Interview
FOLLOW THE INVESTORS Crowdfunding has revolutionised the alternative investment sector
Heath Lansbury
Jason Kluver
and its simplicity is quite seductive. Use the power of the crowd to fund great new businesses and projects. Although it may be fun to invest this way, do you really know what you are investing in? Rather than follow the crowd, isn’t it wiser to follow experienced investors? Shadow Foundr provides an investment platform that combines an active private investor network with a crowdfunding element. Two of the founders of the business, Jason Kluver and Heath Lansbury, explain to Ian Trevett how the model works.
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he Shadow Foundr website looks, to all intents and purposes, like a typical crowdfunding platform. You are invited to click on an image of an interesting, growing business, under which is a running total of how much has been invested, plus a percentage figure of how close the business is to reaching its target investment. But never suggest to Jason Kluver or Heath Lansbury that they have a crowdfunding company. “We’re an investment platform,” corrects Jason, “and we have an offline network of almost 600 seasoned investors. We try and embrace crowdfunding and educate the crowd to invest smartly and wisely into these companies because a lot of the time we’re seeing the crowd just following the crowd, a bit like lemmings, and they’re not really understanding the basic fundamentals of investing into these start-ups.” Heath adds, “We didn’t want to become a 100% crowdfunding platform because sometimes you can get too automated and in this industry you need to have an offline and an online presence. “People don’t want to be putting £10,000 into a company without speaking to anyone. From our previous experience, we learnt that having an offline private investor network adds real value. Our strapline is: “Don’t just follow the crowd, follow the lead of experienced investors”. “After we conduct our due diligence on an investment opportunity, we’ll put it to the private investor network first,” says Jason. “If they’re happy with it they’ll invest into it. Once we reach at least 30% of the investment target, we’ll put it on the platform for the
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crowd to follow, although in almost all cases the investor network will take far more than 30%.”
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Our strapline is: “Don’t just follow the crowd, follow the lead of experienced investors”
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As the team at Shadow Foundr are seeking initial investment from experienced investors, they have to do their homework and due diligence. In fact, of all the businesses they look at, they typically only take on about 7%. With such a high bar, it is interesting to ask what Jason and Heath look for in a start-up or
growing business. Jason replies, “We’re not looking at business at too early a stage. Probably the first and foremost thing that we look for is the quality of the team involved. There are so many young people out there with great ideas for apps and gadgets but they don’t have any commercial experience to carry them through. We look for scalable opportunities. “Generally they’re in the tech and renewable sectors. We’re not looking for a coffee shop chain or craft brewery, although some of those have done very well. We’re looking for opportunities that can be scaled globally or that are truly disruptive.” “You have a gut feeling,” says Heath. “Over time our radar has become very finely tuned and we can look at something and within five minutes we’ll know it’s just not for us. We know what our investors like. Renewable energies are attractive because