CrowdFunding Podcast Interview with Simon Dixon, CEO of BankToTheFuture.com

CrowdFunding Podcast with BankToTheFuture

An interview with Simon Dixon on how 7 hugely disruptive technologies are democratising finance - the world wide web, digital money, the social networks, crowdfunding, peer to peer lending, microfinance, the mobile smartphone. Simon also explores the debt trap, the economy of freedom and the free economy.

7 Hugely Disruptive Technologies - An Interview With Simon Dixon

Rob Brown interviews Simon Dixon on the Future of banking and finance

CEO and Co-founder of BankToTheFuture.com, Simon Dixon, was asked to comment on CrowdFunding and the future of banking after his blog in responce to the Archbishops comments on the depression and banking reform. 

Simon shared how Crowdfunding offers a more transparent way for businesses to raise finance and investors to invest in private companies through online CrowdInvesting platforms like BankToTheFuture.com.

He then went onto share how the CrowdInvesting platform was founded after the co-founder Bliss Dixon suggested a more pro-active approach to changing the rules of finance than simply campaigning for change with the big 5 banks in the UK, which later led to the creation of BankToTheFuture.com.

Finally Simon was asked to suggest how we can change banking to move the economy forward.

Simon suggested three changes that need to happen

1. A reform of the big 5 banks so that they don't own depositors money, spend depositors money as they wish and create money when issuing loans.

2. A stimulation of relationship based local and community banking.

3. Promotion of alternative finance platforms like CrowdFunding, CrowdInvesting and CrowdLending platform like BankToTheFuture.com.

We would love to hear your comments about moving away from what the Archbishop calls a depression.

For more details visit http://www.banktothefuture.com or tweet @BankToTheFuture

CrowdFunding & Banking - BBC Radio Interview Simon Dixon

Sites like Kick-starter and Indigogo have made great use of the crowdfunding model’s ability to help inventive individuals bypass the traditional methods of accessing finance.

Bank to the Future is another innovative website that uses crowdfunding to help businesses and entrepreneurs connect with the investors they need.

Find the Edge’s Kenny Goodman caught up with founder, Simon Dixon, to discuss why you shouldn’t be discouraged by the state of the economy and why he’s so confident crowdfunding is ‘going to change the world’.

Here are some of the discussions between Kenny and Simon:

0.47 – What is Bank to the Future and how does it work? Simon says it basically allows anyone to be an investor and invest in private businesses. It is also a new way for businesses to raise finances.

01.55 – Simon explains his background and introduction to the world of banking – he was told he wasn’t educated enough, and has a collection of 96 rejection letters. Explains how he rose from tea boy through the ranks.

04.03 – Simon discusses the differences between raising finance for your own business and for clients.

05.30 – He explains how they raised finance for Bank to the Future – He reinvested money from his last business, and got a group of high net worth investors to commit. At the last minute he was told they wanted a third more equity, and only wanted to pay half as much for it.

07.33 – With hindsight it was the best thing that could have happened. In the end they launched the business by calling in favours and raising funds themselves.

09.11 – Entrepreneurs rather than traditional investors funded them. ‘Having lots of investors, that all invested smaller sums, that all have lots of contacts, that also understand the challenges and journey of entrepreneurship, has really been valuable in getting the brand out there.’

10.20 – Company mission was the ‘democratisation of the investment decision.’ Anybody could invest whether they had a £10 or £100,000.

11.45 – It’s an investor’s market place at the moment, so they want to make it fairer by lowering the barriers to who can be an investor. This means there’s lots more investors and entrepreneurs can make fair decisions over who they choose.

12.15 – Kenny asks how it differs to Kick-starter. Discusses the Pebble Watch crowd funding success. They’ve taken a similar concept and changed it to ‘crowdinvesting’.

15.00 – A major difference is that Kick-starter allows companies to raise funds without giving away equity. Not many companies are in a position to do this.

15.15 – Are people happy to invest in unknown businesses in these recessionary times? ‘It’s high risk, high return’.

‘Don’t get caught up in the negativity of the economy. All we’re in is a shifting economy. In the case of the UK over the last eight years the money supply has literally doubled, so there’s more money out there than there has been. It’s just simply not making its way to the right place.’

