10 Steps to a Successful (Equity) Crowdfunding Campaign
A crowdfunding campaign doesn’t succeed on its own. As an entrepreneur you need to be 100% committed in order to make it succeed. That doesn’t mean there aren’t any tips and tricks you can apply in order to boost your chances. The most impactful actions you can take right now are listed below, so get started and be successful! Once you've understood and acted upon these, check out '10 (More) Steps to a Successful (Equity) Crowdfunding Campaign'.
- “Failing to plan = planning to fail”
Funding is of extreme importance to your company: it’s the lifeblood of a start-up. And yet entrepreneurs still forget to plan timings and actions for their online funding campaign. You’d never skip an appointment with the bank, so why skip an appointment with your online capital raise? Make sure the campaign is the #1 project in your company for as long as it runs.
Do you have a team around you? Then plan a crowdfunding meeting every Monday with the actions for that week. Do you work alone? Then you’ll be setting up your own to-do list for that week. Which people need to be called, who haven’t invested yet, which media outlets might be interested, and so on.
Do it now: based on your funding target and deadline, calculate how much you'll need to attract per week, and make a detailed overview of the actions that will get you there. MS Excel will work just fine for this. Not sure how to start planning? Drop by our weekly crowdfunding kick-off session or get in touch!
- Crowdfunding is sales
You’re selling a part of your company in the form of shares. In other words, you’re attracting investors (read: customers) to your company (read: product)! So, make sure you have a clear, engaging sales pitch for your crowdfunding campaign. Think about what you’re selling and its value for your potential customers. Don't forget to mention the market size, scalability, your company's USPs compared to its competitors and, of course, ROI. Be sure that everybody will understand the uniqueness of your offer. In addition, if somebody asks "how's it going?" your answer is always “it's going great!” Success breeds success, so (without overdoing it of course), tell yourself and others that your campaign is going to be successful, and it might just be!
Do it now: look at your company as a product and write a short marketing plan. What benefits does your company offer to investors? How should it be ‘branded’? Which keywords will attract the attention of a certain type of potential investor? And of course, why will online media outlets find it interesting enough to write about? For instance, MeetJune made the effort to get their branding right. This helped them to become the most visited campaign on our platform, and get mentioned by TechCrunch.
- FFF - a bigger network than you might think
Friends, family, fools; basically all entrepreneurs begin with their own network when starting a crowdfunding campaign. That’s logical if you consider that these people are more likely to invest in any idea you've come up with because they support you. But your network of FFFs might be much larger than expected. Think of your sports buddies, old friends from college, neighbours, parents of your child's friends, friends of friends, family of family, ex-colleagues and so forth. Don't underestimate people's willingness to help other people - especially if they see something in it for themselves!
Do it now: make a record of everyone you know who may potentially invest and estimate the size of their investment - once again, MS Excel will do the trick. Track their status (called/interested/not interested/invested) during the campaign. This will help you to gauge if you've overestimated their commitments, and need to adjust your planning accordingly.
- The video is your key sales moment
Let's face it, people are lazy. Don't expect everyone to read your entire business plan. It sounds superficial, but trust us, many will choose whether or not to invest based on the quality of your video. A substandard video is easy to spot, and means your campaign is unlikely to be taken seriously. Money spent on design on content is money well spent.
Certain things should be made very clear in the video: scalability, market opportunity, your track record, the team and the ROI. Do not allow people, real human beings, to be replaced by animations or graphics. People are mainly persuaded by other people, not by products. The product can change, the team and the entrepreneur less so.
Do it now: note down the USPs of yourself and/or your team. Which unique qualities or skills of the people involved are going to ensure the success of your company? What is your personal experience and what's your track record in business? Animations are nice, but this is what people really care about. Take the campaign video of Van.Eko, for example. Here the entrepreneur, Vaniek Colenbrander, focuses on his personal story and motivations before introducing his awesome product.
- Events are a chance for personal contact
There are surprisingly few offline networking or pitching events specifically for entrepreneurs conducting a crowdfunding campaign. This is not an excuse to rule out promoting your campaign at events completely. In fact, every event you attend as an entrepreneur can be turned into a promotional opportunity. The beauty of crowdfunding is that everyone is a potential investor. Be sure to mention your campaign at the end of a speech or conversation as a call to action,carry a special set of business cards for the campaign itself and, of course, always follow-up afterwards.
Do it now: make a list of all the events at which your target audience (of potential investors) may be present. Attend at least two events for each target audience you've identified. Don't obsess over getting into events with thousands of attendees. A more intimate setting tends to encourage personal contact and trust, which is exactly what's required for people to invest. Symbid hosts a regular pitch night during which entrepreneurs sometimes address a room of only 30 - 40 investors, but leave with 10+ investments.
- Start your campaign with a BANG!
