Whether you’re an early-stage startup or in the growth phase, we know that capital is important for you. Working capital is the one thing startups need to outgrow the startup phase and become a full-fledged business.
While there are quite a few ways to obtain funds for your company, one of the increasingly popular ones is equity crowdfunding.
It’s how US-based startups can raise capital from unaccredited investors globally. This new yet well-established way of gaining capital can help startups no matter what stage they are at.
However, to successfully raise meaningful capital with equity crowdfunding, you need to run a campaign, which involves strategizing. Let’s see a few tips on succeeding with your equity crowdfunding.
Create Campaigns Around Investors
Identify your ideal investor profile to build and captivate a targeted audience. Having a feel for the kind of investor who’d be right to invest in your company is helpful knowledge before designing your equity crowdfunding campaign.
Create investor-focused messaging for paid ads, campaign landing pages and emails. Focus on your growth trajectory and vision for your company more than you do on your product. Here are a few pointers to think about from the POV of your investors-
- Your customer acquisition to lifetime value ratio
- The business relationships you’ve secured that will positively impact your growth
- Your projected revenue
- Your plan for hitting the projected revenue number
Get your Online Act Together
Equity crowdfunding can get doubly tricky with a broken or ill-functioning online presence. Marketing your crowdfunding campaign is no different than selling a product. Give your online presence a redesign and reshaping if needed.
Your website may well be the primary source of information for investors and a conversion channel for you. Lead investors through the offering process with an attractive design, clear copy and a positive customer experience. Focus on the landing page for your online offering to attract and convert potential investors.
Build and Warm-up an Audience
If you don’t have an audience already, start building and priming one. Equity crowdfunding usually requires some form of direct marketing. So, either a healthy social media following or a database of prospective investors is key.
If such an audience is missing, the next best idea is to run Facebook advertising or Google AdWords campaigns to bring your ideal investor profile to your landing page. Build a strategy for this outreach and follow it diligently.
Segment your audience beforehand and prime them up by marketing specific parts of your business to particular segments, depending on what they may want to hear about you.
Decide on a Realistic Valuation
Having a realistic target for the campaign is vital. If you get it right, investors will recognize a good deal and invest money in your business. Setting it too high may turn off investors, and you may not achieve your investment acquisition objectives.
While there’s no one formula to calculate the valuation of your startup, ideally, you should raise the amount you need to move to the next step of your business plan and a little bit extra for unexpected costs.
Remember, if you ask for too little, you may need to plan another raise. Also, know that since this is an all-or-nothing process, if you don’t meet your minimum investment goal, your campaign won’t succeed.
Market your Campaign Uniquely
No two companies are the same and so aren’t any two crowdfunding campaigns. Be clear on your unique proposition and highlight that in your marketing and advertising. Your marketing strategy will not only inform your investors but also educate and inform other audiences about your company.
Clearly define the marketing materials that will form a part of your strategy. Break them down into pre-launch and launch-period marketing collateral. A pre-launch campaign will help you drum up interest and form a database of interested investors.
During the launch phase of the campaign, you can provide your list of first dibs on investing in your company before you go public with the offer.
Your equity crowdfunding video will factor into the outcome of your campaign. This video should impress your potential audience and turn them into investors by informing and educating them about your product, company and vision.
Outline your business plan, the journey you’ve made so far, your achievements and your vision and planning for the future. Highlight your unique selling points, introduce your team and demonstrate the potential in your product.
Of course, try to make this video not just informative but creative and engaging, too. Consider hiring a company that specializes in producing high-quality videos for pitching purposes.
Keep Investors Involved
Investors in your startup want to stay abreast of everything happening in the campaign. Keep them engaged via email and social media during as well as post the equity crowdfunding campaign. Be sure to keep your investors looped in when you hit crucial milestones in the crowdfunding campaign.
Are there additional features in your product that didn’t make it to the marketing campaign? Proactively communicate with your investors. Send them a video message thanking them for their support.
These steps will ensure you build a relationship with your investors no matter what the outcome of the campaign.
Making an equity crowdfunding campaign successful takes effort on all avenues. However, the result is a significant capital invested into your business that can take you to the next level. Follow the strategies given here to ensure campaign success.
Looking for actionable advice from crowdfunding experts? Reach out to us today.