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Ahead of the crowd

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Ahead of the crowd

PledgeMe founder Anna Guenther was drawn to crowdfunding while studying at Otago. The company has become an innovator in this new and crowded market, helping raise more than $23 million for 1,200 campaigns.

Turning up to work in a panda suit might be career-limiting for some CEOs, but PledgeMe head and founder Anna Guenther knows otherwise. “Why should business and fun be mutually exclusive?” she asks.

In fact, mentioning her Wellington office’s “onesie Wednesday” in a 2014 blog post on entrepreneurship attracted national media interest in both her management style and business.

Speaking to Otago Master of Entrepreneurship students in early 2018 about ways companies can “break through”, Guenther said the “onesie” example underscores the value of the unconventional. The story also hinted at the 33-year-old’s ethos: business should be transparent, fun, open and social, she says, but while it is okay to have senior staff dressed as matching dinosaurs, you have to be credible enough to back up the hype with good planning, and ethical and sustainable best practice.

Guenther was first drawn to crowdfunding while completing her 2010 Otago Master of Entrepreneurship (MEntr). Crowdfunding relies on businesses approaching a “crowd” of friends, family, customers or fans for support, typically using social media as the main way of attracting interest.

“Crowdfunding really appealed because of the way it democratises capital and challenges the gatekeeper model to make funding more community-focused and collaborative. Projects that might not be funded through normal channels have a shot.”

Guenther was working as a grants administrator while studying and says that, although she enjoyed the job, she was not always convinced “the right decisions were being made”.

“I remember reading that only 21 per cent of arts funding applications in New Zealand were successful, which didn’t seem fair because 88 per cent of people said they believed arts were an intrinsic part of our national identity.”

Soon after graduating she put theory into practice and founded New Zealand’s first alternative funding service provider.

The company’s history since 2011 shows New Zealanders have a healthy appetite for unconventional capital raising: more than 90,000 pledgers have helped raise over $23 million for 1,200 campaigns. Innovation has been key to surviving in the increasingly crowded crowdfunding market. While PledgeMe was a leader, the Financial Markets Authority has had 14 applications for equity crowdfunding licences since 2014 and currently has eight licence holders.

In recent years PledgeMe has augmented its services to include equity platforms (in 2014) so investors could retain an interest in a company or venture, and peer-to-peer lending services in 2016.

Guenther says she is often staggered by the range of campaigns funded and their potential to transform businesses.

“One guy raised money to build a bionic hand for a friend. [Dunedin-based] Powerhouse Wind raised capital for its single-bladed turbine project.

“Many of the campaigns, like the Christchurch arts projects and Dunedin’s Ocho chocolate, have been truly inspiring.”

The Ocho campaign is also a good example of what happens when crowdfunding stars align. In November 2017, in response to the announcement that a parent company would scale back operations and eventually close Dunedin’s Cadbury chocolate factory, the Otago Chocolate Company launched their “Own The Factory” campaign.

Less than two days later 3,200 people had bought shares in the company and the campaign’s final target of $2 million was hit, crashing PledgeMe’s website in the process.

So why, other than the offer of discounted chocolate, did the campaign resonate?

Guenther says it literally capitalised on public sentiment because of timing and messaging. Their value proposition outlined a commitment to a “broad base of community ownership, paying fair wages to workers, keeping worker-CEO pay ratios within an agreed multiple, and a strong commitment to regional development through profitable businesses”.

There is also much to be learnt from unsuccessful campaigns and, while her job title reads CEO and “chief bubble blower”, she jokes that the role often involves bubble bursting.

“Communicating to activate customer groups can be the most difficult part of the process for our client businesses. A common complaint from clients whose campaigns didn’t hit their target is the expectation that there would be a crowd waiting for them. We always say the companies that do well either have good customers, or people like their idea. Our service isn’t necessarily for start-ups or companies who need help; it works best for established companies that want to go to the next level.”

Guenther champions communication skills and says the abilities she gained pre-MEntr studying English, with a minor in German, at Otago have been invaluable “in business, and in life”.

In recent years these skills have been employed to campaign for equality, rather than equity.

“I was asked to speak at a conference on the future of feminism and suggested my boyfriend should speak because he was more of a feminist than I was. They asked me to speak anyway and the process of discussing the bigger dimensions of job inequality, domestic abuse and violence with my crowd really added to my understanding of how complex these issues were.”

The ongoing conversation also led to some uncomfortable personal questions about whether her own “unconscious bias” had influenced the make-up of her company’s board and she now requires PledgeMe to “walk the walk” in terms of representation and the campaigns it facilitates.

“In a sense it’s sad to see the number of women funded through PledgeMe is far higher than through traditional venture capital systems, in which eight per cent of companies have female founders, with half a per cent being CEOs. With crowdfunding models we see about 50 per cent female founders, with 40 per cent female CEOs – but still, the amount of money they raise is less than that raised by companies at the same stage of development that are led by men and there’s disparity in the way their companies are valued.”

In 2015, Guenther took online innovation and business entity Idealog to task over an article on how few women were represented on the front cover of their 10th anniversary magazine. With GoodSense managing director Kath Dewar, she invited her crowd to contribute to a list of inspiring New Zealand business women that the media could interview. Nine hours after the list launched 350 names had been amassed and, by the time the spat ended, more than 800 names had been added and Idealog had revised its position.

She has also been co-instigator for several Women Who Get Shit Done Unconference events, which provide a forum for women of different ages, ethnic groups and backgrounds to meet and discuss defining issues.

Last year PledgeMe “realised equity-based crowdfunding isn’t necessarily equitable” and changed its model.

“While more women are getting funded, it’s still predominantly people who are white and in networks with capital that get the money, so I really wanted to address what business can do about inequality – not in relation to women – and that’s why we are exploring a whānau lending platform.

“I write or speak about diversity and inclusion pretty regularly and enjoy returning to Otago or speaking to students, businesses or public groups because, ultimately, I believe patriarchy is bad for everyone.”

Sharing ideas and speaking up has seen Guenther nominated for various national awards, including the 2017 NEXT Woman of the Year Awards and the Innovation and Science category of the 2016 New Zealand Women of Influence awards. She believes the interest garnered by this recognition is useful as it puts inequality or the question of what constitutes ethical business practice squarely in the spotlight.

In early 2018 Guenther relocated to Brisbane to take PledgeMe trans-Tasman. In Australia she will also work with the Queensland Government on its start-up relocation programme Hot DesQ, which provides mentoring for local businesses.

While Australia’s many new rules are “a challenge” – and it is too hot for panda suits – Guenther is enthusiastic about her future crowdfunding and social equity work.

In a TEDx talk in 2012 she enthused about crowdfunding’s socially transformative potential and, while years of experience in the sector have helped temper her observations with reality, she remains convinced of the need to constantly renegotiate the relationship between the unconventional and the traditional.

“I’m very excited about our plans for campaigns with indigenous communities and evolving what we do in the social enterprise space. I still think crowdfunding is going to be a force in changing who funds and who gets funding, and I am still convinced of its power in democratising and humanising financial markets.”