Editor’s Note: Each week I put a crowdfunding industry thought leader in the spotlight and ask them ten questions to inspire and educate. This week Adam Pressman, the founder of Crowdfund Roundup tells his unique story.
I’m a singer, a sailor, a serial entrepreneur and, oh yeah, I help people become millionaires. My first career was as a security professional, I kept bad things from happening to people, or their businesses. I learned a lot about businesses keeping bad guys from exploiting the weaknesses in those businesses. That was my entre to management consulting and coaching, where I combined what I learned identifying weakness and strengths and the leadership lessons I encountered leading racing sailboats to victory. Now, with experience to make wisdom out of knowledge I have the credibility to challenge the orthodoxy in how people find, fund and perform the great work that changes lives, maybe even the world. I’ve had the chance to work with people who’ve literally changed the world for billions of people. I can’t wait to do it again.
Q: How did you get into crowdfunding and what was it that attracted you to this industry?
I noticed that my clients no longer had the access to funding for the transitions or creation of their businesses for which they sought my help. Curious, I researched and discovered the many reasons why the traditional capital formation process was failing. During that research I rediscovered crowdfunding. I say rediscovered because I’d leveraged patronage before as I gathered a crowd to preorder the album my band in college sought to record. I remember walking into a record label with my list of 2000 fans who committed to buying our record before it was pressed in 1982. Crowdfunding…80’s style.
Q: What’s the most common question people ask you about your job and how do you respond?
It’s either of these two:
1. Who let you in here?
2. Why is there a ship on your shirt? (The brand of my favorite company, LeaderShipShape).
No, seriously, If asked about my job (I don’t have a job, I build value every day but I can’t call it work. I enjoy it too much) I say, “I help one out of 24 people achieve more, work less and celebrate often.” That ALWAYS leads to a discussion and I’m not sure how much ink you’ll use on me. My answers are never as interesting as my questions or the answers to them I hear from others.
Q: Did you have a mentor or is there someone who inspires you as a leader? How did/do they impact on your career and life?
I can’t point to just one mentor. (I think if you have only one mentor you’re a stalker.) Winston Churchill, Joshua Slocum, my mother (everyone has their mother as a mentor whether they say so or not…but mine was also a two time Olympian) have all provided me by their life’s examples the best answers to the hardest of life’s questions. Writers that inspire me include Shakespeare and Emerson who between the two left nothing about the human condition unsaid (or ever better said). Inspiration is one thing but execution is the rest and that leads me to credit my fantastic network of fellow business builders, my team atCrowdfund Roundup and I learn a lot from my clients (who are paying to learn from me).
Q: What is the biggest challenge facing crowdfunding as an industry today and what solutions would you suggest?
My mission is to forever remove the disclaimer/admonition/weasel words that appear in every mention of startup investing “Don’t invest money you can’t afford to lose”. That’s silly, linguistically. If you can afford to lose it, by definition, it’s not money as it has no value. There are people out there double-speaking their advocacy for crowdfunding and the supposed democratization of capital formation while simultaneously repeating those senseless words above.
It doesn’t have to be this way. Complicated aspects of life, like healthcare and capital formation, require us to learn and engage critical thinking and take steps to prevent catastrophe. There’s no substitute for that. But when we’re wrong, we have insurance in healthcare. Most of the industry doesn’t know we can provide that assurance in startup investing. You need not lose your money investing in a failed startup. If you can’t make that promise, you’ll get no investment from the larger crowd. Without that larger crowd, much of the oft-touted promise of crowdfunding won’t happen.
Q: What advice would you give someone trying to get into crowdfunding right now?
Well it depends upon what you mean by “getting into” crowdfunding. So I’ll address what I see are three paths.
For the fundraiser or entrepreneur, crowdfunding allows you to not do the things you hate:
1. Write business plans for people who don’t care about your business.
2. Sell of equity and/or burden yourself in debt with people who don’t care about your mission.
3. Serve two masters, those you wish to serve, and those to whom you owe money. And it allows you to do the one thing that all entrepreneurs love to do, get people, specifically 150 people, excited about your idea, offer you ways to execute it, better it, sustain it and, when you ask them, fund it to whatever extent they can. You’ll pull your best ideas, your best teammates and your best prospects for success from this “tribe” of 150. The mistake I see fundraisers make is trying to impress and persuade people they don’t know to give them money.
