How To Get Your Crowdfunding Campaign Off The Ground
There’s no way of getting around it… crowdfunding is really, really hard work! It consumes your life for at least 6 months and you have to be prepared to give up a huge part of your day job/personal life in order for it to be a success. But the rewards if it works and your campaign is a success far outweigh the sacrifices you make – and these are not purely financial.
Of course crowdfunding is a great way to raise private investment for your business without having to go down the traditional routes such as VCs and banks, but it also gives the greatest sense of satisfaction and achievement when you put a campaign together and it works.
The investors you get through crowdfunding are ordinary people who are willing to give you their hard-earned cash and savings so that you can do the extraordinary and grow a business. They do this because they believe in you, your product and vision and they are backing you and the team, which I think is really rather special.
Having successfully funded three businesses through crowdfunding I thought I would share what I have learnt on everything it takes to get your pitch up and running.
Start with a plan
If you don’t have a business plan – write one. I know from experience that this can be an incredibly daunting task, especially if you have already been trading for a while and have grown organically. This should cover all of the main points of your business and strategy for growth including idea, market, financials, differentiation and team. It is important to know what you want to achieve, how you plan to get there and how much money you are looking to raise. This will also form the basis of your pitch.
Get your ducks in a row
This means all of your financials (both historical and forecasts – minimum 3 years) need to be up to date and most importantly you must be able to understand, explain and justify them. It is also important to have all of your legal documents up to date with Companies House and Articles of Association in order – I strongly advise you get a good lawyer to work with you for the project.
Approach a platform
Once you have a plan and your in-house affairs are in order it’s time to meet with a platform. There are two main ones for raising equity financial from “the crowd” in the UK. Crowdcube and Seedrs. Both have great networks of investors who regularly invest in companies on the platform and both platforms do a great job of guiding you through the process and helping you get a strong campaign together. It is also worth noting that these companies will support you – but it is not their job to get you funded and you cannot rely on their crowdfunding communities alone.
Get a great video
I can’t stress enough how important the video is. It is an extremely powerful and emotional tool and lots of investments will be made purely on your video alone so it is worth investing in. It is hard work writing a pitch and there are lots of things to think about and organise but it is definitely worth it. If you are going to spend money on one thing to support your campaign this has to be it (£5k-10k is not unusual or outrageous!)
Get funds committed before you go live
It is really important to start marketing your campaign before you tell the world about it. Speak to your friends, family, professional contacts and top customers first and explain what you are doing. I’d recommend trying to get at least 30% of your target committed beforehand so that you have a healthy amount of money in the pot at the start of your campaign. People like to see other people invest in the business first so that they know others have confidence in you too.
Bang the drum!
Raising money doesn’t happen by accident, nor does it happen overnight. If you build it, they will not come. You need to market your campaign every single day. Talk about it on every social media platform, tell the press, put it on your website, if you have a paid media budget consider using some to support your campaign, email your customers, friends and family and ask them to support you in any way they can, even if it is just sharing the message or sending it on to someone that they think might invest. Often it is from the most unexpected places that you will get the best reaction so leave no stone unturned.
I would also highly recommend creating a separate 12 week marketing calendar for the project for 4 weeks before, during and after your campaign breaking down exactly what you are going to do, when you plan to do it and who is responsible for actioning each part of the plan and most importantly – you need to stick to it.
If you are considering raising a round of investment through crowdfunding for your business and would like a free 1:1 consultation please email me here >