Crowdfunding - How to make it really work for your startupFeb 22, 2021
By Rob Stross
In 2019 WeSwap ran a record-breaking crowdfunding campaign. Looking back, it was seriously hard work but hugely effective and a vital part of our growth plans – we raised a whopping £2.3m from over 3000 investors. Here’s some reflections on what worked for us from a marketing perspective and how we achieved this fantastic milestone
Get the experts involved
We went for Seedrs as our partners, they suited us down perfectly, but do your due diligence. Different platforms offer very different financial products. Which platform you choose will largely depend on what you can offer potential backers in return for their investment, be this a tangible reward or perk (e.g. reward-based crowdfunding), a share in your project and a potential financial return (e.g. equity-based crowdfunding or Community Shares) or simply the warm glow associated with doing something good (e.g. donation-based crowdfunding). Compare similar brands in similar sectors to see what works
Pre event launch
Your crowdfunding partner will more than likely have a space you can use for a pre-launch event. We did a simple drinks evening where potential investors could meet and greet the founders and ask questions informally. This worked a treat to really engage with investors and help them to get to know the business.
How you start will more than likely define how you succeed. If you start slowly you will struggle to regain momentum. Build anticipation however you can. At WeSwap as we already had a big loyal userbase we could really leverage existing users and run a launch countdown and an incentive to commit funds early. The sooner the bar starts moving towards 100% the sooner more and more people will want a piece of the action. If you can get other investors to commit before launch and start the bar moving straight away even better.
Your Crowdfunding Video
The most important piece of marketing collateral will undoubtedly be your video. Spend time getting this right, getting the right partner and crafting the script so investors can clearly see where you have come from and where you are heading. Share who you are and the team behind the business as much as you can and why you’re passionate about it. Investors need to know why they should believe in your company, the founders and broader team. Be honest and transparent – show them why you are investible now. Also think about how you can slice and dice your video to generate some shorter form content for use on other social media channels
Your agency will support you – make sure you are very clear on how they will also promote to their userbase and how this will complement and support your own marketing. Seedrs supported this but we had to spend time to really clarify exactly what they were going to do and how this would complement our existing marketing
It’s always a good idea to give something else away if you can afford it to clinch the deal. We thought long about what incentives to offer users for who crowdfunded. Free Swaps, merchandise, exclusive event access. We tried a lot of things – the one that that really worked for us was an exclusive Investor Card: 'WeSwap u loved it'. Different colour, kudos, credibility, and a real sense of exclusivity. Plan this carefully, ask beforehand and the cheaper, more creative ideas may actually really drive the numbers.
This is huge and will require clear ownership. With over 3000 investors to manage at WeSwap it became pretty much a full-time job. Be very clear about who is responsible for this and make sure they have enough time to manage this properly. Be responsive: If you have documents that are only available on request, make sure you don’t keep investors waiting. Plan ahead on how you’ll manage out of hours requests.
Answer questions promptly: Your potential investors will have a lot of questions and the best way to manage these is by answering honestly and transparently. If you don’t know the answer, tell them you’ll be back soon with a reply. We used pre-prepared FAQ’s. Being reactive and honest will show your investors that you’re focused, which helps to build credibility and trust.
Keep your cool: It’s not uncommon for some investors to post provocative questions or statements. Your instinct might be to go on the defensive or panic, so take a step back before replying. The last thing you want is for your campaign to turn into a heated argument in public view.
And finally make sure you celebrate your wins. It can be a great team building exercise if a bit fraught at times but keep calm, carry on, and take the time to celebrate in style as a team at the end of your campaign. We certainly did