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Raising 600K from the tribe in 16 days

Written by Rob. You can join us on Escape the City here.  

How did this all start?

Escape the City started in late 2009 as an anonymous blog from the frustrating safety of our corporate jobs – at that stage it was just a project.

When our weekly newsletter began spreading like wildfire we quit our jobs and began building a community to help people escape the corporate world.

Decision time – let’s raise investment

Over two years on, at the beginning of 2012, we decided that we should seek investment to accelerate our growth and fulfill the potential behind this idea.

At first we went the traditional route – speaking to early stage VCs and Angel Investors in London. Then someone told us about equity crowdfunding…

The power of the tribe

The Escape the City bible is Seth Godin’s ‘Tribes’. We have always built this as a genuine community and movement first, and a business second.

A month ago we found ourselves in the position of having to decide between a VC investment deal and the prospect of being part owned by our own users.

Passing up on Venture Capital

It wasn’t an easy decision to make. We would be saying no to a £500,000 investment deal without knowing whether crowdfunding could even work.

VC comes with some fantastic benefits – a ready network and board members who really know what they are doing – it was hard to say no to.

Our motto? “Do Something Different!”

Ultimately we decided that the prospect of being invested in by our own members was perfectly aligned to our brand and too exciting to miss.

We are passionate about our mission and want to build a sustainable and profitable business around the idea – we want to do this with our members.

So how did it work?

On Thursday, May 24, we set up a private Crowdcube page here.

This involved uploading an Investment Proposal, Financial Summary and FAQs. We also made a pitch video:

We set our target to £500,000 (500,000 shares costing £1) in return for a 20 percent stake of the company.

We then sent the link to the Escape the City community – our existing +65,000 subscribers.

Incentives

Investors who put in at least £200 would get a personal thank you letter from the founders and a poster of our manifesto.

Anyone investing more than £1000 would also receive the limited edition Escape the City hoodie or t-shirt in a size or colour of their choice.

UK taxpayers would also benefit from income tax breaks under the Enterprise Investment Scheme.

Hopefully that wasn’t the only reason people were investing!

The response was astonishing… and extremely humbling…

  • Within the first three days we raised almost £200,000.
  • Within a week we raised 90% of our £500k target.
  • We hit £500,000 after 8 days. Over 386 invested.

Due to high demand, we extended the target to £600,000 – with extra funds to be used as additional marketing and contingency against revenue forecasts.

The end result?

We have ended up raising £600,000 in 16 days from 394 individual investors.

Our new shareholders have exactly the same rights as the founding team apart from a vote at AGMs.

We are planning on creating some really innovative ways of including our new investors in the process of continuing to build the business.

The future…

It is a tragedy that so many people spend so much of their time working in corporate jobs that don’t fulfill them.

We feel that this is an idea that really matters. Fortunately it seems that many of our website users agree and feel strongly enough about it to invest in the plan.

We are using this investment to build a forward-looking discovery network where people can set their aspirations in order to be matched with relevant opportunities, people and information.

Click here for more information about what we’re building.

Thank you…

A massive thank you to everyone who has supported us in getting this far.

We’ll keep you updated on progress via the blog and newsletter.

Keep an eye on www.escapethecity.org for an exciting new site!

All the best,

Rob, Dom, Mikey and the rest of the Escape the City team.

You can join us on Escape the City here

  • http://jonathanlea.com Jonathan Lea (@jonathanlea)

    Congratulations guys, this is a great story and I hope its just the start for more and more startups raising funds from their communities. Let me know if there’s a next round as I was just too slow this afternoon to invest before you reached the target!

  • Adele

    Thanks Jonathan – will do!

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