Crowdfund

4 steps to make your crowdfunding campaign stand out

By John Auckland, TribeFirst

Banks and other traditional funding sources are now being bypassed, as early and growth stage businesses opt for equity crowdfunding. Its popularity however, has led equity crowdfunding platforms, such as Crowdcube and Seedrs, to become saturated ‒ there are now hundreds of active campaigns at any one time. And, as each campaign had to pass the platforms’ own strict due diligence process before it could get listed, you know each will have a compelling proposition.

Such a large selection of strong campaigns makes it difficult to cut through the noise. So, how can small, early-stage companies compete and win over investors?

1. Offer unique rewards

Crowdfunding platforms, in the early days, used to rely on contributors donating in order to receive a reward ‒ often a product the company wanted to produce, but also experiences and other unique opportunities. While these campaigns are reserved for the likes of Kickstarter and Indiegogo, equity crowdfunding campaigns can still utilise the same principle: offer people something unique and they will contribute.

A great idea is to offer rewards at specific levels of contribution and make the contribution amount an odd number. For example, offering an invite to an exclusive event for those contributing £1,700 or more. Entrepreneurs often feel compelled to put these perks at nice round numbers, like £1,500 or more, but investors will usually contribute a round number anyway and the point of perks is to encourage slightly higher investment amounts.

One of the best things about rewards is they don’t have to cost a fortune. In fact, quite the opposite: if you spent lots of money on rewards you may put investors off with your frivolous spending. As an example of a low-cost yet effective perk, one of our clients, NextUp Comedy, offered investors membership subscriptions to their platform as a reward, helping the company raise 123% of their target amount. If someone invested just £100, they would save £42 on their first year’s subscription. Great savings for engaged investors but next to free for the company to offer. It’s a win-win! And since the product is unique, there is no competition.

Action:

Consider what makes your business unique.

Do you have an original product or service? Perhaps you are connected with some influential or famous people?

Identify your options and consider which are feasible and realistic, which investors might want, and which will cost you the least.

Ideal perks provide investors with additional value or an experience that money can’t buy.

2. Video

Pitch videos are essential as they quickly communicate the key aspects of your pitch, get across the look and feel of your brand, and provide that important human connection. Getting your pitch video right, however, is a much more complex task.

Knowing how important your pitch video is, it is tempting to spend a lot of money on it. Investors, however, might see the expensive animation or glossy production as a frivolous use of money for a startup. The good news is that you can make a pitch video look great without remortgaging your house. In fact, often the best videos are the ones that turn on the creativity rather than turn up the production value.

A good example is Gunna Drinks, which is taking on the big soft drinks manufacturers primarily using its brand. Therefore, they needed to communicate the brand, first and foremost, then their key investor messages. Combining an engaging script with some charismatic presenting and some incredible editing, Gunna produced a pitch video that was on brand, sold the investment more than the product, and gave real insight into the founding team and their personalities.

Action:

Consider your brand and core selling proposition. Are you big and bold or subtle and sophisticated? Are you selling a product or service? What are the key benefits or differentiators of your business?

Then consider what investors want/need to know. Is it the size of your market? A gap you’ve identified? Perhaps you have some high-profile investors?

Finally, work with a production company to pin down how you are communicating what. With this clear in your mind, it should be possible to find low-cost ways to create an eye-catching video.

3. Host an interactive investors webinar

Investors often have questions and welcome the opportunity to ask them. Just take a look at the Q&A or forum section of any crowdfunding platform. Written questions and answers can unfortunately often be misinterpreted or can miss the point. Clarifying can then get complicated and confusing. A much better way to answer questions and address concerns is in person. The best way is to answer everyone’s questions at the same time, helping to avoid duplication and allowing investors to learn from one another.

Hosting an investor event is often one of the first ideas that come to entrepreneurs. It makes sense ‒ gather your potential investors in one place, let them meet the founders, and address any questions or concerns in a live setting. However, events are expensive and require a lot of organisation. As such, you assume a lot of risk hosting an event. What if most people can’t make the date? Does a London event exclude Northern and Scottish investors? How many resources are you diverting away from other business and marketing activities to organise the event?

