Cahoonas — The Herald
When Edinburgh-based designer Simon Phillips, 41, tried to get banks and grants to back his idea for a new "ergonomic" design of men's underwear, he found no-one could understand why there would be any demand for it.
But his project for British-manufactured male underwear attracted nearly 100 crowdsourcing backers in 30 days and raised more than £5000, which will enable him to put the design into production.
Phillips said: "We started on this mission in 2010 and it was a case of looking at why no-one had changed male underpants since 1920.
"Female underwear has come on leaps and bounds in the 21st century. Michelle Mone realised women have got lots and lots of different shapes going on and she created her brand. I thought it was about time someone did something like that for gents."
Phillips said he did not expect such a positive response to his Cahoonas underwear project.
"We sold £5000 worth of pre-orders in 30 days. I am still in shock, it was totally amazing," he said.
"You are basically opening yourself up to people and straight away you get the impetus of whether is it a good idea or is it not a good idea."
Phillips added: "It says to the banks, 'This is the 21st century and people are using the internet. We can back the companies that we think are good enough and we can put our money where our mouths are.'
"British industry and industry in general can only benefit from this – if the banks don't want to lend money, we don't need banks any more."
RAISED: £5182 achieved May 3
Rewards offered: Thank you tweet for £1 to tailor-made underwear for £5000 or more.
HOW TO DO IT
SO you have a great idea but no money to make it happen – can turning to the internet really provide the answer?
Rewards-based websites such as Kickstarter, Indiegogo and BloomVC can work well for specific projects, while a business which is already up and running could opt for loan-based crowdfunding through sites such as Zopa and Funding Circle, instead of going to a bank. There is also equity-based crowdfunding, where investors buy a small share in a business in the hope of it seeing it grow in value, with Crowdcube and Seedrs some of the biggest names in the UK for this type.
Websites may charge for listing the project or a fee when a project is successful. Most work on an "all or nothing" basis, where the project only receives funding if the target is reached within a certain time.
Julia Groves, chairwoman of the UK Crowdfunding Association, said: "It is not an exact science, but having something like 20% of the funds you are trying to raise effectively pledged in advance is a really good way to go to market."
Groves said the average amount raised was £150,000 and the average investment between £2000 and £2500.
She added: "If you don't raise your money, you have to think, was that a bad pitch or was it just a bad project? It is like a little test bed of customers.
"You raise your money at the same time as raising awareness of what you are doing. And if it is successful, you have this band of advocates who are massively keen for your project to succeed. "
The Financial Conduct Authority cautions that investors should understand the business or project and not invest money they are not prepared to lose, as most start-up businesses fail.