Crowdfunding: Start-ups can avoid banks and find money directly online
Clay Hebert was among the speakers at the Disruptors conference in Dublin
Irish firms no longer need to go to traditional gatekeepers like banks and venture capital funds for money but can find investment online.
Clay Hebert, the founder of Crowdfunding Hacks, also told a Disruptors conference in Dublin that firms can disrupt the work of major multinationals by speaking directly to customers.
He added that crowdfunding - raising small amounts of funding from a range of different sources - cuts the cost of failure to zero, and will make people try to find success again.
The businessman, who has helped more than 70 US firms raise $15m, said people are simply telling their stories and ideas online to an international audience instead of directly to bosses in Silicon Valley.
“Crowdfunding works when entrepreneur can go straight to the customers to raise money instead of going to the traditional gatekeepers,” he said.
“If you have an idea and you need money to get off the ground you no longer need to go through the gatekeeper. You can use these tools to market directly to the crowd, tell a story people who want to hear it, and sell your product before it even exists.
Mr Hebert admitted the concept sounds mad, but it has worked for the likes of travel firm Airbnb, now valued at $10bn, and Kittyo, which raised $270,000 to develop a CCTV and laser system so cat owners can play with their pets when out at work.
“The gatekeepers that we give so much power to to give us approval and permission to start our business don’t always have the perfect track record so people are going out on their own and starting this and every business is being disrupted,” he added.
Up to 200 firms attended the Silicon Valley Bank-sponsored event, which examined how the fastest growing firms in the world are deploying disruptive business techniques.
It focused on how traditional businesses can fight off the disruptors and the chaos they can cause.
Claire Lee, managing director of Silicon Valley Bank's corporate venture relationship group, said there was been an obvious positive shift in Ireland with the volume and quality of companies being produced at tipping point.
“There’s been a really good awakening of what entrepreneurship is and how people can get involved and the notion that you can start a business and grow a business out of Ireland and compete on the world stage,” she said.
“The best thing about what we are seeing is that people are really trying to fix things that are broken and solve difficult problems and that is the core for any founder.”
John O’Loughlin, who organised the conference, admitted while ‘disruptor’ was a new buzz word it was also a major issue for firms.
“In the world we live today in businesses are either being disrupted or are the disruptor, this is a problem for every industry,” he said.
He said with the world more connected with Smartphones firms are losing customers to businesses on the other side of the world.
“This is a big problem for business that have been around a long time,” he added.
“They think they can make stuff that people definitely want to buy but they won’t speak to their customers.”