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Expert: Add Consumer Rewards to Investment Crowdfunding Campaigns - s11 ep54

Capital Coach Karl Dakin Suggests that Entrepreneurs Include Customer-Focused Rewards Into Investment Crowdfunding Campaigns
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Transcript

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I’m not a financial advisor; nothing I write in Superpowers for Good should be considered investment advice. You should seek appropriate counsel before making investment decisions.

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Devin: What do you see as your superpower?

Karl: I sometimes say that I'm a puzzle solver. I have the ability to connect the dots.


Karl Dakin, the capital coach, helps small businesses raise capital–or even figure out how to get where they’re going without it. A big fan of regulated investment crowdfunding, he led an effort to pass enabling legislation in Colorado. Then, he helped to launch a crowdfunding portal to take advantage of the rules.

Investment crowdfunding has topped $2 billion cumulatively since it started but still represents a small part of the economy. When issuers and investors finish the courtship, the space could explode to multiples of this scale. Karl thinks he’s figured out how that could happen. Keep reading!

Seeing the vital role small businesses play in the local economy, he works with a wide range of companies.

I work with all kinds of companies and all kinds of industries. Some people think I'm confused because of the diversity of things I work with. 

Right now, I'm working on a dinosaur theme park. I'm working with an international lottery gaming company. I'm working with a company that's using topical CBD products to reduce pain and inflammation. I'm also helping with the local crowdfunding platform that is working to set up a farm-to-table group of supporters for any small business that's looking for microfinancing here within the state of Colorado.

He’s also helping an LGBTQ woman-owned manufacturer of vegan protein bars raise capital. Greens Gone Wild, led by Laura Harris, is raising capital via Crowd Sprout, a crowdfunding portal operating under the Colorado State exemption. The campaign is open only to Colorado investors.

I love this one. It hits so many notes for me. It’s a small business that is scalable. A woman leads it. A member of the LGBTQ community leads it. It is vegan. The layers of impact inspire me. This is a moment when I wish I lived in Colorado so I could invest.

Karl uses that offering as an example of what he suggests all consumer products companies should do with their campaigns. He explains the example:

With Greens Gone Wild, if you make a $100 investment, you're also going to get $50 of free product. They'll ship to your door product, just like if you had ordered it on their online website–$50 value. Then we also give a $100 discount on future purchases. So, you get 20% off the list price on buying these products.

The company also agrees to donate $25 per investor to a local nonprofit.

The investor gets $150 in rewards–plus the satisfaction of enabling $25 of charitable giving. The company presumably has a good margin on the products, so it doesn’t cost $50 to offer the $50 perk. The discounts are valuable to the consumer but still allow the company to make a narrow profit. The investors become long-term, repeat customers.

Then, the investor gets equity, too. For small investors, the rewards essentially remove the risk. The company gets repeat customers with a permanent connection–ownership–to the business. Problem solved!

That, Karl believes, is the key that will unlock crowdfunding success for small businesses.

He reached this conclusion using his superpower, I’ll call problem-solving.


AI Episode Summary

1. Devin introduces Karl Dakin, founder and CEO of Dakin Capital, who shares Devin's passion for investment crowdfunding.

2. Karl Dakin's company, Dakin Capital, is a consultancy firm that assists small businesses in obtaining the necessary capital for starting or growing their ventures.

3. Karl positions himself as a "capital coach," aiding businesses in designing capital campaigns, preparing to receive capital, and, in some cases, managing the entire campaign on behalf of the company.

4. Karl believes that small businesses are vital in bringing innovation to the market, contributing to global impact by improving the quality of life through their products and services.

5. He works with a diverse range of companies across different industries, such as a dinosaur theme park, an international lottery gaming company, a CBD product company, and a crowdfunding platform focused on microfinancing in Colorado.

6. One of Karl's current projects involves working with Greens Gone Wild, a company producing vegan protein food bars, to help them navigate crowdfunding to reach a broader base of investors.

