You’ve spent months jumping through hoops to complete an audit/review, draft your offering documents, setting up a campaign page, and respond to questions from compliance. Now your raise is live, but things aren’t moving. What do you do now?
1. Jump Start Your Raise
As I mentioned in my article What Founders Should Know Prior To Equity Crowdfunding – Part 2 – Ad Spend, no matter how you are raising capital via equity crowdfunding (ECF), you need something to kick start your raise. You may have the best looking deal page on a self-hosted solution (Dalmore, Dealmaker, Issuance, etc.) or a funding portal (WeFunder, Republic, StartEngine, etc.) but people aren’t just going to happen upon your raise and start to invest. You have to put fuel on the fire, and that normally means investing in advertising spend to kickstart the raise. Once you get things going on a raise, then it can become a snowball effect: the rich do get richer and social proof is a HUGE factor when raising capital through ECF. Your deal page will look a lot more attractive to new investors if it shows $50k raised than if it shows $5k raised. So before your launch your raise, have a plan (see below) and whether it’s through advertising, your network, or your customer list, hit the ground running and start strong!
2. A Plan
Never ever launch a CF without considering your plan for the raise. If you’re going to launch and figure out the end date and goals later, then you’ve already lost. Launch a raise and make sure you decide in advance how much you want to raise, when you need the cash, and how much you’re willing to spend on advertising. Then work backwards and plan the raise accordingly. Otherwise you’ll end up having a zombie raise and never reach your goals. I experienced this when overseeing a recent Reg A+ for Bobacino. The raise was basically breaking even on ad spend and seemed like it wasn’t going to have any success. The team then committed to a campaign end date, based on needs for the business. We then worked backwards and built a detailed plan and ended up breaking our expectations for amount raised and ad spend.
3. Story Telling
You may believe your Company has the best product / solution for the market, but remember, that doesn’t necessarily mean that story will resonate with the crowd. (I wrote an article covering this a few months ago). If your business is hard to understand, needs a few minutes (or more) to explain, or is simply boring, you may want to rethinking your fundraise’s landing page, ads, video, etc. Your Company’s product may actually be easy to understand, like Graze, a producer of commercial autonomous electric lawnmowers. While CFO of Graze, where I helped raise $18mm, we didn’t always have it easy. We launched our first raise on SeedInvest, but with a subpar video and marketing assets. Unhappy with performance, I hired a new creative agency, and we helped “bring sexy back” to the commercial landscaping business. Check out this brief explainer video by our creative partner to learn a bit more about what we did. Remember, the story you tell to the crowd is different than what you tell traditional investors.
4. Your Network
Stating the obvious here, but even if your Company’s email list is small and you don’t have a lot of social media followers, make sure you leverage them as a part of your raise. That includes having employees, investors, advisors also post and repost content to their lists. You never know who may invest. I recently had a client NOT do this, and then we came in and put together a plan to help promote the raise to their audience and community. This helped their raise grow more than 25%, without any ad spend.
5. Deal Terms
Finally, be thoughtful when you are setting the terms of your deal, including minimum investment, investor perks, bonus/discount shares, time-based bonuses, etc. A little can go along way. A small change (up or down) in minimum investment can have a meaningful impact on your round’s performance. We had two failed crowdfunds (yes two) for one of my previous companies; we were able to raise over $1mm on the 3rd attempt by following a number of the above pointers, plus we raised money via a priced round versus a SAFE/convertible note. One lesson we learned there: the typical equity crowdfunding investor prefers a share price over a valuation cap. Want to hear some good news? In some cases (especially for a Reg CF), you can change deal terms almost overnight.
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Atlas Rd specializes in guiding founders through the process of raising money via equity crowdfunding. We help oversee all facets of a campaign, including marketing, legal, regulatory/compliance, accounting, finance, and investor relations.
Interested in learning more about raising money online? Email us at info@atlas-rd.com.
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