5 frequently asked questions by entrepreneurs considering crowdfundingDec 11, 2018
How quickly can I launch my campaign?
The answer to this very much depends on how far down the process you already are. Have you already got investment lined up or are you yet to speak to potential investors? Have you got an investor deck, purposed for crowdfunding, or do you need to start drafting one?
It also depends on how much time and resource you have to dedicate to your campaign. Do you have a team who will work on the crowdfunding campaign with you or are you doing this on your own alongside running your business?
If you choose to work with us, we will aim to get you ready for launch within 10 weeks. Our programme of support is quite fast-paced but it is intended to make sure your campaign gains momentum so you can launch with maximum impact.
Apart from drafting a pitch and shooting a video, what else is there to do?
Actually, quite a lot! If you want your campaign to go well, you’ll need to implement quite a comprehensive communications and marketing plan in the run-up to and during your campaign. If you thought you could just write a pitch, shoot a video and let the crowd come to you, you are in for a rude awakening. Crowdfunding is not a silver bullet; you’ll have to work for investor attention. It’s competitive!
A slick campaign requires a lot of attention to detail too, from high-quality images to fine-tuned messages, you want to stand out from the crowd.
Why do I need to bring my own crowd to the campaign?
This is far from a novel concept, it’s simple human psychology. People like to back winners, it’s less scary than taking a risk on an unknown entity. So if you come to the platform’s crowd with strong validation from investors you’ve secured prior to launch, you are much more likely to get noticed by those investors that don’t know you yet.
If you had to choose between two restaurants, would you go for the busy one with great reviews or the quiet one with no reviews? When you engage your own crowd before opening up to the greater public, you’re basically filling those tables and building up good reviews.
It stands to reason that the people who already know you are more likely to trust you so it is logical that they should be the first to back your campaign. If you can’t convince your nearest and dearest that yours is a good idea, then why should complete strangers invest in you?
How should I value my company/how much equity should I sell?
Ultimately, no one can tell you how you should value your business, that decision is for you to make. There are multiple methodologies to decide a company’s valuation, all have their advantages and disadvantages and none is the holy grail.
If you look at discussions on crowdfunding campaigns, you’ll see that the valuation is often discussed with very little consensus on the matter.
Our advice would be to set your valuation using your preferred methodology then once you have your figure, ask yourself if it will be attractive to the crowd. Ultimately, in order for crowd investors that don’t know you to get past your valuation, you’ll need to show you’ve already convinced people to purchase equity at the pice, which brings us back to the “busy/quiet restaurant” analogy.
It’s ok for people to question your valuation, it gives you a chance to justify your reasoning behind it and you should absolutely have a strong response to those questions prepared. What you want to avoid, is people being so put out by the number that they just scroll on by without a second thought.
Can you manage the entire campaign for me?
We could but, we wouldn’t want to. And neither should you!
Some of the campaigns that do best are those with a charismatic leader at the helm. The saying “people invest in people” is true when it comes to crowdfunding.
You want your campaign to be a true reflection of your brand and of who you are. Investors like to know that they’re dealing with the person in charge and they like authenticity.
In our experience, campaigns run by consultants don’t do so well. So if you were hoping to handover your campaign while you do other things, we’d have to disappoint you. However, we will help you in any way we can to make your crowdfunding journey as easy and smooth as possible. If you work with us, we’ll provide you with structure and clarity, in what can sometimes feel like a daunting project. This is the reason our clients have such a high success rate!