An Exclusive With Plum Alley’s COO: How Crowdfunding Is Changing The Way Women Invest and Start Businesses
These days we all know the power of crowdfunding in helping businesses and ideas get off the ground. Crowdfunding raised $2.7 billion and funded more than one million campaigns in 2012 alone. Lately, crowdfunding has become a source of seed capital for many startups by allowing entrepreneurs to have access to a greater number of people who want to invest in their company.
Women are the champions of the crowdfunding phenomenon. They raise an estimated 11% more than men, and women-led campaigns get 1.3 more contributors than men lead companies, according to CrowdExpert. And, research shows that these women are then running much more successful companies. A McKinsey & Company yearly report called “Women Matter” says that companies with some 30% or more women in top-level functions perform better. These companies have a higher return on equity (11.4% versus a company with less women in executive positions), their operating results are better (11.1% vs. 5.8%) and stock price growth is significantly higher (64% vs. 47%).
My interest in crowdfunding and it’s implications on female led businesses led me to Plum Alley, a crowdfunding platform dedicated to women. I interviewed Sarah Long, Chief Operating Officer of Plum Alley, about the company and also got some insight about how to successfully launch a crowdfunding campaign.
AE: Where did the idea for Plum Alley come from?
SL: Plum Alley was founded in 2012 by Deborah Jackson, who spent more than 20 years on Wall Street. She then retired and wanted to figure out what she wanted to do next, as part of the next chapter in her life. She took some time and what really kept coming home to her was that she really wanted to support women. And a lot of that came out of having worked in a male dominated industry. Throughout her career she met these amazing women, and she was seeing such success stories. Deborah was one of the cofounders of an incubator called Women Innovate Mobile, and she was an angel investor for women in tech. She decided to put her money where her mouth was; she was telling these fabulous women to start businesses and go after their dreams, and so she founded Plum Alley.
Plum Alley began as an ecommerce site, which was was a business model she understood from her days on Wall Street. It only sold products created by women founders that also focused on women as the target consumers. Deborah did this for a year and was successful. One of the things she found was that people kept telling her they really could use capital to take their businesses to the next level. So it clicked in her mind and she finally said, that’s what we should be doing. We should be finding ways to get capital into the hands of these women with these great ideas. And so she decided to try out crowdfunding. For a year she worked with a minimum viable product and had a pilot class of projects that went live. They had an 80% success rate on those projects, compared to Kickstarter’s 44% and somewhere in the 20s on Indiegogo. What it really showed us was that there was a need for this. And so a year later she did a capital raise, and we’ve invested in building a state of the art, custom built site for women crowdfunding project creators. Eighty percent of Plum Alley’s audience is women. We love Indiegogo and Kickstarter and how they cracked open the market, we just think that there’s also space for a different offering, something that has a focus on women.
AE: Plum Alley’s new site launched on October 22nd. What’s different about the site that we should look out for?
SL: It maintains the beautiful look and feel of the old Plum Alley, with that ecommerce-shopping look to it, but the core of the changes is we’ve created a navigation bar. When you go in and upload your information to start a campaign, you unlock a section of the site that has all the knowledge that we’ve gained over the last year, and from the collective experience of the staff, and it basically walks the users through the entire campaign process. Instead of just saying here’s a form to upload your project, it walks you through it. It’ll show you okay, you have an idea, here’s how you move forward with that. You’ve uploaded your materials, here’s what should be in your description. Here’s how you should think about setting the right fundraising goal. Once you’ve uploaded your materials, how do you get ready to run an actual campaign? How do you think about reaching out to your friends and family? It walks you all the way through the process of your campaign going live, then ending, and then following up. We really tried to put as much knowledge into the product as we could. The way Deborah puts it, she wanted to create a “what to expect when you’re expecting” of crowdfunding; why should every woman who wants to start a project start all this stuff new, when there really is a pretty standard series of steps to follow in order to launch a successful campaign.
AE: What types of projects do you foresee launching on Plum Alley?
