We commented last week that at Fellow Funders we believe that, given the development of crowdfunding, the time to start asking ourselves if everything is fundable, and the time to make the investor and the project promoter aware that # NOEVERYTHINGGOES has come. We must begin to discriminate between the good and the bad, always applying professional instruments without any discretionary power.
What questions may arise?
This previous reflection leads us to new questions: Are all startup projects fundable? Are all projects presented for funding through crowdfunding truly fundable? Is the investor fully informed of the degree of risk of the projects presented to him? When an investor invests through a crowdfunding platform or an investment club… Does he do it with professional criteria? Does it respond exclusively to marketing criteria or to follow someone significant who is used as a drag for the rest of investors?
Turning an idea into a profitable, scalable and sustainable business model is, undoubtedly, the main purpose that any entrepreneur should guide when setting up his company. Is this axiom being fulfilled on a regular basis? Does the entrepreneur have in mind that every business should generate sales from day one and that its main source of funding should be the payment to its customers?
Fellow Funders answers the initial question of this article. Not all startups are fundable, the business model is important but it is even more important that the team is balanced, properly sized and knows the mechanisms that allow adjusting its business plan and enable a flawless execution of the idea.
As we commented some time ago, at Fellow Funders we think that perhaps too much importance is being given to the possible startup-unicorn (without a profitable economic model at present but with “great” future expectations and that only survive by successive rounds of funding). We are despising the startup-roach (profitable business, with special care of its suppliers and customers and with smaller size but greater flexibility and adaptability). These small startups will become the future SMEs and with their adaptability and intensive use of technology will allow to regenerate the productive fabric of Spain.
At Fellow Funders we continue to believe that equity crowdfunding investment is an interesting product but always keeping in mind the need for portfolio diversification and the risks assumed. We also believe that Trust, Transparency, Security and Monitoring, our operating standards, must be more than mere words or good wishes and must be translated into effective commitments with investors and project promoters.