It’s now one month since we announced Trampoline’s crowdfunding project. As Techcrunch reported we rapidly received commitments for a third of a million pounds. We’re now close to initial completion at half a million pounds with a solid pipeline of investors moving towards the second stage. At this point certain patterns are evident which may be of interest to anyone planning a crowdfunding initiative.

First, the early commitments we received mostly came from people who already had some connection with Trampoline. This included customers, friends of shareholders and friends of analysts who’d written about us. These people were only one or two or steps away in Trampoline’s network so there were direct personal experiences and trust relationships. This provided the foundation for them to commit quickly and take advantage of the “early bird” share price.

Second, whilst we were planning the crowdfunding process I spoke to several established technology entrepreneurs for advice. As well as giving me their feedback and suggestions these people introduced me to other figures in the technology and entrepreneurial world, who in turn made further introductions. This cascade process, which was unanticipated, has proven to be immensely valuable. Not only am I learning from people who have created hugely successful businesses, several of them also want to invest or play a strategic role in Trampoline’s development. Having even one of these people involved in the company could be transformational.

Third, since we launched the initiative there’s been a steady stream of high net worth individuals certifying on the website and approaching us to find out more. I would estimate that something like two thirds of these people are professional angel investors, who have invested in multiple growth businesses and know exactly what they’re looking for. The remaining third are wealthy individuals who don’t have a long track-record of venture investing but they heard about what Trampoline was doing and were intrigued about the opportunity. These people, both the experienced angels and the first-time investors, have no previous connection to Trampoline either directly or through their network. Consequently there is a different pace to discussion as trust is established and information gathered. Access to due diligence materials is particularly important for these investors.

Fourth, and somewhat to my surprise, we’ve been approached by several venture capital funds who are interested in participating in the crowdfunding offer. I expected the model would be unattractive to VCs because we’re offering ordinary shares without the preference rights VCs usually demand. However I suppose it’s a good way for a fund to make a small bet alongside others, with minimal management overhead. But it remains to be seen whether  these funds will actually come through and invest.

Those are my observations to date. It’s been wonderful to see so many people discussing what we’re doing. Right now I suspect opinion is split with a lot of people still sceptical that crowdfunding can work for a business like Trampoline. On current evidence I’m optimistic we’re going to dispel that scepticism.

Today we’ve announced that Trampoline is financing the next stage of its growth through an innovative process called crowdfunding instead of traditional venture capital. We’re raising £1 million from up to 100 private investors with a minimum stake of £10,000. In the last few years crowdfunding has established itself as an alternative model in the music and film industry, enabling artists to finance production and releases without signing to a label or studio. This is the first time the technique has been used by a technology venture of Trampoline’s scale.

There are several reasons Trampoline decided to take this step. First and foremost, the financial crisis has severely restricted the availability of conventional finance for businesses at Trampoline’s stage of growth. To maintain the company’s momentum we needed to find a different route. Secondly, we think entrepreneurs should have more choices about how they finance their businesses. We wanted to prove that the internet makes new alternatives available which can function at a reasonably large scale. Thirdly, innovation is a core part of Trampoline’s DNA. We’re always looking for new solutions that are more efficient than the conventional ways of doing things. We’ve spent the last month working with our advisors and shareholders designing the process and ensuring it fits with FSA (Financial Services Authority) regulations. Today we opened the doors.

Some of the greatest changes the internet has brought have involved mobilising large communities of people in new ways, whether that’s Wikipedia, Facebook or Ebay. Crowdfunding is the equivalent for the corporate finance world. Crowdfunding isn’t going to replace venture capital, private equity, debt finance or stock-markets. These traditional models will continue to provide the most efficient solution for certain financing needs. But I think crowdfunding could establish itself as the best solution for many early and mid-stage ventures. In many ways it’s an evolution of “friends and family” and “angel” models, just operating with greater transparency and on a larger scale. Crowdfunding grows organically from peer to peer networks of trust, experience and influence that can help a venture to secure the resources it requires and achieve success.

I hope the the initiative Trampoline’s announced today will spark a discussion in the start-up and venture finance worlds. I’d love to hear what you think. We invite you to add your comments on our discussion page.