The Secrets of Successful Crowdfunding Campaigns
As part of our drive to deliver bigger and better investment support services, we are delighted to announce our official partnership with Crowdcube, the UK’s largest investment crowdfunding platform.
To celebrate, we’ve put together a selection of handpicked tips and insider secrets on how to run a successful crowdfunding campaign.
Clearly Articulate Your Why
Whether you’re building a digital platform or shipping a physical product, you need to be able to clearly articulate why your business and your team is primed to deliver value back to investors or backers.
When assessing investment suitability here at Netsells, our team are always looking for evidence against the following criteria:
- Why is this the right person or team?
- Why is it the right time for this produce/service now?
- Why is the wider market ready for disruption or innovation?
- Why will the chosen business model succeed?
It’s also important to clearly communicate how your business will use the additional funds and how they will contribute to the underlying growth and profitability of the business.
If you can answer all of the above and clearly communicate this to your audience, you will be actively creating a compelling argument around why your business is investment ready.
Develop a Comprehensive Launch Plan
“For us preparation was the key. Crowdfunding presents massive and well documented opportunities for start ups but on the flip side there's also the risk of very public failure.
We did everything we could to mitigate risk and increase our chances of success up front. We spoke to a number of crowdfunding platforms in detail, meeting with them, discussing rates, strategy and process. Simultaneously we spoke to other founders who'd raised through crowdfunding and learnt from their successes and failures.
By the time we made the decision to raise with Crowdcube we already had a detailed knowledge of their platform and how to get the most out of it. Using what we learned, we mapped out a detailed comms strategy from pre-launch through to close which gave us the comfort to believe we could react to the campaign in-flight. In our case, we reached our target and went into 'overfunding' within a day which is where you want to be.
The sooner you can get into over funding the sooner the dynamic changes and momentum becomes a powerful tool for your campaign.
My advice would be to ensure you have a well thought out plan so that if your campaign starts flying you are ready to take full advantage and if things are moving more slowly you've got a strategy in place to boost your position and inject life back into the campaign - momentum is key.”
Tom Sheppey, Founder of HealthPOD which raised £118,000 (236% of target) on Crowdcube in 2019
Understand Your Audience and Channels
While many companies have already built up an audience prior to launching their crowdfunding campaign, it’s still possible to successfully raise without a massive list of email subscribers or social media followers.
The first step is to understand your ideal audience and the common characteristics of people who are most likely to back or invest in your business.
For example, if you’re launching a HealthTech business, your ideal audience might be investors who have prior experience in the health and fitness industry. They also may have backed similar products or services in the past, or have worked at or held non-exec titles at companies similar to yours.
From this understanding, you can then select the channels that your ideal audience will be best reached on, alongside the appropriate messaging that will entice potential backers to find out more.
For example, if you’re crowdfunding for a B2B FinTech Platform, you may be best served by focusing on LinkedIn and building an email list.
For B2C product-based companies targeting a young demographic, you may find that Instagram or even emerging channels such as TikTok might be better suited to reaching your intended audience.
Once you’ve researched and selected your channels, the key to growing and nurturing your audience is consistency in both messaging and delivery of timely updates.
"When it comes to crowdfunding, the most important thing is having an audience of people who love what you’re doing, want to go on your business growth journey with you and in turn are benefitting from their investment whether it be with equity or rewards that offer a great deal."
Sarah Cowl, Marketing Director, The Rainbow Mash, who helped Brew York in 2018 raise £56k (141% of target) on Crowdfunder in 21 days
Build a Community
Developing a meaningful community around a brand has always been an important part of growing any business. Humans are social animals, drawn to engaging stories and groups of likeminded people.
When crowdfunding, developing a community boils down to creating an authentic, long-lasting connection between your brand and audience. Don’t be afraid to share you story, ask for feedback and interact with potential customers or investors.
This can be done entirely through digital channels such as social media. The key is to have a clear plan for how you're going to nurture and support your community as it grows.
"At Crowdcube we believe the key to a successful crowdfunding round is the ability to rally your community. As with many of the businesses we've raised with, our shareholders are our biggest advocates and brand heroes. Community is the beating heart of any business, so communicating with them in the right way, at the right time is essential."
Luke Lang, CMO and Co-founder, Crowdcube
Looking for further advice on getting your product or platform ready for a successful crowdfunding campaign?
Get in touch with our team via email or phone.