RESTUBE GmbH, a start-up with roots at KIT, was the first company to avail itself of the opportunity to launch a crowd investing campaign on KITcrowd. The RESTUBE team produces and distributes a safety system for all types of water sports. In critical situations, a floatation device is inflated by a gas cartridge to save the wearer from drowning. Between January and May 2016, the RESTUBE campaign was active on the crowd investing platforms Seedmatch and KITcrowd. As early as 23 days before the end of the funding period, the company reached its funding limit of 600,000 Euros thanks to the support of 640 investors. We interviewed the founder and CEO of the company, Christopher Fuhrhop.
KITcrowd: Congratulations on your impressive success! Why did you choose crowd investing as a funding source and what are its advantages?
Christopher Fuhrhop: We actually used quite a few different funding options in the past. At the beginning of our start-up launch, we received the EXIST entrepreneurs’ grant and, afterwards, follow-up financing from the “Junge Innovatoren” (Young Innovators) funding programme. We had also successfully implemented four rounds of funding with different investors of different sizes. We are now heading for the mass market. In the context of the crowd investing campaign, we received not only additional capital but also supporters who are interested in the product and its success, talk about it, and thus directly contribute to the visibility of RESTUBE.
KITcrowd: You have been able to raise a total of 600,000 Euro. How are you allocating these funds?
CF: We will use these funds for taking RESTUBE to the next level of professionalism. We will improve the scalability of all processes to ensure that RESTUBE becomes even more sustainable. Our product range will be expanded, and especially our corporate communication will receive additional funding. This will help us make our website more professional and create a similarly professional product video. Another measure will be to recruit more members to our team, especially in the marketing, sales (domestic and international) and management departments.
KITcrowd: How did you manage to draw the attention of so many investors to RESTUBE?
CF: We deliberately launched the campaign on Seedmatch, one of the largest platforms in Germany. Of course, we told all of our contacts about it, including the KITcrowd network. We also intensely focussed on marketing and press relations, which ensured regular articles about RESTUBE in the media. We also mobilised our private networks. The whole thing eventually developed its own dynamic, and we were able to generate the necessary momentum fairly quickly. Many people say that a good start to a campaign results in a similarly high follow-up. We can confirm this. What is particularly important is a continuous stream of news, transparency and fast reactions.
KITcrowd: How do investors profit from their participation?
CF: The shares are profit-participating loans: This is a special form of loan, by which investors receive a percentage share of the economic success of RESTUBE – an investment with full opportunities and risks. The loan can be cancelled by the investor after five years or transferred by the company after seven, in which case the so-called “bonus interest upon termination” is paid out, based on the revenue and valuation of the company. On top of that, our investors received goodies such as a RESTUBE basic set with spare cartridges, which helped us raise awareness of the product. And, of course, we wanted every one of our investors to use the RESTUBE for their own water sport adventures.
KITcrowd: Did you experience any surprises during the crowd investing campaign, positive or negative?
CF: The project largely went as planned. We anticipated a torrent of questions about the company and our business plan especially in the beginning, but it turned out to be quite manageable. It was a nice surprise that the campaign worked so well. Almost two thirds of our investors did not know about RESTUBE in the beginning, yet they trusted us very quickly. Beyond the crowd investing campaign, we have even been able to get a new large-scale investor on board who has contributed 200,000 Euro.
KITcrowd: What advice do you have for future project starters?
CF: We would advise anyone to look at a variety of different platforms, especially in terms of their size, financing model and internal process structures. Marketing is also important. Even the best campaigns will fizzle out if their communication is not up to scratch. It is helpful to keep an eye on the different target groups. Emotional people are best reached with an appealing video, while those more driven by figures will pay closer attention to your business case. I personally think it is also important to talk to others who have already made experiences with crowd investing. It helps prepare you for all eventualities and gives you valuable advice.
KITcrowd: Thank you for the interesting interview, and the best of luck to you and your team!
If you have any further questions about the topics of crowdfunding and crowd investing, feel free to get in touch with the start-up advisors at KIT.
More information on RESTUBE is available at www.restube.de.