Top Tips for Crowdfunding Success
CrowdLords is just one of many new start-ups in the UK that are utilising the power of the crowd to help finance their future.
Typically over the years most businesses have sought the help of banks in order to secure the funding of future expansion and development. However alternative methods of finance such as crowdfunding (equity, debt & reward based) are helping to revolutionise the funding of small businesses in their early stages of development by harnessing the power of the crowd.
As a new company starting out we decided to explore the route of equity crowdfunding in order to help us reach a wider audience and evaluate the type of interest and demand for our business concept . We chose to raise the funds we needed with the help of crowdfunding platform, Seedrs. After just over 2 weeks of our crowdfunding campaign being live to the public we surpassed the £90K target and went into overfunding, reaching £140K in October of last year. Thanks to the enthusiasm and support of the crowd and all our investors, we decided to go for a second round of crowdfunding. Our campaign is currently live on Seedrs and seeking a funding target of £200K. Check it out https://www.seedrs.com/startups/crowdlords1
Equity crowdfunding in particular has seen a UK market growth of an astounding 420% in the last year. Therefore it is no surprise that the crowdfunding platforms such as Seedrs, Crowdcube and Kickstarter have seen a significant influx in the number of individuals and businesses seeking the help of the crowd.
Creating a successful crowdfunding campaign can be a challenging yet rewarding process. If you are a new business thinking of going down the route of crowdfunding here is some essential advice that we can offer you based on our experience and the top tips you need to make your crowdfunding campaign a success.
Build Your Network
Having the right network in place is crucial to the success of your campaign. Advertising the fact you are seeking investment will help to bring attention to the company and help to build a pool of traditional investors before launching. It is also important that as a business you exploit your own personal networks, utilising family and friend connections to help spread the word. The bigger and more diverse your network will only help to increase your pool of potential investors. Building relationships with your potential investors and influencers is key to the success and level of attention your will receive. Social media platforms can be useful in helping you to build up the right kind of following. Twitter, Facebook, LinkedIn and Google+ are great channels for you to update your connections on business developments and progress. Seeking the help of bloggers and newspapers is also an excellent way for businesses to increase their audience and help spread the word of their upcoming crowdfunding campaign.
Choose Your Platform
As previously mentioned there are a number of crowdundingplatforms to choose from: Seedrs, CrowdCube, Kickstarter, Indiegogo etc. Doing your homework is crucial. Therefore it is recommended that you research into the types of audiences that the different platforms attract, the kind of audience you want to reach, as well as audience size and type of funding. Also investigate the types of businesses currently using the platforms and where investors are putting their money, therefore you will be able to work out if your business would be suited to the platforms audience.
Story Telling: The Team
Parting with ones money is never easy therefore it is no surprise that more often than not investors are more interested in finding out more about the people behind the business idea. Investors are more likely to invest in the individuals themselves knowing that their investment is safe and supported by the values and goals of the team and business as a whole. Therefore it is recommended that you share with them the “eureka” moment of your business idea, your passions, your drive for future success and goals of the business. They want to be reassured that they are investing in the right team, showing you have the enthusiasm and drive to turn a business into a financial success. Creating a video can be a powerful way of illustrating this. You can find a copy of ours on our main homepage
Implementing advertising & marketing Tactics
During your crowdfunding campaign it is essential that you maintain and nurture your relationships and connections. As previously mentioned social media channels such as Twitter and Facebook can be a great marketing tool for this, if used correctly. It would be foolish to assume that one message will suit all; therefore it is recommended that you segment your market and use social media to target them specifically. For example an idea used by CrowdLords is to have members of the team utilise separate Twitter accounts that can be used to communicate and connect with different market segments. Thus expanding your overall market reach and on a more personal level. Other forms of effective advertising include a video as previously mentioned as well as attendance at networking & public speaking events, podcasts and interviews.
Keeping Your Crowd Updated
It is important to make sure that all that hard work does not go to waste, and keeping the attention of your audience is key. Even after investment you should continue to communicate with your investors by providing regular updates on the business, showing them their money at work. E-newsletters are an effective method of doing this and help to provide an open flow of communication between your business and your investors.
I can’t stress enough the importance of doing your research ahead of time and making all the right preparations as discussed for the success of your crowdfunding campaign. Monitor it closely and keep connected with your audience. But most of all.....don’t forget to enjoy the process. Crowdfunding is an exciting adventure and can open up a lot of doors for your business in the future.
Wish you all the best of luck!
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