Marillion must be one of the few big bands that won’t set foot in Spain during the 2023 concert season. Steve Hogarth It will be heard live in the UK, Germany and the Netherlands. Marillion, in addition to their music will go down in history by another very different element: finance.
In 1997, they could decide to stay or revive through periods of musical depression. They decided on the latter. For this, they had to return to the United States, where they had a vibrant fan base. They only needed $65,000 to jump over the lake and organize the tour. They didn’t have them. To achieve these, they created the first mass funding system, which was later christened crowdfunding. They were convinced by one of their most loyal fans, Jeffrey Pelletier, against the musicians’ initial doubts. In this modern crowdfunding, they asked fans to finance their tour via the web. In return, they were given a special signed report.
even the most unusual
Since then, crowdfunding has become one of the most used modern tools to finance even the most extraordinary. On the other hand, the small or medium-sized investor cannot receive anything, share, debt commitment or be paid in kind. The crowdfunding platforms are numerous and the freedom of choice is complete. An example is Kickstarter. Announces that they have already financed through this 239,000 projects worth $7.3 billion. From artistic projects to NGOs.
If you have an idea that you think is great and you need money to make it happen, you have many and varied formulas today. In the past, before the rise of modern capitalism, financing of projects could come from a patron—from a monarch to the Church—sometimes altruistically; banks that started to give loans with different methods; family and friends who can lend capital in exchange for becoming shareholders or lending money. If the project failed, there was a risk of relying only on friends and family: eternal enmity with someone very close. There is a young American businessman who installed this system in 1903: Henry Ford. He succeeded in promoting the production of the first popular car, thanks to the money he received from 11 friends/acquaintances that allowed him to raise the capital.
Franco-American after WWII Georges Doriot He pioneered the founding of American Research and Development, the first venture capital firm in history, in Boston. Its aim was to establish a non-banking financial system that showed its weakness in the stock market crash of 1929. Startups would have the opportunity to solicit private money in the form of capital or debt from individuals grouped through a fund. Fundraising has officially begun.
Large companies and entrepreneurs lead the way in financing new ventures by contributing money and advice.
Funds investing in companies of all kinds and in very different formulas have become part of the business world. Business finance terminology has spawned all kinds of tribes, from incubators to funding the most promising start-ups to accelerators. Even financial institutions have decided to create their own venture funds to complement their loans. Big companies and businessmen from Telefónica Wayra until Juan Roig They have their own funds with Lanzadera. Private business schools, state universities, chambers of commerce, business circles, employers… they form fund groups seeking investors in the world of business angels, family offices and bosses of all colors.
two functions
entrepreneur should decide on two functions. First: what is the financial structure that best suits your needs? Betting with shareholders on broadening the social base is not the same as deciding to borrow money, it often yields higher returns due to higher risk. Second: what is the level of participation in the management of the partner or provider? Do you need to be very active or just a simple observer and occasional insight?
Trust and information transparency are key to determining the degree of relationship. Giving 60 euros to each of a thousand fans to run the crowdfunding project isn’t the same as delegating monthly tasks to a venture fund or a business angel, who could turn more of a demon than an angel if the numbers don’t come through. outside
Does it have the capacity to innovate in the financial world? definitely yes. If not, ask Marillion and the doors they open.