Crowdfunding or community financing, as I mentioned before, is one of the most sympathetic forms of investment for me. Many small investors trust you and your idea, they believe in its implementation, so they are willing to buy your product, start your startup, and finance the production of the product. Unfortunately, crowdfunding is not smart money, but it doesn’t even actively involve “investors” in what you do. They support you and that in itself is a great gift.
After choosing this form of financing and browsing through the websites of potential partners, we selected one of the companies and thought we had found a simple and striking solution. At that time, we had not yet seen how complex a community and its behavior is, so we can expect surprising twists and turns. One first designates a route and plans how, when, and what are the milestones for that journey. People envisioned an easy way at the start but it quickly turned into an eternal cycle and we are still facing issues and those who come after us will struggle as well.
The first hit came when we logged in to Indiegogo from Hungary, with a Hungarian registered office and a Hungarian bank account number, around December, and started uploading our campaign page. We made the first graphics, video, and already calculated how much the product should be sold for. In the first days of January, we suddenly woke up to the fact that, unfortunately, this opportunity was closed and it is no longer possible to launch a campaign with Hungarian data. After the first fright, we concluded that it is no problem, we will solve it! A walk to Austria, an Austrian bank account number, and we can go on. But of course, it wasn't that easy either ... Previously, it was enough to have a bank account number from a country on the list of countries provided. However, the rules that come into force at the beginning of the year state that in the case of an individual, citizenship must be obtained, and in the case of a company, the company must be registered in the countries listed. It turned out that Hungary's membership in the European Union is not so evident for Indiegogo, because the campaigns only give opportunities to Western European countries, and the Eastern bloc is not suitable for that. We’ve also started a crazy search for acquaintances who live in one of the countries on the list and would be willing to launch our campaign from their own country on their behalf. Then, of course, the legal question arises as to how our established company in Hungary can transfer the rights that re necessary to launch a campaign, in connection with this patented product, and how the legal obligations undertaken by the person initiating the campaign can be transferred to the company. In the end, it seemed a simpler solution can be to set up a company or a subsidiary in a country. It also turned out that the currency in which one starts the campaign is incidental because small investors who apply during the campaign have a bank account in different currencies. We plan that 85-90% of our prospective customers will live in the U.S., so they will have a dollar-based bill. Thus, when we launch a campaign from an EU country, in euros, the exchange rate risk is high due to the changeover and it can also create uncertainty for small investors who would support it. So, for us, it’s best to start the campaign on a dollar basis.
Among the advice given by Indiegogo was the one really important moment that their existing marketing machinery reaches 8-10 million people a month and thus they do the business for themselves and thus for us. On the other hand, they insist on some self-determination or activity that proves the legitimacy of the thing you make and that people are interested in it. So, as it turns out, after a certain number of subscribers, they just start using their marketing channels during the campaign, but that’s understandable, they can’t blame themselves, they can’t support all sorts of thoughtless things, just stories that have already taken steps to success. There is a complex calculation that can be used to determine how many subscribers need to be recruited on their own before the Crowd-funding campaign starts.
This is the number of 6,000 subscribers that we need to reach to get a green light and start our campaign.
subscribe here: https://www.indiegogo.com/projects/lavos/coming_soon/x/22919945
The subscription itself does not yet involve a purchase obligation, but those who sign up for the subscription will be taken to the finish line to be able to purchase the products. LavosBall will be produced in a certain quantity in the first round, as the campaign launcher can prepare for it properly and take responsibility for it. Those who have subscribed and registered on the Indiegogo site will have the opportunity to make a purchase. As soon as the campaign has started, subscribers will be notified.
Here I am now describing some data on the two largest crowdfunding companies;
this may help others in deciding where to start. The link bellow can may provide some guidance:
Kickstarter is one of the biggest names in crowd-funding, with more than 158,000 successful campaigns and a $ 4 billion pledge, or amount offered. Indiegogo, a smaller platform but very successful, is raising nearly $ 2 billion. Both interfaces have their main categories, a list of which can be found online or at the link below. In terms of company policy, Kickstarter is less open, Indiegogo much more so. The latter also provides help and applies several new improvements to its interfaces, which greatly help make the campaign manageable and transparent.
Indiegogo has a system called InDemand, a post-campaign financing solution that bridges the gap between community funding and commerce, meaning that after a successful campaign expires, sales can continue on similar terms to the campaign (in the pre-purchase form). Unlike Indiegogo, Kickstarter does not have such an interface. You can move from Kickstarter to Indiegogo if the campaign was successful, but backward this is not allowed by Kickstarter, you can only participate first. It is important to note that after a successful Kickstarter campaign you can continue on Indiegogo in InDemand sales.
The value of the help provided by Indiegogo, in my opinion, is quite high, as most of those who start on such surfaces are inexperienced and no one is as up-to-date as these companies themselves.
We are now in the process of establishing a subsidiary in the United States. With this company, we will launch our campaign as soon as we have 6,000 subscribers, and it is planned that after a successfully closed campaign, we will be able to deliver the products in the quantity we have agreed to by Christmas. So, all the small investors who support us can get their hands on LavosBall by the end of the year.
Thank you so much for your trust! Not only does it make us happy, but it’s a huge help to get started. Let's write this success story together!