17:17 – ‘We’re in a shifting time. People want to see what’s happening with their money, there’s record levels of scepticism with traditional finance and banking, there’s double the amount of money in the economy, and most of the traditional products people have invested in aren’t working the way they’re supposed to work.’

17:50 – Kenny asks about the tax benefits investors can receive. The government are supportive of investors, and so there are some very generous tax breaks. Discusses the benefits of the Seed Enterprise Investment Scheme (SEIS).

20:06 – Almost all of the crowd investments on the site qualify for SEIS.

21:35 – Simon explains how his company can help entrepreneurs, and who they can help.

23:40 – They don’t filter to decide whether individuals have good ideas or not – the crowd – or the market – do that by investing or not investing.

25:00 – Not a place to build a following – it’s a place to monetise an existing following.

26:15 – What influences how successful a pitch is on the site? Social proof and whether the entrepreneur can market it successfully.

28.07 – ‘I really believe that this is going to be a mainstream product that’s going to change the world.’

29:30 – ‘You’re about to see an amazingly large untapped industry emerge, which will be the whole sector of assisting people in crowd funding, assisting people in marketing their crowd funds. When know you’ve got a very large sector that is about to emerge is when other people start building businesses around your business.’

CrowdFunding, BankToTheFuture.com and the future of banking Part 1

Here are some of the discussions between Kenny and Simon:

00.00 Kenny wastes no time getting stuck in – ‘Where do you make your money?’

02.02 – Simon admits he’s a bit of a ‘banking geek.’ He says ‘We need to change the way traditional banks work. Essentially there’s a few things that many people don’t know when they deposit with their bank. The first is that when you deposit money, the bank becomes the legal owner of your money, and have the authority to spend it as they wish.’

‘There’s only two types of banks lending at the moment. One, because they want a bit of positive PR, and the others because the government have got lots of initiatives to force them to lend to businesses. So the banks are no longer the institution that, if you’re a business, you go and get your funds from.’

04:45 – Simon discusses crowdfunding – ‘It shifts the world, to a world, where people can build finance based on shared ideology.

‘If you’ve been behaving well online, and been building good networks offline, then your crowd funding is going to be successful because you know lots of people who are all going to be willing to chip in a small amount to support you, because you’ve built those relationships.’

06:23 – ‘What is really interesting is when every single financial product becomes a crowd funded product. Including insurance, including mortgages – and everything will – once that happens –  shift from a world where institutions decide who gets the money, to ordinary people deciding who gets the money.

‘That’s moving to a world where what gets funded is a reflection of the values of society, rather than a world where what gets funded is the values of what makes more money for a bank.’

07:10 – ‘There’s a bigger game that I want everyone to participate in – it’s taking back and democratising the world of finance.’

07:30 – He says making money is important, but money should be used ‘for doing good.’

08:18 – Crowdfunding market is comparatively pretty small at present. ‘We’ve got a lot of catching up top do.’

09:00 – Discusses why banks create money when you withdraw. 97% of every penny in the world has been created by a bank. The difference between bank created money and ordinary money is that it’s all based on debt.

10:15 – Will the banks change? – not at the moment, they’re protected by law.

10:15 – ‘Most of the banking sector, the people who work there, are decent honest people. They just don’t know how the system works, and the system is bigger than any individual. So it’s an education process, and that starts at our universities, that have been teaching wrong models to students.

11:30 – Discusses how the company was founded with the goal of being a sustainable bank, and a model for other banks.

12:10 – ‘I think entrepreneurs are the true heroes of the world.’

12:30 – Simon says his team are committed to changing the world, and that to be a good entrepreneur you have to be deluded enough to think you can do that.

13:30 – Discusses the fact that Sir Richard Branson has recommended Bank to the Future.

14:33 – Simon talks about his visits to the  House of Commons and Lords to help them increase competition in banking.

15:55 – Says the financial crisis is not a natural disaster, it’s a human creation. Also says it can act as a catalyst for change.

16:37 – Simon discusses expanding, plans for the future, and why crowdinvesting is not currently legal in the US.

CrowdFunding, BankToTheFuture.com and the future of banking Part 2

Founder of CrowdFunding & CrowdInvesting site BankToTheFuture.com and author of 'Bank To The Future: Protect Your Future Before Governments Go Bust'