[ 23:33 wednesday 19 august – haggerston road, london ]

when trampoline raised three million pounds in 2007 the business plan anticipated raising further investment at the start of 2009. i duly started speaking to venture capital firms this spring. trampoline is widely respected and the field of social analytics is gaining attention. but the financial crisis has led firms to cut back on investing, allocate more money to their existing portfolios and focus new investment on ventures that are either tiny or close to profitability. businesses like trampoline which have completed product development but are just starting commercialisation are finding it impossible to raise finance from conventional sources. one fund after another turned us away.

the realisation that we weren’t going to be able to raise more capital was terrifying. i’m responsible for a dozen people’s livelihoods and the trust that my friends placed in me when they invested at the beginning. it was particularly galling to think that six years’s effort would be thrown away just as we were on the cusp of seeing the payoff. the orthodox choices in this situation would be to sack most of the workforce or try to sell the business for anything we could get. i felt trapped at the centre of a dimishing set of choices.

then one evening, after dinner with my friend eric, i had a wild idea. i’d heard of a technique called “crowdfunding” where the internet is used to raise small sums (generally below a hundred thousand pounds) from thousands of people. it’s been used in the film and music industry, but never to finance a technology business. why shouldn’t trampoline be the first to do it?

the next morning i scribbled down a one-page outline describing my idea and sent it round the management team. i half expected people to tell me i was insane. but they didn’t. several days later, after thinking through the details, we assembled the whole company and told them we were setting out to raise one million pounds from up to a hundred investors with a minimum stake of ten thousand pounds.

i spent most of july with lawyers working out how to could operate the crowdfunding process within the regulations policed by britain’s financial services authority. a breach could result in criminal charges being brought against me and craig as directors so there was a strong incentive to get it right.

finally on the twenty-ninth of july we unveiled the scheme to the world and it immediately started attracting attention. the financial times wrote a feature when we made the announcement and quoted me in another article a few days later. the sunday telegraph published a feature examining the implications of what we were doing. last week the venture capital and start-up blog techcrunch posted a story about us which brought several thousand people to our website. most importantly we started to be contacted by people wanting to find out more about the company with a view to investing.

like any innovation it’s impossible to predict how the process will unfold. but we already have commitments for a third of the sum we’re seeking to raise. i’m hopeful we will be successful.

all the details of trampoline’s crowdfunding initiative are on the web at http://crowdfunding.trampolinesystems.com.

: c :