ISQ founder Kirsty on How to Make Your Equity-Crowdfunding Round a SuccessMay 15, 2015
In the last five years, equity crowdfunding has become an increasingly common way of raising capital for businesses. Whilst traditional fundraising methods can be complicated and time-consuming, equity crowdfunding on sites such as Seedrs.com can be a quick and highly effective way of raising capital for your startup. I believe ISQ’ own journey is a testament to this. When we launched last year, I decided to fund ISQ via a series of equity crowdfunding rounds. The first two rounds took place in April and November of 2014 and closed within one week. Last week we launched our final crowdfunded round which is also well on it’s way.
Here are just some of the things that I think contribute to a successful equity crowdfunding raise.
The key to a successful raise is in the planning. You could have the best idea in the world, but if it is poorly executed it will likely fail. When you are planning an equity crowdfunding campaign it is essential to get your video and your pitch right and your community ready to engage. Plan your marketing strategy ahead of time and plan ahead to engage your network. You need to spend time preparing your video and pitch to ensure that they tell a clear story in a short space of time, whilst giving a good, general overview of your business proposition.
“You could have the best idea in the world, but if it is poorly executed, it will likely fail”
A Good Video
The video is often the first thing people view when looking at your campaign and it’s your video that should make your potential investor feel moved enough to want to learn more, and therefore read your accompanying written pitch. Whilst your video doesn’t have to be of particularly high quality, it does have to be informative and to the point. A well presented, professional video that captures the personality of your company and your passion for your business will grab the viewer’s attention and make a real impact. A poor video can be really harmful, no matter how good your product is. In order to ensure your video matches your company’s potential, plan it well in advance and have a script and storyboard ready before you shoot.
“…it’s your video that should make your potential investor feel moved enough to want to learn more”
Bring the Crowd
In equity crowdfunding, momentum is everything! I can’t stress enough the importance of using your pre-existing networks to support you before, during and after your round. Contacting and preparing your network for your round should be written into your plan well before writing the pitch and recording your video. Ideally, your network of supporters will seed at least the first 20-30% of your round. This will give you the momentum needed for external investors to take an interest. I really would not recommend to any of our users, launching a campaign without having already secured 20-30% of the funding from their own network. Early momentum provides the market validation that investors look for before they think about investing themselves. By harnessing the power of your existing crowd, you will be able to get so much more out of your round. To crowdfund, believe it or not, you need to be able to bring the crowd!
“I can’t stress enough the importance of using your pre-existing networks to support you…”