For the investor:
1. You can be a partner in the products and service you love and bring wealth and opportunity to your community.
2. You need not fear failure. Failure is the step to success that wasn’t in the plan. You need to invest in opportunities that won’t kill your investment budget and plans because of failure.
3. You can empower others and yourself by becoming a prosumer. Make something that leaves the community better than you found it, even if it’s only an investment in someone else who does the work.
Then there are the service opportunities in Crowdfunding. I’m reminded of the anecdote about the California Gold Rush (not far from where you now call home, Josef). Many came to prospect, most went home broke. A few went home rich. The folks that all went home rich were the people who sold the gold pans, shovels and blue jeans. The magic behind Crowdfunding is due to a really awful word, “disintermediation” (removing the middle men).
The change in capital formation is from eliminating the obstructive and margin-fattening middlemen and replacing them with high volume, low margin, lean and expert middlemen. They provide the services to increase viability and sustainability in great ideas and to identify great opportunities for investors who demand the kind of yield only possible in starting and nurturing small businesses.
Q: What resources and events (blogs, books, conferences, podcasts, videos, etc) would you recommend to someone looking to become a crowdfunding expert and why?
I like and we use what Ruth Hedges is doing at CrowdU andCrowdfundingRoadmap.com as a great overview of what works. Sam Guzik and Tony Zeoli are two attorneys that are constantly getting the right info to the industry and the right messages to legislators and I follow their blogs. There’s so much out there including what I learn from Crowdfunding.biz each week. At the end of the day though it doesn’t matter what you know, it matters what you do with what you know and who helps you do it. We put Crowdfund Rounduptogether to coordinate nationally the meetings we have on what works and doesn’t in crowdfunding so people seeking funds and those that love to fund them can come together, ask people familiar with the local market realities and crowdfunding globally to help and we used this wealth of wisdom from our attendees to crowdsource our products like the Crowdfund Guarantee.
Q: What are you doing to make sure you continue to grow and develop as an industry leader?
First, I listen to my coach. I listen to my customers and people who will never be my customers. I listen without listening FOR anything. That way, I can learn everything. I listen a lot because I don’t know a lot. Three years ago my knowledge of capital formation was how to spell it correctly. I’m a little disturbed at how much I’ve been able to learn and that I’m not infrequently regarded as an expert in capital formation.
Q: Can you tell us a little bit about how social networking and Web 2.0 have affected your organization or you personally?
Wow, LinkedIn! I can’t believe what I can learn from the more than a thousand connections I have. Facebook and Twitter have become alternative news sources of note in alternative finances. Social technologies empower social or what we call the crowd creative process. We believe that fundraising, sourcing and even distribution will ultimately be part of this process. As someone who promoted my band thirty years ago with newspaper ads, bulletin boards and mailing lists, the accessibility and low expense of marketing via social tech amazes me and I now use Facebook for a fraction of what I spent on other methods.
Q: What do you think the crowdfunding space will look like five years from now?
First of all I think we’ll lose the word. I believe most funding in the $100k to $3M part of the capital formation spectrum will be done this way and we’ll just call it funding. The odd thing will be when someone gets a bank loan. I imagine thousands of portals linking a particular community of investors with a community of entrepreneurs and business builders all with a consistent vision of success. I believe larger traditional sources of capital are seeking and will find ways to engage in the incredible success metrics of crowdfunding in startups.
Q: What ultimate goal are you working towards?
I want to see a Crowdfund Roundup Meetup in every community desiring change (we have five so far across the nation), where people who both know the local market and the formula for success in crowdfunding can meet those who care about their community and want to bring in wealth and opportunity not in the form of short term handouts or public largesse but by building what they can be proud of and pass on.
The success of this, combined with new thinking and solving the issues of risk and failure in startups, will draw in the larger body of potential investors. There’s over $300M in money out there not invested in communities, most of it in the hands of people over 50 years of age. These are people that can’t afford to lose their money and don’t have time to wait out the compounding on today’s single digit fixed asset yields. With a way of enabling the failures that lead to success without losing investor’s principals, the nature of capital formation envisioned by the writers and signers of the JOBS act can actually come true.