The alternative method of raising finance known as crowdfunding has become increasingly popular in recent years, as it offers a cost-effective strategy for startups to turn ideas into products and market them for profits. In 2016 it was predicted to surpass venture capital in the quantity of funding it generates, according to Forbes.
Crowdfunding attracts capital by requesting small donations from a large number of people. It’s a simple concept on the surface but can be more complex in practice.
The founder of Extreme Fliers and former Robot Wars competitor Vernon Kerswell only turned to crowdfunding after a failed attempt to attract investment for his Micro Drone on Dragons Den.
"I was only looking for £75,000, which is what I needed to build the product and make it happen," he remembers. "It seems laughable now that I'd give £75,000 for 40 percent of the company when you can now raise $3.5 million dollars and still retain 100 percent equity in the company. That's phenomenal. It's fantastic what crowdfunding has done."
He gained the investment through crowdfunding website Indiegogo, one of the leading platforms in the sector. The company brought together a panel of experts to provide their tops tips on how to do it.