Ben Franklin, America’s first crowdfunder

$100 bill

Ben Franklin was a remarkable man. In his life he assumed many roles that won public acclaim, including successful businessman, publisher, inventor, statesman, and revolutionary.

But whilst those roles may be familiar to the public, his role as a fundraiser may not. Ben Franklin helped raise money to create many adored institutions that still stand today including the University of Pennsylvania and the Philadelphia library.

Ben Franklin: master crowdfunder

But one fundraising project he didn’t lead yields lessons for modern startup founders seeking capital. Recounted from his autobiography, after just having successfully raised money for Philadelphia’s first hospital, a Reverend approached Franklin for his help in raising for a meetinghouse.

Franklin, wary of wearing out his welcome through constant solicitation, demurred. The Reverend then asked for his investor list, he again refused on the same grounds. Finally, he was asked for advice, this he readily granted:

In the first place, I advise you to apply to all those who you know will give something; next to those whom you are uncertain that they will give you anything or not, and show them the list of those who have given; and lastly, do not neglect those who you are sure will give nothing, for in some of them you may be mistaken.

After taking Franklin’s advice, the Reverend obtained a “much larger sum than he expected, with which he erected the capacious and very elegant meetinghouse that stands in Arch street.”

Another Franklin fundraising habit was to “prepare the minds of the people by writing on the subject [of the fundraise] in the newspapers.”

Applying Franklin to get more Benjamins

These strategies align perfectly with the modern age. Regulation Crowdfunding [Reg CF] allows founders to raise capital just as Franklin did. To “prepare the minds of the people” founders should “test the waters” or gauge interest in the raise beforehand, by securing pre-commits.

Second, they compile their list of likely and unlikely investors. In modern parlance, these are the founder’s ambassadors: people who believe in the founder, their team, and their company. These ambassadors don’t necessarily have to be big investors. If they are willing to post the raise on their social-media accounts to increase visibility, they are meaningfully helping.

Founders that apply Franklin’s methods by compiling lists, selecting ambassadors, and testing the waters will likely have successful raises, even if they aren’t founding Ivy League institutions or public libraries.

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By Jossey PLLC

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