KEY ELEMENTS TO SUCCEED IN CROWDFUNDING
Crowdfunding has grown over the last few years to become one the most popular methods of raising money for businesses. However, what exactly is the key of running a successful crowdfunding campaign? So, what are the criteria of being allowed to join one of these coveted platforms? Many business owners, who want to take part in this practice, often have a lot of questions. To help answering these, we invited four well-known UK based crowdfunding platforms – Crowdcube, Crowd for Angels, Envestors and Invesdor, to come and present their respective platforms and give entrepreneurs a chance to speak to each one of them.
We have brought together the key elements from yesterday’s event:
1. PRESENT YOUR PITCH LIKE A STORY
Andrew Adcock (Chief Marketing Officer) from Crowd for Angels
Crowd for Angels, authorised and regulated by the FCA platform offers equity & debt crowdfunding. Andrew Adcock shared that their average investor is 47, Male and likes rugby. Interestingly, only 7 in 100 applications make it on to their platform. Andrew gave some examples on why applications typically don’t succeed. Often this is due to the lack of accounts, badly written business plan and/or inflexibility.
According to Crowd for Angels, the key to success lies in building a great pitch. It should be presented as a story – information should be broken into blocks, so it becomes relevant and simple. Using images and highlighting key points will ensure understanding by all investors.
2. MAKE YOUR INVESTORS YOUR BRAND AMBASSADORS
HENRIK OTTOSSON (Country Manager) at Invesdor
Invesdor helps companies in raising funding and growing brand awareness. Their motto says “Finance, let’s dance”. Henrik Ottosson believes planning an attracting marketing campaign is vital. A successful campaign helps to create the awareness for your offering, builds traffic, engages investors and converts them into investments.
Invesdor also encourages you to transform your investors into brand ambassadors. You must involve them in your business and ask them to talk about your business to their friends and families.
3. ASK FOR THE RIGHT AMOUNT OF MONEY
Robert Gordon (Investment Manager) at Envestors
Based in London, Dubai & Jersey, Envestors is 3-time winner of “Private Investor Network of the Year”. They have over 3000 investors and £103 million worth of investments closed last year. Envestors describe themselves as being ‘’Sophisticated investors’’, meaning they seek investors invest a minimum of £25,000 in companies seeking £500,000 to £10,000,000.
Robert Gordon discusses the 4 S’s their company offers – Sophisticated investors, Smart Money, Sensible valuations and Serious companies. Envestors also emphasize on how the role of investors within your business doesn’t end after you receive funding. You should share the same vision with the investor and you are happy to have them on board on your journey.
4. MAKE YOUR CUSTOMERS YOUR INVESTORS
MEGAN REYNOLDS (EQUITY FUNDRAISING MANAGER) at Crowdcube
Megan Reynolds shares the journey of crowdfunding. When Crowdcube launched 5 years ago, the first fundraising raised £75000 in 5 months and now that crowdfunding is gaining popularity, companies like Monzo are able to raise £1 million worth of funds in 96 seconds! This truly shows the evolvement of crowdfunding.
With over £240 million invested, 520 successful raises and over 390,000 registered investors, Crowdcube is one of the UK’s leading equity crowdfunding platforms. Megan expresses the key to success in raising funds via crowdfunding as ‘The Sweet Spot’ – the common audience between the Crowdcube crowd, your own crowd and the customers of your business as your customers already love your product.
Remarkably, female investors contribute to 27% of the investors on Crowdcube. Megan also shared the highest transaction on Crowdcube was £1 million from an iPhone at midnight!
The benefits of crowdfunding are much more than just funding for your company. It delivers:
✓ Efficient Legals
Summary: The Crowdfunding Workshop was a great opportunity for entrepreneurs to meet with Crowdfunding companies and learn about the process, techniques, do’s & don’ts of raising money via crowdfunding. The key points we learnt during the workshop were that crowdfunding can work well if you’ve a sensitive product and would like to gain publicity. The video is a key element of your pitch and businesses must make it interesting & appealing for the male audience as they are the higher contributing percentage of investors.
Like what you learnt? Join us for our next event “Scaling Up to Growth” Conference on May 23rd to meet over 20 top leading industry experts and learn about growth opportunities to scale up your business http://bit.ly/2oD0dcA