Can A Startup Attract Crowdfunding Via Twitter With #mydndcomp ?

September 28, 2009 on 5:34 pm | In Uncategorized | 3 Comments

This is an interesting question and one that may be answered soon, at least from this startup’s little neck of the woods.

For some time now we’ve been battling along refining our product, learning a lot as we go, and funding the development from within.

We’re now at the point where v2.3 30 day free trials have launched and these start converting to paid subscriptions on the 23rd October to coincide with the release of v2.4 of MyDND.

So now is the time to really go for it and to that end, we should look to some external funding to help with the growth.

I noted with interest the successful raising of funds over the web by Trampoline Systems, but as Mike Butcher pointed out in this blog post, the offer was only to high-nett worth individuals so really that was more of a big wide Angel round.

We’ve always had a philosophy of trying to make returns for the little person (our investment to date outside of the prinicpals has come from friends and family), so after much pondering we came up with a crowdfunding concept with entry level investment of £100.

I posted this on the London OpenCoffee Club’s email forum and got some quite favourable responses. So what is it?

Well we’re in the business of selling DIY fully hosted websites by annual subscription. We’ve canvassed a lot of people here, in the USA and Australasia – and the consensus is our price of £50 a year (less than £5 a month) is fair and sustainable in current market conditions.

So let’s assume we sell some and they start converting to paid subscriptions come Oct 23. That means our websites will have a value.

Of course, in our database there is unlimited ’stock’ of websites and as ‘blanks’ (or currently unsold) they start at numbers 1.mydnd.com, 2.mydnd.com and so on (then change to username.mydnd.com as they sell).

We’ve decided to offer these blank sites in bundles of 10 for purchase at wholesale at £100 (£10) each. Then as they sell, we return to the investor £10 out of the annual subscription of £50 – and that’s recurring as they renew each year so on this basis providing 100% p.a. returns.

Our first release is 5,000 blank sites and progress can be viewed as we update the ‘market’ daily.

Some feedback has been that this could be a difficult thing to manage, but we’d hardly be able to call ourselves a software company if we couldn’t do that efficiently.

Of course, now the challenge comes of spreading the word as this is no use if no one knows about it, so we’ve decided to carve off 100 sites (recurring annual income value of £1,000) as a prize for a Twitter retweet competition.

All you need to do to go in the draw is retweet this blog post (using the button at the top left of this post) and on the 23rd Oct we’ll announce the lucky winner of 100 wholesale websites. It should be noted these will be numbered 251-350 in our database so are nice and early on the list in terms of potential returns.

For more info, this crowdfunding (micro-investment) concept is explained in detail in these pages along with a PayPal link to invest now.  

I’ll also be updating how this whole thing goes via this blog so if you’d like to follow progress, please take an email or RSS feed top right of the page….