Don't F*ck, but Fund the Crowd - Crowdfunding

What is crowdfunding? And how could it benefit the events industry. Questions for Dirk Coeckelbergh who wrote the book 'Don't F*ck, but Fund the Crowd' on the subject.

Kevin Van der Straeten
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Hi Dirk, welcome to the studio.

Thank you, Kevin.

You've written the book: Do not f*ck but fund the crowd.

A bold title.

Do you think so?

Thank you. We worked hard on that title, believe me.

But let's start with explaining: why this book? Why did you write a book on this subject?

Yes, well I always try to write books...

It's my fiftieth book I think, five-zero. I always try to write books that fill a whole in the market. And as I'm consulting SMEs and non-profit organisations on finance, I find out, in fact, that there is...

And it's also the case in France. It's also the case in the Netherlands. It's also the case in Belgium. That there is no up-to-date, neither book, neither website on which crowdfunding platforms are available and still active.

There is a lot about which crowdfunding platforms did exist. And what did they do? But a big majority is out of the market today. And so I thought: it's time that someone writes a book that's usable for one or two years. And in which you can find, also, the names of those who've stopped.

Because SMEs who do research, they find seventeen names, and nine of them stopped already. So, they're losing, in fact, a lot of time.

Yes, but we will come back on why so many stop. So fast.

But first: in your opinion, what's the definition of crowdfunding?

Yes, that's a very good question.

The definition I use is that a third party-platform helps you, via internet applications, social media or others, to fund your project. And tries to get the money from the crowd. That's in fact, in a rough word, crowdfunding. There are sixteen forms. Eight major forms. Four main forms of crowdfunding, but that's in its essence in fact the scheme. The crowd funds you through a platform.

Yes, but what I learned from your book, is that's it not always money that is funded. It can also be people helping. Or stuff like that.

Yes, indeed. It's a very huge misunderstanding that crowdfunding only funds money. It can fund money. But it can indeed also fund expertise. Volunteering time for example. Relationships. Furniture. It can give you knowledge through feedback from the crowd about a new product. It can bring you participation. Into a certain field. A political field or an ecological problem, for example.

As you say it, crowdfunding sounds very attractive. A lot of businesses are looking for money or other resources. Why isn't there the big breakthrough yet in crowdfunding, you think?

I'll have to correct you.


There is no big breakthrough on crowdfunding in Belgium.



But Belgium is a very bad apprentice, I would say.

If you look to the UK, which was the lead - it was in the EU before - in the previous EU, before it left. Look at the Netherlands. There, in fact, crowdfunding, especially crowndlending, the funding loans, is very, very important. In the UK, for example, the ten major crowdfunders do more loans than the banks.

Oh, that's impressive.

That's very impressive. In France, there are crowdfunders who have 150.000 non-profit organisations, as clients, to fund. In the States, there are websites who easily do one to two billion US dollar in a very specific niche market. Like, for example, education. Schools. Universities. Scientific research. But you're right...

I come back to your question. You're right, in Belgium it is not really a very big success yet.

And, in your opinion, where lies the difference between all those countries. Is it just not known here, yet? Or are there other reasons why it's not taking off in certain countries and in others it does.

Yes, well, in fact there are two types of reasons. There are reasons for success. And there are reasons for failure.

If you look at the reasons for success in the United States, for example. In the States, there is a long tradition of financing SMEs. Outside of the banking world. So in fact, crowdfunding as a new instrument, went into a very large market.

If you look at the UK the fiscal advantages are very, very important for the investors. And so, of course, investors like risk rewarded investments which are also fiscally advantageously rated.

If you look to the reasons for failure, we come to Belgium. A lot of the crowdfunding platforms did not survive because they didn't have enough volume. There were too many competitors at a certain moment in the same markets. Generic markets or specific markets. And so, of course, you need volume to survive. Because a platform takes between 0 to 16% - sixteen is very rare - as income on the volume raised. And, of course, you cannot live on 2-3% of a low volume. In those reasons for failure...

I found out, for example, in the Netherlands all the design platforms, except for one, went financially....

I would say bankrupt or did have to liquidate.

And I think, also, that in that case, very probably, design is a very, very difficult object to buy at a certain distance. We talk about time. We don't talk about old art where there is a certificate from an expert, of course.

Yes. Dirk, if you look at the events industry. How could crowdfunding or crowdfunding platforms help our industry, in your opinion?

Oh, yes well, outside of Covid-periods, it could help a lot of course.

But, in that case we go more into the field of sales crowdfunding. To the crowdfunders you can sell whatever you want. New products. New music, for example. But let's not forget this was a market which was already far advanced. Even before crowdfunding came up. But there are different applications, I think.

For example, in the United States there are a lot of very nice applications. In Belgium they all failed. There were some applications like Akamusic, for example. But they all didn't have enough volume to, let's say, give really good results.

But sales of tickets is the best example, I think, you can give. And, of course, creating a platform on which artists can give things away that you normally cannot get from an artist.

I can give an example: exclusive interviews. An encounter like this one. You are the artist. I am the client or the guy that gave you money. And I invite, at my home, twenty people or two hundred people. And we have a discussion with you or you give us a private concert. All that is possible through crowdfunding.

Presales. You could sell the best tickets to those who support you. Some crowdfunders did this for monthly support. Which means you give your preferred artist ten dollar a month. And in exchange for that you get everything before all other fans. So it costs you 120 euro or dollar per year but you get something from your favourite artist in advance.

Financing the first disks, for example, also is very, very often done in the market. Even in Africa, today, through crowdfunding. But of course it stays not an easy market.