7. Karl emphasizes targeting campaigns not just at wealthy individuals but also at customers and future patrons, integrating immediate value for investors through product discounts and immediate gratification.

8. For the Greens Gone Wild crowdfunding campaign, with a $100 investment, investors receive $50 of product, $100 of future purchase discounts, and a $25 product donation to a local charity, creating a package with a retail value of $275.

9. Karl believes in the potential of equity crowdfunding to allow non-wealthy individuals to invest and build wealth while supporting small business growth and innovation.

10. Karl encourages reaching out to him through LinkedIn, where he recently started a daily newsletter called Instant Funding, his website Dakin Capital, and other platforms like SuperCrowd, expressing his dedication to helping small businesses raise capital.

Share this post to start a discussion on X, LinkedIn or Facebook about adding rewards to investment crowdfunding campaigns.

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How to Develop Problem-Solving As a Superpower

“People would say is I see dots that no one else sees,” Karl says of his problem-solving superpower. Like solving a puzzle, he connects the dots between disparate data points to draw fresh conclusions to test new solutions.

Following the passage of the JOBS Act in 2012, Karl began working on implementing crowdfunding in Colorado. So, he’s been thinking about optimizing fundraising for a decade, along the way, helping companies do it. 

He loves that under the new rules, “investments are not limited to wealthy people.” But, he sees a need to think differently about bringing in small, novice investors. He framed the question as, “How do you get a non-wealthy person to be able to make an investment where they can benefit enough that it makes sense to them at their income level, where they're at in their life?”

His conclusion is to incorporate substantial consumer rewards, reflecting a genuine innovation in crowdfunding. He developed that strategy using his ability to solve problems.

Karl offers some tips for strengthening your ability to solve problems.

First, he suggests shaking off the fear by embracing the idea that much of what you try will fail–on your way to ultimate success. 

Second, he offers that it is important not to lock your focus on what has been done in the past. Start with a “blank canvas,” focusing on what you want to accomplish rather than how you’ll get there.

That kind of thinking, he says, allows you to conclude that you may be able to borrow or rent something rather than raise capital to buy it. You get where you’re going without some of the cost and stress.

By following Karl’s example and advice, you can strengthen your ability to solve problems. With practice, you could make it a superpower that enables you to do more good in the world.

Remember, however, that research into success suggests that building on your own superpowers is more important than creating new ones or overcoming weaknesses. You do you!


Guest Profile

Karl Dakin (he/him):

Founder / Owner, Dakin Capital LLC

About Dakin Capital LLC: A specialty consulting company that provides coaching to small businesses in the design, staging and conduct of capital campaigns.

Website: www.dakincapital.com

X/Twitter Handle: @KarlDakin

Biographical Information: Mr. Dakin is a professional entrepreneur, a leader of business startup projects, consultant on small business capital formation and an educator on entrepreneurship.

He owns and operates Dakin Capital LLC, where he provides services as a capital coach to small businesses leveling up or just getting started. He serves as a business leader in several small businesses.

Mr. Dakin is currently an Adjunct Faculty with the University of Denver and a member of a faculty team that teaches the BioEntrepreneurship program at University of Colorado, Anschutz Campus.

He shares his knowledge of raising capital through his Instant Funding newsletter, media posts and guest appearances.

Mr. Dakin is a member of the Economic Development Council of Colorado, National Coalition for Community Capital, SuperCrowd, and the Society of Physician Entrepreneurs.

He is a licensed attorney in the State of Colorado with 45 years of experience in commercializing innovation. He holds a Juris Doctor degree from the Washburn University School of Law and a Bachelor of Business Administration from Washburn University School of Business in Topeka, Kansas.

X/Twitter Handle: @KarlDakin

Personal Facebook Profile: fb.com/karl.dakin

Linkedin: linkedin.com/in/karldakin/


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