A recipe for crowdfunding successJun 29, 2022
There are many ways to fund your business venture. Equity crowdfunding, by which you invite a multitude of investors to own shares in your business, has been consistently growing in popularity as a way to raise capital. Crowdfunding success stories such as Monzo, Revolut and Brewdog regularly make the headlines and many entrepreneurs dream of following in their footsteps. But what do these campaigns have in common that led them to succeed?
At ISQ, we have helped a significant amount of clients achieve their crowdfunding ambitions so we believe we have a pretty strong idea of just what makes a successful campaign. Here’s our recipe for crowdfunding success:
Start with a strong appetite
Crowdfunding isn’t the silver bullet. It takes preparation, hard work, determination and resilience. If your heart isn’t completely in it from the start, chances are investors will sense it. So before you even start working on a crowdfunding campaign, make sure you are 100% certain that this is the way you want to go.
Are you ready to crowdfund? Is this the right time for you and your business? The crowdfunding market has considerably matured in recent years and it has become very competitive. If you are at the very early stages of your business, it may be too early to crowdfund. Sometimes, waiting until you can show some traction or at least clear milestone achievements is the best plan of action.
OK, so you are now hungry and ready to go, it’s time to start assembling.
First, take an engaged leadership team.
Whether you are a one-man band or have a fully developed team, as the leader(s) of the business, you will need to be the face of your crowdfunding campaign, this isn’t something you can easily delegate. It is a well-known fact that people invest in people and no one knows your business as well as you do, no one can share your vision quite like you can. You are your own secret weapon, make use of it.
Add in a clear strategy.
Equity crowdfunding isn’t charity, investors expect to see a return. So having a clear path to growth will be instrumental in bringing your investors over the line. And be transparent about how you are planning to use the monies raised.
Throw in a dose of branding.
And we don’t just mean a cool logo! As Simon Sinek once said, ‘people buy into why you do what you do’. This is no different for the crowd. A strong brand, with a clear definition of what you stand for, will help people identify with your values and convert them into investors.
Mix in your own community.
Successful crowdfunding campaigns are backed by a strong community of small, medium and large investors. But these people don’t just appear out of nowhere. They are your family and friends, your customers, business partners, suppliers, and mentors. In other words, they come from your own network of contacts. To get the backing of the wider crowd, it is imperative that you get the backing from your own community first.
Bring it together with plain English.
The crowd is made up of many segments of the population and your pitch needs to be understandable to anyone who comes across it. You need to convey what you do in a clear and concise way, no matter how complicated or techy your offering might be. If people can’t easily understand what you do, you are likely to lose their backing.
Finish with lashings of marketing.
The crowd isn’t going to magically stumble upon your campaign. You’ll need to have a comprehensive marketing plan in place before and during your campaign if you want any chance of bringing it over the line.
And that is your recipe for crowdfunding success!
If you’d like to speak to us about your crowdfunding aspirations and how we help our clients, please book a call below.