But, for example, an example I heard of is: festival organisers. Normally, what they do, is: they book artists. They organise the event, then start selling the tickets. And then you come to the concert. But that's taking a huge risk.

If you turn it around and say: okay, we will first do crowdfunding. Sell tickets. And if we sell enough tickets we will organise the event. And if we don't, you get all your money back.

That are also examples, I think, that are very interesting for our industry.

Yes, of course. Presales. You sell first and you organise afterwards.

Of course, it's not an easy market. Today you can book almost every artist, because they are all free. But in a normal world, presales, if you don't have an option, is a very dangerous world, of course. You cannot ensure, I think, presales with an insurer, if you don't have a contract with the artist. And if you don't have a contract with the artist, you risk that he's not free. You know that for, especially famous, artists, they make tours. And you have to fall into the tour sites, et cetera, et cetera.

But of course it works. It works for small events. Today, even in the Covid-crisis, it works.

Could you also use...

You said volunteers and things like that can also be crowdfunded. Could that also work, for example, if you say: okay, I'm the organiser of Rock Werchter or Tomorrowland or whatever and I need people to help.

Yes, you can. There is...

In almost every country, the US, France, Belgium, the Netherlands, there are sites that exist, where you can present yourself. Especially and mainly if you are a non-profit organisation. There you can get, very easily...

The demand is often high. Today it's very low, I see. but the demand is often very high. But also the candidates are very numerous.

Why? Because people can come for free and listen to their favourite artist. Yes, there's a huge market for that. Indeed, yes.

You were talking, at the beginning of the interview, about those platforms. The only platform I really know is Kickstarter, because I'm a gadget freak and I buy a lot of stuff on Kickstarter.

What other platforms should somebody, working in the event industry, know?

In the event industry? I'll have a look at my list.

Well, for example, for sailing around. If you want to organise something for sailing around, Ekosea Outdoor, for example. Okay, it's French. It's not Belgian. But it has a very, very high success rate.

Success rate means: on every campaign, which is launched on the site, if there are a hundred campaigns, success rate gives the number that does succeed in getting the money it needs. And Ekosea Outdoor is doing something like 80% today. Eight-zero percent.

That's impressive.

Which is unbelievable.

You cited Kickstarter but there is, of course, I think, personally...

You didn't ask the question, but I'm going to say it anyway. I think the best, I think, is Ulule. Ulule has a success rate of something between 60 to 98%. In a lot of matters. Everything I looked at was in that range. Which means you have six out of ten chances that you get financed totally for all the money you need. And in some markets it even goes much higher.

There is Ulule Voyages, for example, also. If you want to take a trip with other people. 81%. Patreon is very, very good for artists. Bandcamp. ReverbNation. They're all marvellous sites, I think. For your sector.

There are...

In these times, a lot of companies in our industry are in trouble. Because the event industry is closed for more than a year now. And they're looking for money to rebuild their companies. Most of them are currently looking at banks to help them out. Could crowdfunding also be a way to get funded to get your company through this crisis?

Yes, we could imagine that we do presales on a number of tickets for a number of artists who are from the same field.

For example Rock artists. That you say: I'm going to invite, from the list of those fifty Rock artists, twenty of them. Next year. In 2022 or 2023. You pay today and you get the tickets afterwards.

Yes, or even...

Not only organisers. But for example: I'm a tent rental company. That could also be a case. In financial trouble right now because I can't put my tents in the market  because there are no events. Those companies are also looking to finance their debt at this moment.

Yes, what I've seen, but that's not very easy, is also there, presales.

People that sell: you can use our XYZ furniture. Two or three days. The day that you organise something. And we give you a discount of 20 or 30%. I've seen it in the market. It's not easy. Because people need, of course, to trust that you will still exist.

Yes, obviously.

What I also see are shares. Some people try to dump - I'm sorry for using that word but it's a bit dumping of course - try to sell less expensive than normal. A part of new shares. So, they do a capital augmentation, in fact. Or a net worth augmentation. With third parties. Of course, those profit from the fact that it's cheaper today than normally. But okay, it helps, of course, also people to survive.

Yes, maybe one last question. If I look at those Kickstarter campaigns I know. And you were already talking about success ratios.

What I do see is that people who organise a funding put a lot of effort in creating a great video to explain their product. Good text. Interact with the community. Even start advertising on social media to get attention.

What is the success for having a good crowdfunding campaign?

There are something like fifty factors. I'll pick some out. In fact, women do it better than men.


And that's on all sites, like that. Because women are more realistic. Are more modest. So they ask more realistic amounts. So they get easier to the amount they want to get.

Secondly: you'd better start with a team. Teams do up to 30% better than individuals.

Innovation works better than old fashioned products or styles. Whatever has to do with innovation and technics, you cited Kickstarter for example, works very, very well.

If you are a non-profit or a profit organisation, don't ask money for general funding but start a new line. Start a new project. Because new projects work better than the old financing. Or financing the traditional way of working of the company.

And so we can go on and go on.

If you, for example, give feedback to people during your crowdfunding, you get up to the double of when you don't go into contact with the people who already gave money. Because seriously, they will give a second or a third, or a fourth time even, money. The more you talk with them, the more you interact with them, the more you get, normally, from them.

And the book is full, in fact, of that type of suggestions. I looked at all the studies and I put them all together in a logic order.

People who want to know more, they can buy your book, obviously.

So, Dirk, thank you very much for sharing your thoughts on this subject with us.

No problem. Maybe you should say the book is in Dutch.

Yes, that's true. Do you have plans to also translate it or not yet?

I might do a book in French. But there is no plan for English, to be honest.

Not yet, but maybe that changes.

And you, at home, thank you for watching our show. I hope to see you next week.