Namibian-born Arno Smit has made it his business to help realise the dreams of others. He’s well spoken, intelligent, driven, handsome and, while my mother would call him “a very nice boy”, we at YLC would say he’s downright extraordinary.
Arno Smit of FundedByMe. Photo: Daniel Diaz
Crowdfunding is not a novel idea. In fact, when the Statue of Liberty was being shipped from France in the 1800’s, its committee ran out of funds for her pedestal. Luckily for Lady Liberty, Joseph Pulitzer (yes, him) stepped in and started a newspaper campaign, encouraging the citizens of New York to donate whatever little they could. Over 160 000 donors participated, from children and street cleaners to businessmen and politicians, raising over $100 000 in just five months, enough to finally furnish the statue with her iconic pedestal.
This, essentially, is one of the first recorded examples of successful crowdfunding, a process whereby a large pool of ordinary people each donate a small amount of money in order to fund a project, business or campaign. And it’s also what’s at the core of Sweden’s first ever crowdfunding portal, FundedByMe.
On Funding Funded
Co-owned by Arno Smit and Daniel Daboczy, FundedByMe is the offspring of ambition and frustration. Having followed his Swedish wife to the land of cinnamon buns, Smit found himself working with Daboczy at web agency, Dabber.
The duo then branched off together and came up with an admirable project, “Ideas for Change”, but attempts at gaining funding for it via Kickstarter, the world’s largest crowdfunding platform, were thwarted due to the project not being based in the US. They decided to see this underrepresentation in the crowdfunding market not as a hindrance, but as an opportunity to do something about it.
They used paid incentives to fund the launch of their business, offering everything from 100 sek hugs to 5000 sek speaking gigs.
In just 60 days, they had raised 104 670 sek, just enough to jumpstart their idea. Now, a little over two years later, FundedByMe can be found in Sweden, Denmark, Norway, Finland and Spain, having already funded around 760 reward-based projects.
On the workings of Funded
Smit explains that crowdfunding has developed into two things: reward-based and equity crowdfunding. Reward-based crowdfunding is the initial funding of a campaign through many investors investing small amounts of money for correspondingly small rewards. “It’s used when you’re looking to launch a product on the market and you need customer validation. You want to see whether someone is looking to pre-purchase or order it eventually.”
So, essentially, before deciding whether to invest your life’s savings into your second-hand sock business, you can test the market to see whether it’s a viable idea.
Equity-based crowdfunding, on the other hand, is mostly for those who are already existing business-owners looking to expand their network, bring in more investors or break into new markets. In these cases, the investors would be rewarded with a share of the business.
On being Flippin’ Awesome
One shining example of the company’s success is that of Stockholm’s devastatingly cool burger joint, Flippin’ Burgers, voted by CNN as the 5th best American restaurant in Europe.
In his previous life Flippin’s owner, Jon Widegren, was just a regular consultant who had the hots for hamburgers when he decided that he was going to quit his job and pursue his passion for meaty buns. After being rejected by banks for a loan to start up a burger joint, he turned to FundedByMe, who gave him the platform he needed to launch his seemingly nutty idea. In just 14 days, Widegren had accrued over 36 000 sek by setting up a reward system of buy one hamburger and get one free when the restaurant opens. “So you had all these people buying it just because it was cool and random.”
“People would tweet: ‘I just bought a hamburger that doesn’t exist!’ It became viral.”
Widegren took this overwhelming response from the market to the bank, which promptly furnished him with a high-risk loan. A year and a half later, business is booming at Flippin’ Burgers. You can tell by the seemingly constant, hour-long queue of hungry hipsters waiting to be seated.
On how to get funded
The recipe for Widegren’s success isn’t just in his secret sauce; it took a lot of hard work on his part. “I always say to people that input equals output, so the more work they put in, the more exposure we’ll give them.” Says Smit.
And if you’re willing to put in the effort and you have a great idea, there’s really no reason not to apply. It’s easy to do and it’s entirely online. All you have to do is visit the website, fill out a few forms and create a presentation (preferably in English). “From there, you have the ability to share it via social media, engage people at an early stage and get them interested, involved and invested.” Says Smit.
On expat integration
And though the projects are primarily in English, Smit very much believes that learning Swedish is an important part of integration into the Swedish culture. When he first arrived, he dutifully attended SFI classes every day for three months and read as much as he could.
“I believe you must immerse yourself in the language to learn it. You have to understand the cultural barriers that are in front of you in order to break through them and language is a good way to do so.”
His language skills have also helped him within his company as he reveals that a lot of their business and board meetings are conducted in Swedish. In fact, he insists that even if you are living in Sweden and applying for a job in a company where English is the lingua franca, it’s still important to be able to converse in Swedish and it’s even more important if you’re attempting to set up a business here.
On starting a business in Sweden
Smit is only too familiar with the tribulations of being an entrepreneur in Sweden, “Starting a business takes a lot of hard work; a lot of sweat and a lot of tears.” But he urges entrepreneurs not to become frustrated and give up.
“Whether you’re looking for your first job or starting your first company here, just remember that things take a lot longer than you expect.”
But in order to bolster your chance of success, Smit recommends that one “attend meet ups, network, find a mentor and build a great team, because a product is nothing without a great team.”
He says this as he glances in the direction of his own team, casually dressed and happily slurping their coffee while they sit side-by-side at their desks, working toward turning more dreams into real, successful businesses.
*For more information on FundedByMe and how to submit your ideas to them, visit their website or follow them on Facebook, Twitter, Linkedin and Google plus
Kirsten Smart
Kirsten blindly followed her husband from South Africa to the land of snow and snus in 2011 and proceeded to procreate. When she isn’t discovering the 101st use of the humble wet wipe, she can be found writing adjective-laden articles for YLC.
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