Did you know that you are more likely to raise money from ‘the crowd’ if you have over 1,000 Facebook friends, or that there are four different types of crowdfunding? With innovation money from Europe, academics are applying their expertise in crowdfunding to support start ups.
When you team up an entrepreneur who is launching an innovative new app with an ARU academic with expertise in real-world business economics, you might expect the entrepreneur to benefit from the partnership the most.
But equally beneficial, as Professor of Economics Emanuele Giovannetti explains, are the insights that such collaborations provide for the academics themselves.
Anglia Ruskin’s Emanuele and his PhD student Will Davies were paired up with Babita Devi, an entrepreneur who has created the mySircles mobile app. Innovation Bridge, funded by the European Regional Development Fund, provides individual entrepreneurs or small start-ups with free support and expertise from academics to develop a new product or service. “Innovation Bridge acts like a platform, matching demand and supply for consultancy based on academic research,” says Emanuele.
mySircles is a new app which will allow parents to build up a digital timeline of their child’s journey through school, and to communicate with other parents. “The idea was to create a secure network for parents and children and teachers, that could create new communities and new forms of interaction to organise events.”
The aspect of the project that Emanuele and Will were able to offer support in, though, was its funding. Will explains: “Babita came up with the general idea of crowdfunding, which was why we were brought in.”
For crowdfunding is the subject of Will’s PhD thesis, and the focus of one strand of Emanuele’s current research. It's defined in the Oxford Dictionary as “the practice of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount, typically via the internet.”
Emanuele continues: “We thought: this is a very nice case study that matches what we are studying based on large numbers of experiences. Will has been collecting tens of thousands of pieces of data on the features of crowdfunding, and it was great to have the possibility of interacting with an entrepreneur, and for us to think: OK, how can we provide her with our insights, derived from the quantitative research? It was a good match because we had a very large evidence base of data.”
Babita had experienced difficulties raising money through traditional financial channels, but Emanuele and Will were able to steer her towards the best type of crowdfunding. They have identified four types: reward-, equity-, debt- and donation-based. They felt the reward-based model was most appropriate for mySircles. They also suggested a timeline based on other successful crowd fundraising they had studied.
For the academics, working with MySircles uncovered some useful insights that looking at large-scale data would not have revealed, allowing them for the first time to focus on the specific crowd funding aspects of a specific start up, and to apply their theories. For example, difficulty in outsourcing the development of the app gave them a lot of information about outsourcing. “We discovered that it’s actually very difficult to get mobile app developers based in the UK,” observes Will.
Emanuele continues: “When you start building a relationship with someone, so many different new problems might be discussed that might not have been expected”. Other insights included looking at the role of gender in entrepreneurship and crowdfunding, and potential future mutually-beneficial collaborations that can provide vital usage data for quantitative analysis of academic models and theories.
“It establishes really good connections – something which is really, obviously, very important for academia,” affirms Will. And this approach is important for Anglia Ruskin because, as Emanuele puts it “it’s important for our research to have an impact outside academia. Something we learned from Babita and mySircles was that she found us more approachable than other universities. It’s often difficult for an innovator to have access to academia.”
But not, it seems, in this instance. So with the mySircles project now on track to launch its funding bid, and ongoing collaboration during the project already planned for data collection and analysis post-launch, the benefits of Innovation Bridge for all concerned seem assured.