The business world has a different face than it did years ago, more and more companies are working at recognising and cultivating the entrepreneurial spirit in the employees they employ.
ACCA’s report, Culture and Channelling Corporate Behaviour, suggests that individuals are loyal to the following three factors: mastery of one’s subject, autonomy and psychological relatedness of their values. The latter is evident in that a lot of employees are not satisfied in just doing their day-to-day jobs but they desire to serve their community by relating they job activities with the needs in society. “The entrepreneurial approach” has found fame in the corridors of business and more and more employees and businesses are enjoying the benefits of this approach.
CFOs and their team leaders that aim to cultivate this spirit in their employees are often faced with the challenge of financing projects proposed by employees. Crowdfunding is one of the ways that SMEs around the globe are financing their projects. Crowd funding can be used by CFOs that do not have the budget to finance all the projects employees desire to engage in.
Crowdfunding is by definition, “the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.” This is not a new phenomenon, the only difference is that it is now web-based and the pool for investors is much greater than before when one had to approach individuals they hoped would invest in their cause.
How does it work? There are web-based platforms that CFOs can go to or direct their employees. Indiegogo, Kickstarter, Onevest are some of the well-known ones globally that project creators utilise; in South Africa the phenomenon is still at its young stages, but there are platforms that have been established to cater for this need: startme.co.za, thundafund.co.za, jumpstarter.co.za, findfund.co.za. Project creators can create a profile typically containing a short video, an introduction to their project, a list of rewards per donation, and some images to elaborate. The idea is to create a compelling message that readers will be drawn towards.
Crowdfunding offers a lot of benefits to employees that seek to integrate their passion into their work and also to CFOs that want to avoid some risks associated with funding projects proposed by employees. Forbes presents the following as benefits of crowd funding:
- It provides access to capital
- It hedges risk
- It serves as a marketing tool
- It gives proof of concept
- It allows crowd sourcing of brainstorming
- It introduces prospective loyal customers
- It’s easier than traditional applications
- It’s free PR
- It provides the opportunity of pre-selling
It is free