Even if your business allows you to organise and host a spectacular event at low cost, investors may still see it as a frivolous expense and withdraw their investment. One company recently held a big party to celebrate hitting its crowdfunding target. As the business was involved in the events industry, the team leveraged all their personal contacts to ensure that the event cost them next to nothing. However, they did such a good job of making the event look like a lavish affair, one investor ended up pulling their £30k investment.

We’ve found that a well-planned webinar can achieve the same result of informing potential investors and allowing them to meet the founders. The best time to run a webinar is around the middle of your campaign. Potential investors will have had time to read your proposition and investigate the market, and you should have received over 50% of your funding target by that point.

Simply set up an Eventbrite page with a summary of the webinar content along with the date and time, then share the page with your social media followers, LinkedIn connections, personal connections, as an update on your campaign page, and anywhere else you can think of.

Action:

Plan your event at the very start of your campaign for around the middle of your campaign and publicise it using an Eventbrite (or similar) page relatively early on.

Then take note of the questions investors ask during the first half of your campaign and build the webinar to address these concerns.

Finally, make sure there is plenty of time for questions at the end of the webinar. Never make things up ‒ if you don’t know, say you’ll check and provide a more detailed answer.

Bonus tip: Record the webinar and send it out as a campaign update.

4. Hire a professional PR agency

Engaging a professional PR agency will likely to be one of the more expensive options on this list, but the difference it makes can be astounding. An experienced PR agency comes with a list of journalist contacts as well as established relationships. Additionally, every pound spent on PR works twice as hard ‒ raising brand awareness and gaining you investors in one go ‒ getting twice as much bang for your buck.

The benefits of good PR coverage is threefold:

It spreads awareness of your business,
It positions you as an expert in your field,
It can help educate potential investors about your market.

Startups and early-stage businesses usually aren’t well-known and any ‘expertise’ is often spread across the whole team. PR coverage flips the script, positioning the founder as a thought-leader with unique insight and your company as one worth investigating.

The ‘trick’ to good PR coverage, counterintuitively perhaps, is not to make it promotional. If you mention your company in the main body of the article, it should be as an example only and the article should also contain other businesses as examples. The reason is, journalists don’t care about your business or that you are crowdfunding. Sorry to break it to you, but you’re not a newsworthy story…yet.

Most publications want to educate and inform their readership by offering expert advice and insight. Offer them some expert content for free and they’re fairly likely to publish your article. As long as you include a bio and summary of your business, you’ll end up with a nice little byline next to your article title and promotion of your business in the footer. Perhaps this may not feel like enough to draw in investors, but trust me, it works.

Actions:

Consider what advice or expertise you could offer that’s related to your business. What might others want to know? What might they need to know in order to want to invest? Do you have a unique story you can offer?

Then pin down 2-3 articles to go out during your crowdfunding campaign. Do some research, discover some statistics to back up your claims (and reference them), and find other businesses that exemplify your claims. Write articles around 1,000 words in length around these titles, remembering to include: an author bio, a company description, social media links, and a link to your crowdfunding campaign URL. Then hire a professional PR agency to distribute them throughout your campaign.

By following the four cost-effective steps and activities listed above during your crowdfunding campaign, you could spend as little as £2,000 to publicise it. In our extensive experience running equity crowdfunding campaigns, that £2,000 will result in an extra 20% or so of campaign funding. Even for campaigns at the smaller end of the scale (<£150,000) that could work out to as much as £30,000 in additional investment.

A small investment in your campaign can create a big impact in the investment you gain!

ABOUT THE AUTHOR

John Auckland is a crowdfunding specialist and founder of TribeFirst, a global equity crowdfunding communications agency that has helped raise in excess of £17m for over 50 companies on major equity crowdfunding platforms, with a greater than 90% success rate. TribeFirst is the world’s first dedicated marketing communications agency to support equity crowdfunding campaigns and the first in the UK to provide PR and Marketing campaigns on a mainly risk/reward basis. John is also Virgin StartUp’s crowdfunding trainer and consultant, helping them to run branded workshops, webinars and programmes on crowdfunding. John is passionate about working with start-ups and sees crowdfunding as more than just raising funds; it’s an opportunity to build a loyal tribe of lifelong customers.

See: http://www.tribefirst.co.uk

Twitter: @Tribe1st