SL: Plum Alley seems to work with any woman who has an idea for a project or a venture. Some of our projects are nonprofit, mission driven, socially driven activities, while others are consumer products and artistic ventures. They really run the gamut. We are just about supporting women innovators. We do curate the projects that go on the site, so we don’t just allow just anything to be uploaded and we work with women to make sure these projects are in really good shape. One of the things we found that the innovators have in common is that women tend to have projects and ideas that matter. If it’s creating a product, it tends to be a product with a purpose. One of our successful campaigns was for multivitamin water for women to help them get access to the daily nutrients they need. We have one potential project creator with a specially designed bra to be worn by women who are undergoing breast cancer treatment. She is a breast cancer survivor herself, and there are very specific needs in trying to create a beautiful fashionable garment that restores a woman’s feelings of dignity throughout that treatment process. A lot of the creators’ for profit businesses also pledge to donate percentage of profits to a charity that matters to them.
AE: It sounds like you’re very hands on with these projects. You’re really investing in these women who are campaigning for funding.
SL: Completely. Plum Alley was created because we wanted to help women succeed. We wanted to empower women economically to make their dreams and businesses possible. When you hear the success rates on the other crowdfunding sites, it is clear their approach is much more transactional. And it was very important to Deborah that it is a site where women can succeed. We really try to be present for the women.
AE: Across all crowdfunding platforms, it is known that mostly women, and not men, are supporters of female-led campaigns. Does Plum Alley want to change that dynamic?
SL: Women-led projects are more successful on the whole than men’s projects, across all sites. Research shows women to support women. You can see that as a bias, but we choose to see that as actually a really empowering thing. There’s so much about when taking one another other down or the competition between women in the workplace, and it’s really good to see that when it comes something as tangible and economic as crowdfunding, women really do want to support other women. That is something that is important to us at Plum Alley, for our community is majorly women. We are also very proud of the 20% of our audience that we think will grow, the men. One statistic across all platforms is that 80% of the funds raised by any given crowdfunding campaign comes from the network of the project creator, and 20% comes from the site itself. It’s really about galvanizing your network, introducing men to Plum Alley who support the individual project of the creator who then will look at the other amazing things being done by other women.
AE: What are your top 3 tips for success for someone who is interested in launching a project through Plum Alley?
SL: If you were going to start a project tomorrow, I would say first and foremost, plan in advance. A lot of people will upload a campaign and figure it out on the fly. We recommend women start 30 days at least before starting their campaign to write up their materials, starting to plan events, and having a calendar so you know what you’re going to do on each one of the 30 days of that campaign. We have found that having a plan is the single most determining factor of whether or not they are going to be successful.
My second tip is being willing and ready to reach out and ask for money. I think that’s hard for everyone, and for a lot of women it’s very uncomfortable for them to ask for help and money. Mentally prepare yourself. Practice with a friend. You are fundamentally raising money online, a lot of people think they can just upload a campaign and think that the crowd will find you, and that’s simply not how it works. They really need to plan to reach out to everyone they know.
The third tip would be to make sure if you’re doing a project, you are willing to give up your time and energy to make this a reality. To really show that it’s important to you. A lot of people shy away from the campaign. People give to people as much as they give to ideas. If you really believe in this idea, be ready to articulate why this matters to you, and why this should matter to them as well. Once you’re able to explain who you are, what you’re doing, why you care, and why they should care, that’s most of the work right there. It’s really about making that connection personal.
AE: What do you see for Plum Alley in the future?
SL: By next year we are planning to serve hundreds and then thousands of women on this platform. We’re focused on just the United States for now, as we only work with creators with a US bank account. Every week we get emails from women around the world who want this sort of website available to them so a couple years down the line we’d love to be serving women globally.
Looking through their new site, I found it very easy and a lot of fun to use. They really do emphasize in helping women navigate the crowdfunding process. They also have a section with articles such as “Crowdfunding 101” and “Admire Leadership and Use Your Influence.” I’d love to see more content written in the future, perhaps highlighting the trajectory of some Plum Alley projects and alumni, along with more news on the latest in crowdfunding and female-led businesses. I had fun exploring the current campaigns, which can be filtered by a variety of genres, including Arts & Culture, Causes, Education, and Media & Publishing. Once you click on a campaign, what’s a nice feature that you don’t see on other crowdfunding platforms is ease of donating and choosing a reward. The rewards are clickable directly like adding to a shopping cart, and are enlarged and centered below the project video and description. It makes the process super seamless and fun! Some of my favorite projects live right now are CrissCross: Intimate Apparel and SheerStock. You can check out other live projects and learn more about Plum Alley at plumalley.co.