How to Run Your Own Shark Tank with Internal Crowdfunding
Let’s say you very wisely choose to use our new internal crowdfunding platform Ignite to identify and prioritize seed stage ideas at the front end of your innovation/product development process. You put out a call for ideas that match your strategic themes, you set strict guidelines that projects must be completed with a budget of a few thousand bucks and completed in a few weeks time, and you give people a few weeks to come up with ideas. Then you turn your people into angel investors by giving them some house money to make investments. At the end of the funding round, you have a few ideas among many that have been crowdfunded - a clear signal from your employees that those should be your funding priorities. You're hitting all the right notes: lean startup, fail quickly, employee engagement, experimentation at scale. Well done.
A few weeks later, some of the ideas that get funding have built prototypes, written good business plans, or are generally viewed as showing promise. Now they need more money. Typically, the bigger budget requests would happen behind closed doors or through a budget process a few months down the line. But why miss an opportunity to rally your teams and create a little Hollywood-style drama?
Run your own internal Shark Tank, Series-A funding round instead!
Here’s how the whole process works:
Seed stage funding using Cultivate Ignite
- Figure out the basics:
- Decide where you want to solicit ideas. Typically companies use existing strategic themes or areas where they need to solve problems as guide posts for the types of ideas they're looking for.
- Who in the organization should participate?
- What's the total budget you want to allocate to seed stage funding of multiple ideas?
- Define what qualifies as "seed stage," i.e. max budget of $20k, must be completed within 6 weeks, etc. We like Michael Schrage's 5x5 framework here
- Give people 4-6 weeks to work together and come up with ideas and budgets for fulfilling those ideas.
- For those who participated in the ideation process, give them budget to crowdfund.
- Those ideas that tip Kickstarter-style (ie: are fully invested in) get actual funding and are ready to be executed.
- With the budget they were crowdfunded, teams go off and execute their plans.
As in the real-world of venture capital, after the seed stage of funding, to start to explore an idea further or more ideally grow/mature it, a company needs to go get more money at a larger scale. Welcome to the Shark Tank.
Series A - Shark Tank Style
- Decide who are going to be the Sharks. (suggestion: it doesn't have
to be just executives or management!)
- Figure out how much money each Shark can bring to the table, or combine resources into a single budget.
- Solicit intrapreneurs among those who received funding in the first round. Do they want to now try and get more budget and present to the Sharks?
- Define clear guidelines for presenting such as time allowed and general topic areas they need to cover.
- Pick a date and venue for presentations. Plan to have someone livestream it to other remote locations and record the event for prosperity.
- Pick a theme song to play before the event starts. The O'Jays "For the Love of Money" is probably too overt, so maybe something to better capture the mood, like Queen's classic Under Pressure.
- Ask someone to MC the event. A C-Level executive is always best because it gives the event more credibility.
- Each team presents, say for 5 minutes, max. Then each Shark is required to give their feedback and can ask one question. After every Shark has had an opportunity to interact with the team or individual, they are asked if they are willing to provide some funding or not.
- If this is too scary, you could wait until the end for funding decisions, or disclose exact amounts later.
- Send a company or group-wide email that evening announcing the funding recipients.
- Most important of all - make sure you actually deliver and get the projects the money to give them an opportunity to achieve their goals!
Interested in running your own Shark Tank? We'd love to talk.
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