What a ride these past couple of weeks have been! We have spoken with so many of you over the phone and then watched as over a hundred Vampr users have gone on to join us as business partners and become investors in the company.
One of the questions that many of you are interested in understanding is why we didn’t go to Venture Capitalists (VCs) for our funding? Why choose crowdfunding?
Imagine you are starting a business where a large community of engaged users is the key to success – for instance, Vampr. You initially raise start-up money from family, friends and industry leaders (“angels”). Your idea goes from concept to reality and grows beyond your wildest imagination. You then want to expand and grow.
Do we focus on a handful of individuals or firms in the music investment space whose appetite for a growing a grass-roots community isn’t typically in their wheelhouse?
Do you offer an equity opportunity to a committed community who already know, use and love the platform? These investors become lifelong brand advocates and there will be 100’s or 1000’s of them worldwide, spreading the word, promoting and supporting their company and the community it serves.
It’s a no brainer. Our decision to go to our users first, particularly with the early bird discount offer, was driven by the many benefits of this option.
We are showing the world our “lead investor” is in fact the Vampr userbase. A community who will spend money on the platform and who are motivated to see Vampr succeed. If we ever need to raise VC funds in future there could be no better recommendation.
Back to VCs for a moment. They look at an investment, on the basis of: a) a low customer acquisition cost, and b) amount of revenue generated per user
If the latter is higher than the cost of acquisition you have their attention.
But as important as that metric is for a successful business it’s equally important to understand when that metric should be applied.
While our cost-per-new-user acquisition is industry leading – i.e. new users sign up at minimal cost to Vampr – our revenue per user is yet to be wholly quantified. Why? Because our primary focus has been on building a community that users would see real value in being a part of. When that community had the appropriate scale and reach and the time was right, we would then create a subscription service with new features that will significantly enhance our user’s experience on the platform. This has been the approach of every established meet platform and most famously with LinkedIn who closed their Series B fundraising round with no revenue.
Up until now the focus of our revenue generation efforts has been on advertising, offering selected third parties the option to promote initiatives that we believed our users would appreciate seeing and being involved in such as Atlantic Records “Emerge” competition or the Emanate platform. But advertising was never going to be our main game.
Our business model of the future is focused on subscription revenue generated by Vampr Pro, rather than relying only on hard-to-scale revenues from advertising. Implementing Vampr Pro requires further development, which is why we are raising funds by offering equity in Vampr. Once Vampr Pro is implemented, Vampr will start to generate cash flow at a rate where it becomes self-sustaining.
To finish, this crowdfunding campaign is about more than raising capital. It also demonstrates in the most public way possible that Vampr users will spend money on the Vampr they love.
And you’ve already helped us make that point with the 130+ Vampr users who have invested in this vision before the campaign has even launched publicly 👊
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