Case Study: Fundsurfer making waves for Bristol SMEs and start-ups
With the advent of increasing technology in finance, more and more SMEs are seeking alternative funding options – like crowdfunding – which allow them to cut out the banks and garner real support and momentum for their projects and campaigns online. We chatted to Oliver Mochizuki – CEO and co-founder of Growth Hub support provider Fundsurfer – to find out what they do, what makes Bristol such a great spot for fintech and how to rope in a Simon Pegg endorsement for a crowdfunding campaign.
What does Fundsurfer do?
Fundsurfer is a crowdfunding and commercial finance platform based in Bristol and London. We provide a unique blend of funding options and support for amazing projects and companies – raising over £14M in three years for clients across a range of sectors.
What’s the climate like for funding SMEs at the moment, and what are Fundsurfer doing to help it?
The climate for funding for SMEs is getting better but is still suffering from the same systemic issues that have been faced in Europe for a long time. It takes 6-12 months to raise equity in Europe vs. 4-6 months in the US as an example. The UK is also very bad at providing growth funding to early stage companies.
Challenging this is a big part of our mission at Fundsurfer. We offer a hybrid model where we offer funding and the support needed to get investment ready, or in a position to crowdfund.
What does Fundsurfer offer outside of the more traditional fundraising avenues?
The practice of fundraising for business owners is such a big distraction when trying to get a start-up off the ground. Nigel Wilson – the Group CEO of Legal and General – recently gave a speech at the Social Stock Exchange’s “Annual Investor Conference.” He highlighted the fact that SMEs in the UK mostly use credit cards to finance their growth – with 55% opting for that route, as opposed to a mere 3% using equity finance! How can this be happening in London, a world capital of finance? The Government can’t solve the problem and the banks are too focused on the short-term. This is where Fintech platforms can really make a difference.
We combine funded investment readiness support with access to all the funding options that a business needs for its lifetime – from cradle to grave. For our clients, we provide direct funding services on the platform including Crowdfunding and community shares. We effectively work as a bolt on to clients’ existing fundraising efforts, with our expert team acting as matchmakers and introducers to investors, VC’s, Angel Consortiums and Family Offices around the world.
Accessing the right investors at the right stage is essential and the landscape is shifting quickly. Crowdfunding has become the largest pool of capital available, raising $38bn last year compared with venture capital’s $36bn. For the first time, there’s a funding escalator which reaches the ground floor, enabling anyone with a network and a good idea to raise some funding via crowdfunding or start-up loans.
We aim for a 90-day close when looking at equity finance, which is half the industry standard time to raise investment, but working against this timeline keeps the pressure and momentum on the deal. We are attempting to change the culture and provide a different way forward.
What do you think it is about Bristol that makes it so conducive to starting up and growing a business?
Bristol has been a great city to launch a start up in. I already had a strong connection through living here for the past 20 years but the innovation and spirit of collaboration has been brilliant for us, encouraged by a wide range of business initiatives and networks like the West of England Growth Hub. Word of mouth is one of our biggest sources of new clients. Working with strategic partners has been a key part of our success. Fundsurfer has become much more than a fintech platform alone, it’s also a network of entrepreneurs, innovators, influencers, investors and thought leaders and it’s the unique Bristol atmosphere and framework that’s allowed that to develop.
What’s a good example of a favourite local project of yours?
When we first launched Fundsurfer, we focused on Bristol and the first local project that comes to mind is the wonderful 20th Century Flicks – one of the last indie video shops in the UK. They needed to move premises urgently and were turned down by their bank for finance. The founder came to meet with me and I explained the way that they could deploy crowdfunding, harnessing the massive database of customers, past and present that would support them.
They also remembered that Simon Pegg owed £13 in late fees from his time as a student here and tweeted him the Guardian article which featured the project. He retweeted it to millions of followers and their project went crazy, raising thousands of pounds in 24 hours. Needless to say, they went on to surpass their target and you can find them at Christmas Steps in their amazing new shop!
A more recent example would be the very impressive entrepreneur Ewa Rucat, who launched a project to fund Bristol’s first Cat Café, You&Meow. Nominative determinism or what? She put in so much hard work and had a “never give up” attitude. She ran a brilliant crowdfunding campaign; full of great content and her messaging was very strong. She sent hundreds of hand-written thank you notes to her supporters, which was a nice touch. You&Meow launched a couple of weeks ago and is doing really well.