We recently sat down to chat with Bill Huston, Founder and President of Crowd-Max Publishing. Bill Huston is a founding board member of the Black Crowdfunding Coalition and was ranked by Inc. Magazine as one of the top 19 global experts on crowdfunding. Let’s hear from Bill about his thoughts on investment crowdfunding's potential and best practices.
For the people reading our blog -- who is Bill Huston? What does he do in the world of crowdfunding?
I blog, consult, and coach on crowdfunding. I’ve been thinking about crowdfunding since the early days of Kickstarter all the way to the present. I’ve managed crowdfunding campaigns for my clients and have helped companies raise hundreds of thousands of dollars from their community. I’m passionate about helping our economic development ecosystem realize the immense potential that crowdfunding can have on our communities, particularly for Black communities.
When you talk about crowdfunding, you like to start with the problem of traditional small business finance. Tell us about that.
Access to capital for small businesses is very difficult, and for businesses in the Black community, it is nearly impossible. In 2019, only 3% of SBA loans went to Black-owned businesses. Of the 5,400 SBA-backed loans that were given out by the four largest banks in the United States, 334 of them went to Black-owned businesses. That is just staggering. It’s not that I believe that crowdfunding works particularly well in our community, it’s that traditional finance, by the numbers, isn’t working at all in our community.
Why do you think investment crowdfunding is such a compelling solution?
For me, investment crowdfunding is the vehicle that allows people to build community wealth, especially in the Black community. One of the things I've heard in the Black community is that people stress the importance of buying Black. My philosophy is Invest Black. You don’t have to wait on the city, you don’t have to wait on officials or anybody else. You have to refine your project and bring it to the people who would care to fund it.
After having consulted for various crowdfunding campaigns, do you have any tips for small business owners considering launching their own campaigns?
Pre-campaign my advice is to research, research, and then do more research. There are many types of crowdfunding and many opportunities to connect with your customer base throughout your campaign. Having a game plan is critical.
After your campaign, make sure you use this new-found connection with your backers or investors to make them an active part of the business. Give them a chance to buy into a shared vision of the business. Ensure they have the opportunity to feel valued and included as an investor, customer, and brand ambassador. This is how you unlock, not just ROI from crowdfunding, but also what I call Return on Crowd -- those intangible benefits of bringing numerous people into your business’ mission.
What would you like to see more of in the investment crowdfunding industry?
I would like to see investment crowdfunding presented to small businesses throughout the technical assistance ecosystem, the SBDCs, Women’s Business Centers. This is the ground level for many people that want to be entrepreneurs. I encourage those organizations to send those entrepreneurs to me.
The ecosystem’s current focus seems on getting SBA loans, but I think the focus should be on helping these early-stage businesses use crowdfunding. This way they can get the capital they need, build a deeper relationship with their customer base, and turn their customers to brand ambassadors. That’s how crowdfunding continues its acceleration - by becoming an early part of every entrepreneur’s toolkit.
Check out our recent article about how you can invest directly in Black-owned businesses on Honeycomb here. Learn more about Crowd-Max here.