In this article, I will discuss seven essential steps to prepare your equity crowdfunding campaign. In my experience, the most crucial stage of a crowdfunding campaign is the pre-campaign. During this time, you should lay out a very slick plan. The campaign will only run for a short period, and there will not be time for significant changes in strategy.
Assuming your company is ready for equity crowdfunding (ideally with a scalable MVP launched and with traction in a market with potential and with a credible team behind), here are the things you should be working on in the pre-campaign:
- Getting the basics right: start with the most important thing: getting the right crowdfunding team. Without clear roles and responsibilities assigned to reliable members, it’s quite unlikely you’ll be successful. Other things that would be interesting to start considering very early on is choosing the right platform (more in an upcoming article), understanding how they work (for example the figure of the nominee) and applying for SEIS/EIS (if you’re eligible) as it could take time!
- Making sure your network is behind you: you want at least a 30% of the money raised before going public, ideally more. This is because it’s been proven that your chances of success are much bigger if you have momentum, as it gives the pitch credibility. You should be tracking how much and how likely each person in your different circles is to invest. Talking to them is going to be one of the most time-consuming tasks while you prepare your equity crowdfunding campaign, so make sure you allocate enough time for it!
- Getting your brand spot on: most people think of the branding of a company as a logo and brand colours. But there’s so much more to it! From a clear brand discriminator, addressing consumer pains and gains (functional and emotional), to the tone of voice, personality traits and values. A very clear and distinct branding touching all these aspects will generate trust in your investors and will set you up for success. And don’t forget your (and your team’s) personal brands! A good LinkedIn profile and social media presence will also add credibility to your pitch.
- Building a killer pitch deck (and one pager): make sure you’re covering all of the aspects that an investor might be interested in. What’s the opportunity, what consumer need is addressing, what makes your solution unique, what competitors are operating in the market, how much do you need to raise and why, how are you valuing your company… Also, it’s important to note that investors will question every aspect of your pitch (starting inevitably with your alleged over-valuation), so make sure you have solid answers for each possible question.
- Getting your creative assets ready: a strong video laying out the who, what, how, why and when is crucial for the success of the campaign. But it’s not only that: your photographs, design on your web, and the look and feel of your pitch also contribute to the image you’re giving to your investors. Make sure everything is perfectly manicured.
- Laying out a detailed marketing plan: include online and offline channels. One of your best bets is email marketing. You’ll get a higher conversion rate there. Have a clear email plan. Social media will aid those conversions. But without a doubt, the most efficient way to get investors is face-to-face or on the phone. Make sure there is new news to share during the campaign. And, as I commented in the pan-European crowdfunding post, the platforms have triggers in which they alert their investors: use them wisely!
- Don’t forget the ‘small print’! There is going to be a fair amount of due diligence, mainly before launching and once the campaign closes. Don’t forget to factor that in. The platforms are FCA regulated and they will want you to comply with their rules (and rightly so!). One of the most notorious ones is that in any communications you’ll need to add the ‘Capital at risk’ tag. And also keep in mind that four-letter ‘word’: GDPR!
As you can see, there are many variables to take into account to prepare your equity crowdfunding campaign. It is my intention in this blog to share the detail for each one of these steps. Stay tuned! In the meanwhile, if you have any questions, please don’t hesitate to Contact me.