy?” Any less than fully joyful items are then consigned to large plastic bags and thence the trash.

The book is hilarious, the author’s description of herself as a child frightening, but the actions of having to discard most of your things are very familiar to those who have travelled to live in new places.

After reading the books my closet and electronics shelves suddenly became a lot less full, but unfortunately that was it. Some things I have given away, but the remainder sits in the hallway, waiting for me to sell or give away. It physically gets in the way, and is a classic demonstration of how prioritising is incomplete without actively deleting.

It’s true though that some of those deprioritised items or tasks can still bring us some joy, but time moves on, fashions change and new challenges arrive. Be ruthless, and accept that your output will be much better if you take on a smaller number of challenges, and do them well in your newly decluttered life.

And on to my decluttering. I’ve decided that this will be my last agonising column for Idealog, which no doubt will bring joy to ever-suffering editors who are wondering whether I know what a deadline is. My thanks to Vincent, Martin, Matt, Hazel and Nikki for a wonderful journey, a journey which not only bought me great joy through the activity of writing, but also introduced me to my wife. Idealog is a wonderful institution, and long may you continue to identify and profile the overnight success stories of tomorrow.

Before you start crowdfunding, make sure your company is ready for investment, which means having a great product, growing revenue and a solid team and governance. Be clear on how you will manage such a large

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Lance Wiggs finds that investing money is a lot more fun than raising it. He tweets at @lancewiggs, offers highly expensive consulting services and after four years is finally admitting that he lives in Auckland.