July 5, 2018
How to Identify Funding Sources to Scale Your Coworking Business | Part I: Crowdfunding
Scaling your coworking brand presents itself with a range of challenges – one of which is securing funding to fuel growth.
If you are working to expand your coworking brand then you undoubtedly have a lot on your plate. We’ve spoken with coworking space owners to understand what the right questions are to ask before expanding your operations. We’ve also worked with them to unpack the various elements of developing an effective location strategy.
One major component of expansion that may be on your radar at this point is funding. How do you find strategic capital that will help fuel the next chapter of your business and support the grow of your community?
This month we will be sharing a four-part series on funding, with each article highlighting a specific funding source, examples of coworking brands that have been successful in leveraging it, and thoughts on how you might be able to access that funding type yourself. The sources of funding to fuel the expansion of your coworking business could range from venture capital to a merger with another brand, or one of the many options in between.
To begin, let’s start by exploring crowdfunding as a source of capital for growing your coworking space.
Funding Source #1: Crowdfunding
This modern vehicle for fundraising popularized by platforms such as Kickstarter, has become a viable source of funding for companies across all industries – and coworking is no exception. Crowdfunding allows brands to (literally) capitalize on the strength of their network by creating a channel for a large number of people to invest small amounts of money in exchange for rewards. In many cases, brands will leverage crowdfunding to essentially pre-sell memberships in advance of launching a new coworking location.
Crowdfunding’s popularity has risen recently with more and more platforms becoming available – many targeting a specific niche. Their freemium structure and easy-to-use interface allows virtually anyone to start a crowdfunding campaign.
Who has leveraged this funding source?
Optix client, The Coven, is a Minneapolis-based collaborative community and coworking space for women and non-binary individuals – ran an incredibly successful crowdfunding campaign this year. They raised $315K from their passionate community on iFundWomen: a new platform that donates a portion of its profits to women-owned startups.
Another successful coworking crowdfunding campaign was led by CO+HOOTS, the award-winning Pheonix, Arizona brand. They took an incredibly structured approach, and stacked their team with social media experts and even people experienced leading crowdfunding campaigns. Their story is detailed here, along with other great tips.
How can I secure this type of funding?
Running a successful crowdfunding campaign isn’t a walk in the park. There is a lot of work involved and it requires you and your team to manage multiple moving pieces. In the case of The Coven, they did an incredible job of telling their story and helping potential backers connect to it through their iFundWomen campaign. They then bridged the gap between the digital and physical world, celebrating the people in their community and building awareness of their brand through several “witching hours” events. These gatherings allowed the founders to engage with several influential women in their community and enlist their help during the crowdfunding campaign.
Make sure you’re subscribed to our newsletter, as we will be sharing another funding source, venture capital, next week!