Tom Horbye, senior campaign development associate at Seedrs, explains how to launch a crowdfunding campaign and explores the pros and cons.
Is equity crowdfunding right for your business?
Having a clear understanding as to why you are looking to raise capital via equity crowdfunding is key. It is a very public way of raising money but you can engage thousands of investors, who will be future brand ambassadors of the business.
Do you have a community? Your own community can offer early support and investment to the campaign, which can pique the interest of other investors who have not heard of the business before.
There is a misconception that a business either equity crowdfunds or raises from institutional investors but this is not the case - you can do both, simultaneously. On the Seedrs platform we’ve seen an increasing number of co-investment rounds with big name VC firms.
Select a dedicated person to manage/own the campaign
Raising investment is really hard work. It is helpful to have a dedicated person owning the campaign and managing all activities surrounding it. There is a strong correlation between prompt responses to investor questions within the discussion tab, and that investor going on to invest in the business.
Value your business appropriately
Start creating your campaign
Your campaign page is the most important thing to get right. You won’t get to meet all your prospective investors face-to-face so you need a compelling written pitch and a video to accompany. Communicate concisely what your company does, its market potential, its intended impact and how you will use the money raised to scale.
Your campaign page is a top line business plan that tells a story, highlights achievements to date and presents a clear route to future growth. Research other successfully funded campaigns for ideas to help you stand out!
Crowdfunding videos don’t have to be expensive, but they’re very important, so it is crucial to get them right. A video should be slick, engaging, insightful and sincere. Tell your story and talk about your service/product and its market potential to remind investors why they should back you.
Create a marketing and PR strategy
Considering who you want to communicate with is key. Marketing and PR around your campaign can really help build awareness and traction. Ask for an intro to the Seedrs PR & Marketing team for best practice and advice.
Before sending any communications, draft an outreach list to manage when you are speaking to potential investors in an orderly manner, avoiding any repeated conversations or missed opportunities.
This is where all your hard work pays off and your campaign is visible to a wider pool of investors. You’ve already reached out to your direct audiences, so this is when you want to use marketing and PR to drive a new audience to learn about the business opportunity.
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