Informing and engaging your network by email or phone is simply not enough. Nothing creates attention and commitment like offline, personal contact - 70% of a convincing pitch is dependent upon body language, eye contact and intonation. If you really want to convince your network to invest, then organise a campaign kick-off. This may seem like it requires a lot of time and energy, but we've seen that such events are an efficient way to create traction around your campaign. What's more, these events produce immediate results. With your entire network gathered in one room, you can gauge who is likely to invest and who isn't, so you don't waste time in the future.
Do it now: decide on a kick-off date and plan for the campaign to go live a few days beforehand. It's best if there are 5 - 10 people who've already invested present at the kick-off, and can explain why they've invested. Be sure to tell everyone how much you appreciate their support, and don’t forget to mention what's in it for them. Don't be afraid to go a step further in trying to make these early investors feel special.
- Engage investors and create trust with regular updates
Entrepreneurs forgetting to update their investor community is something we see time and time again. We understand you're busy, and so do they, but a few sentences explaining what's been going on in your business has a big impact. Updates show investors and followers (read: potential investors) that you’re working day and night to make the campaign succeed. It implies you’re 100% committed and not afraid to share your progress and ask for feedback.
Entrepreneurs often forget that ‘business as usual’ is also worthy of a new update. Hooked a new partner? That’s an update. Got your first or 500th customer? That’s an update. New intern? That’s an update. Visiting an event to to network with potential investors? That’s an update. On a practical level, updates help to keep your campaign fresh in people's minds and can be a valuable marketing and PR tool.
Do it now: plan a series of weekly updates, each taking no more than 30 minutes of your time. Always ask yourself: what's the best thing that's happened to my company or campaign this week? That’s right, that’s an update! One of the reasons BStriker were so successful was because they kept potential investors engaged with regular updates, and maintained this close relationship with the crowd since they got funded. This is what crowdfunding is all about!
- Are you sure you're even ready for a crowdfunding campaign?
Dedication can be the deciding factor in the success of a campaign. The main reason crowdfunding campaigns fail is that the entrepreneur isn’t 100% focused. Of course, you’re a busy entrepreneur and time is money, but all too often website launches, prototype development, marketing issues, interviews or other business challenges get in the way of the capital raise. You wouldn't let this happen to your loan application at the bank, so don't accept it for your crowdfunding campaign either. Always keep the deadline of your campaign in mind, and plan around upcoming events, projects and milestones.
Not sure if crowdfunding is right for you? Symbid provides professional financial advice to all its entrepreneurs, making sure that you get the right funding at the right time, whether that's crowdfunding, venture capital, angel investing or a bank loan.
Do it now: start your day with a short list of to-do’s for your campaign. End the day by checking the progress of your campaign. Do whatever you want in between, but your priority should be getting in the money! Whatever you do, don't ignore your campaign for days or weeks at a time - always keep it moving to gain momentum.
- Mailings – often the biggest missed opportunity
Almost all entrepreneurs use some form of mailing during their campaign. Whether it’s a private email or a mailing campaign to your entire network, these mailings are an essential tool to communicate specific information quickly and to a large group of people. The trick is in communicating the right information at the right time!
The first contact moment shouldn’t be based around paragraph 3.1 of the shareholder agreement, nor do your personal contacts care which valuation method you’ve used. Make sure your message is aimed at the right audience. For example, if you're pushing a high tech kids toy, parents won’t be interested in how you patented the unique fibre structure, and techies won’t want to hear how your company's core values are child empowerment and education. Segment your audience, alter the content accordingly, and give the reader a reason to forward your mailing to their own network.
Do it now: use the AIDA (attention, interest, desire, action) marketing model for each of your target audiences - hopefully you've identified 3 - 6 unique personas - and plan content-specific mailings on a weekly or biweekly basis.
- Social media. Social media. Social media.
Fact: social media is crucial to crowdfunding. More external links to your campaign means more funding, it's that simple. Your target audiences of investors are probably highly active on social media, and so should you be. Consider which social networks your potential investors are likely to use (Facebook, Twitter, LinkedIn, Instagram, Pinterest etc.) and tailor your message for each network. Facebook can be more informal, less professional than LinkedIn, for example.
We see entrepreneurs underestimating the power of social media all the time. It's an efficient way of building a public face for your campaign, adding credibility and momentum. Make sure you outline your communication partners before you go live. These partners can be individual influencers, magazines, blogs, etc. - anything or anyone that might have an interest in supporting your campaign. Focus on the channels that your target audience are likely to listen to and make full use of the (often free) social media planning tools, like Hootsuite. The key to an effective social media presence is tracking what works, what doesn't work and constantly adjusting your message. Don’t be afraid to spend a bit of money on social media advertising - Facebook is a good place to start.
Do it now: create a 140 character pitch for each of your target audiences. Add to this engaging visuals that are sized specifically for each social network. Make a hit-list of media and influencers that you’d like to connect in order to get your message across. Don’t be afraid to include them in your messaging on social media. The worst case scenario is that they don’t share it.