Equity crowdfunding has flourished as a key form of alternative finance for early and growth-stage businesses. It’s become a strong alternative to bank loans and other traditional funding sources, allowing entrepreneurs to court a crowd of engaged investors for financial backing.
However, the popularity of equity crowdfunding has left platforms like Crowdcube and Seedrs rather overcrowded. With hundreds of active campaigns at any one time, it’s pretty challenging to grab the attention of investors. So, how can you make an impact?
Tell your story with a video
Pitch videos let you put across all the key aspects of your pitch, showcase your brand, and indeed yourself as a founder, all within a few minutes. While it’s tempting to splash out and make a blockbuster, investors can see an elaborate production as a frivolous way to use a startup’s limited funds.
This doesn’t mean you can’t make your video look professional or visually compelling – you just need to hone your creativity, get in the minds of investors and put across your key selling points.
Why are you best placed to provide a product or service? How big is your market? Have you found a gap? Have you already won over any high-profile investors?
Next, find a reasonably-priced production company that you feel understands these elements and is able to help you communicate them.
Offer unique rewards that won’t break the bank
Just as Kickstarter and Indiegogo offer rewards in exchange for supporter donations, businesses running equity campaigns can also offer rewards to sweeten the deal.
We find it’s best to offer specific tiers of rewards and to make the prerequisite investment amounts odd numbers. For example, tickets to an exclusive event could be offered to investors pledging £1,700+, encouraging investors to put in more than the rounded number that precedes it (in this case £1,500).
Your rewards don’t need to be grandiose or costly to your company. What can you offer that’s unique? Maybe it’s the product or service you provide. Or do you have connections that might help you arrange a special event to entice investors?
Simply try and identify what investors might want and which option will cost you the least.
Arrange a webinar
The best way to answer investor questions is in person. You’re able to explain the opportunity in detail in a way that’s not possible via written communication. But as your proposal may attract hundreds of investors, it can be useful to speak to a group. This not only proves you’re open to scrutiny – you’ll also avoid having to repeatedly answer the same questions.
While an event might seem ideal, it requires a whole lot of planning, cost, and logistics. There’s no guarantee that investors will be able to make it, and whichever location you choose will exclude some investors.
This is why webinars are the best solution. Even those who can’t make the live broadcast can send in questions in advance, and you can record the event (with permission) and share it with those who missed it.
Plan your webinar early during your campaign, hold it around the halfway point, and publicise it on Eventbrite (or similar), your campaign page and all other digital channels relatively early on.
Launch a PR campaign
Making a splash in the media can make an amazing difference to your campaign. It promotes your business as well as yourself as an expert in your field and informs potential investors about your market – making the money you spend three times as effective.
Hiring a professional PR agency is the best way to get some media traction, albeit one with an additional cost. Agencies come with an array of media contacts and usually a strong reputation amongst journalists for giving them good stories.
Self-promotional articles are unlikely to be picked up by reporters, however. They need a newsworthy angle, stats, strong research, and clarity of why the issue is important. Journalists don’t care that you're crowdfunding ‒ with so many companies doing so, it’s simply not news. Any mention of your company should also include others in your market as examples.
A boilerplate with more details about your company, crowdfunding campaign and relevant links can be included in the article’s footer. Target publications relevant to your industry, offering free, expert content and they’ll likely publish your article, giving your campaign an extra boost.
Think of these actions as your own small investments. Be proactive, judge your actions well, and you should be able to stand head and shoulders above the average campaign!