5 Steps To Creating A Record-Breaking Crowdfunding Campaign

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Earlier this year Oppo, a healthy yet indulgent ice cream brand, secured £350k of funding to support business growth. Taking to crowdfunding site Seedrs, co-founders Charlie and Harry Thuillier surpassed their £150,000 target within hours, closed with £350,000, and gained 550 new investors including sports personality Andy Murray.

Like Oppo, for many wellness brands, crowdfunding is now a recognised and highly attractive fundraising model.

Sites like Crowdcube, the world’s first equity funding platform, help raise millions of pounds every year, bringing both new and established brand’s innovative ideas to life.

Making it simple for anyone to invest in businesses, many of which have the support of top accelerators, corporates and brands, not only does crowdfunding raise capital, it can also boost a brand’s profile. But launching a crowdfunding campaign doesn’t guarantee success.

While thousands of campaigns reach or exceed their targets, a high number fall short. So, what does it take to successfully fund a project?

With two lucrative crowdfunding campaigns under his belt, co-founder of Oppo Charlie Thuillier reveals his experience of exactly what it takes:

We’d been preparing for months and we were confident, but we were also feeling very nervous as we pushed the live button.

This was the second time we had crowdfunded. In January 2015 we’d completed our first investment round via crowdfunding through Seedrs, our target a ground total of £100,000.

We’d never done anything like it before, and with just a few months’ worth of sales there was no way of telling how it would go. But the support was fantastic, and we became the fastest ever food and drink company to reach target through crowdfunding, doing so in a matter of minutes.

Now we were going for our second round investment, again through Seedrs.

We’d achieved an awful lot in the intervening 13 months, exceeding what we’d planned to accomplish. Increasing distribution by 10 times, hitting all revenue targets and being crowned Guardian’s Startup of the Year.

Investors were now investing in an established business which was beginning to show its potential. But this doesn’t change the fact that crowdfunding is a completely public process and failure to hit our investment would also be very public.

Similarly, successful companies were and are struggling to reach their required investment, so we worked hard to build momentum before going live, and again we were thrilled to complete another successful and fast raise.

We hit our target of £150,000 within four hours and overfunded to £350,000 within five days.

5 Steps To Creating A Record-Breaking Crowdfunding Campaign

Image: Oppo Trio Sky

Here are the five elements we recommend you follow in order to not only achieve your investment but also to make the most of the crowdfunding process.

1. Have a product that people understand

Nobody will invest in your business if they don’t think you have a fantastic product that people want and need, at a price they are willing to pay. Your pitch needs to explain simply what it is that you do and how that benefits other people. Crowdfunding investors buy into a product or service they would want to purchase themselves. If they don’t understand your business, or if it’s very niche, they are unlikely to invest.

But more than the product, they’re investing in you and your team, so make sure your personality, passion and credentials come across, particularly in the video. We invested an awful lot of time and effort in the video – it is the best and most personal way of getting your key messages across to your potential investors. It’s also important to be unique. Your story is one vehicle which allows you to do this and positions you as ready to build a fantastic business. Ultimately, give your investors a story they want to be a part of.

2. Attract your crowd

Crowdfunding is all about flock mentality. The more investors you have, the more investors you will attract. It’s like rolling a snowball down a hill; momentum is key. The hardest and most important part is to create a core of investors who have already bought into you. You can then start rolling the snowball and pick up some momentum from the first investments in order to build your campaign.

Here’s the process we followed:

Build a database of existing investors, interested individuals and potential influencers (people you may only tenuously know or not know at all, but whom you believe would be a valuable investor). You can do this by emailing your contacts and getting them to sign up to a list to pre-register their interest in buying shares in your company.

You can also use popups on your website and social media to build the list and then start providing recipients with information so that they’re raring to go. Together with your friends, family and other close contacts, investments from this source should represent at least 30 per cent of your target.

Put the campaign into ‘soft launch’ so that those with the link can view it, but the rest of the public cannot.

Next, invite your pre-registered prospective shareholders to invest. Once you’re at 30 per cent of target or above, then you can release it to the public.

You can have the best business plan ever, but until you reach around 30 per cent of your target, most won’t invest in you because it will appear that you don’t have support from your core followers.

Communicate with your potential and confirmed investors, and provide business announcements during the campaign. If people can see evidence of momentum (such as new sales or product innovations), it will create even more buzz. Use any hook you can to create PR during this period to attract more attention – crowdfunding is popular and simply announcing that you are crowdfunding may not be enough.

Set and agree the amount of investment that you will accept and don’t be afraid of turning people away who come in after this threshold. Keep them hungry for a future round of investment when hopefully you’ll be even more valuable.

3. Don’t stay behind your computer screen

You’re asking people to give you their hard earned money, therefore some investors will want to meet with you and determine for themselves if they trust you and your team to use their money wisely.

Be proactive and organise a simple event where people can join and put questions to you and your team, ideally the night before launch. If an event is impractical then at least make yourself very available for investors to meet.

4. Be fair – don’t over value your business

This is as much social responsibility as ensuring success. The small investors tend to rely on the big guys to do the due diligence on your company.

It isn’t fair to over inflate the value of your company, it will annoy investors and erode any sense of belief they have in you.

Be clear when answering questions as to how you have valued the business, and avoid over promising. Crowdfunding is so accessible now that anyone can make an investment. You have a responsibility to ensure that they realise the value of their investment can go down as well as up.

5. Use your new contacts and turn them into brand ambassadors

Part of the reason we decided against VC investment at this stage was down to the marketing impact of crowdfunding.

We now have 758 individual investors who believe in our mission and have a direct interest in helping us spread the word and achieve our goals.

It’s an amazing opportunity to enable dozens of fans to own a stake in your business and they will therefore want to make it a success. So during the campaign and after (a regular investor newsletter is perfect), make sure you use your new contacts to help you – whether that’s helping to market your brand, provide advice, or even offer feedback on new ideas and products.

Good luck! As always, it’s all about showcasing your product and your team in the best possible way. You can then build a network of investors who will want to be part of your journey well after your campaign has completed.

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