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With over £480 million invested into over 700 funded deals and a 74% success rate, Seedrs is leading the way in the European equity crowdfunding market.
In this article, the crowdfunding experts at Seedrs provide some tips on how to make your equity crowdfunding campaign a success.
Things to consider before you raise
Valuation and how much you need to raise
Before your campaign goes live, make sure that the opportunity to invest in your business is clearly laid out to investors and that any statements on your business or product can be backed up with evidence.
A crucial first step is to set a valuation for your business and decide what percentage of equity you are willing to give away to investors in exchange for capital.
Next, think about how much capital you will need to raise – this will depend on what level of growth you want your business to go through.
Once your campaign is accepted, get your pitch ready to be presented to potential investors. The following points should be covered to ensure you are selling your business and vision in the best possible way:
- The achievements your brand has had.
- Growth plans for the future.
- Your company’s mission and values.
- The people that make your company.
- Insight into the founders and what drove the creation of your business.
- Why you think your business has longevity and it’s a good investment opportunity.
It’s a good idea to include all this information in both the pitch deck and the video so that it can be broadcast to investors on the platform throughout your campaign.
Raising awareness of your upcoming campaign
The sooner you start marketing your upcoming campaign the better as you can increase awareness in your campaign and activate the people you want to invest in your brand. Crowdfunding campaigns usually run for around 60 days, so you need to make sure you are fully prepared for raising awareness and maintaining momentum throughout the duration of this.
Your personal network will also play an important role in building momentum in your campaign and can help you gauge whether “the crowd” are likely to invest in your campaign. Ensuring you have taken the right steps before your campaign goes live can arguably be the deciding factor on if a campaign will succeed.
Your campaign’s live – time for action!
Your campaign is now publicly viewable and the platform will begin marketing the opportunity to invest to its’ user base, but your work doesn’t stop here. You will need to continue raising awareness to your existing audience and stay front of mind. Make sure you’re informing your audience of key milestones and key updates through digital marketing, email or by leveraging PR.
Note: There are limits on what you can and can’t say to your audience to stay in line with Financial Regulations – your crowdfunding platform will be able to guide you on best practice for this.
Congratulations you’ve succeeded! Now what?
You may hit your funding target before your campaign closes, which means you have two options:
- close your campaign early with the full investment amount, or
- keep your campaign open in the hopes of getting more investment into your campaign – remember that by accepting more investment you may need to part with more equity in your company.
Once you have hit your funding target and closed your campaign, you will need to complete the final steps of the transaction before receiving the funds. This will involve passing legal due diligence and the completion of subscription agreements and articles. Once all of this has been completed then the platform will release the funds to you for you to complete the next phase of your business plan.
It is important to remember to keep your investors up to date with any progress that your company makes in the months after your raise – at a minimum, this should be quarterly. After all, you may need to raise capital in the future and need to call on this group of shareholders again to invest their money into your company, making the first steps of the process significantly easier the next time round.
This is just an overview on the steps involved in making a crowdfunding campaign a success.
If you think that equity crowdfunding is the right route for your business, check if you’re ready to raise on Seedrs.
This article is produced in a collaboration with Seedrs. Read more about our partnering opportunities.