Claire Bradford: What is crowdfunding?

When Nicky Chisholm and Sara Guiel, of The Mumpreneurs Networking Club (MNC), decided to use the relatively new concept of crowdfunding to combine presenting their business to a wider audience with raising capital for their next round of growth, they quickly found their biggest job was explaining what crowdfunding is and what it is not. I spoke to them about their experiences...

So, what IS crowdfunding? It is a way of funding a project by raising small amounts of money from a large number of people, typically by offering a menu of products, services and events to investors.

What attracted you to crowdfunding? Recent figures show that mumpreneurs add about £7.4 billion a year to the economy. So the time seemed right for us to take on the challenge of raising £50,000 in 45 days to spread our network. MNC has a big social media reach and we realised this could be used to our advantage in a time-limited campaign. We also thought it would be fun and a way for our members and managers to raise their business profiles, as we offer some unique experiences to them in exchange for contributing to our campaign.

What sort of experiences are you offering? Our perks range from social media shout-outs, through lunch with stand-up comedienne Viv Groskop or a Sex in the City brunch, to sponsorship of our innovative phone app.

What has been the biggest challenge for you in the process? Educating people about the concept and then explaining why we’re doing it and what it means for them. We know what our aim is but conveying this across our organisation has been a herculean task! Our mission has not had the clarity we thought so we are reacting and tweaking it continually.

• Share your thoughts about crowdfunding at www.facebook.com/womaninbusiness or tweet me @coachbythecoast