10 Top Tips for Crowdfunding

Posted on by Clive Reffell
10 Top Tips for Crowdfunding

In my role as an independent crowdfunding adviser I attend many live pitching events and meet plenty of people who have run successful crowdfunding projects. My 10 Top Tips are based on many meetings and conversations with people working at crowdfunding platforms and with entrepreneurs who have run successful crowdfunding campaigns, mainly equity based and some donations-for-rewards projects. This is intended more for commercial enterprises than fundraising for worthy causes, though many aspects would still apply.

  1. Examine projects by other crowdfunding users in your business sector.
  2. Build your own networks of relevant people for as long as possible before going live. Every person you have ever met is a potential backer! This crowd-building includes making professional media contacts to ensure a good response to press releases in your local area and sent to relevant trade/business sectors.
  3. Thorough planning and preparation is vital. Decide on who (the types of people) you want to tell about your offer; create in advance what you’re going to tell them (the content); plan when to tell them (don’t overload demands on your own time by telling everyone all at once, stagger it); decide which communications channels to use – social media, PR to secure media coverage, meetings and events, content marketing, paid-for advertising. You might want to start getting media coverage months in advance to allow time for items to be published so you can refer to them in your crowdfunding pitch.
  4. Pre-sell to your closest contacts and supporters so that you can count on at least 30% of your funding target or pre-orders arriving in the first few days. This gives the project vital momentum and encourages other would-be backers to get off the fence. Also check for opportunities through your crowdfunding platform (when your project is accepted by one) to identify and contact backers in their network with a relevant investment/product history.
  5. Ensure you and your partners/support team (a team of people is important because most crowdfunding attempts by a sole individual fail) have appropriate social media skills, or have a budget to access some.
  6. Crowdfunding can be a fulltime role. Why wouldn’t it be? Success is possibly going to transform your life for the better. Organise your day job, maybe by taking on temporary support, so you have the time to answer questions, send out information, and personally meet prospective backers. Don’t forget – people invest in people, get out and meet some would-be equity investors or people who could place large orders.
  7. Set weekly targets to monitor progress and check that you are doing enough, and establish what’s working well and what isn’t. Change your plans based on your weekly assessments to do more of what’s working best.
  8. Make it easy for your backers to tell their own networks about your crowdfunding project, provide them with content to use by email and in various social media formats.
  9. Be flexible to accommodate other opportunities that may arise, such as offers of retail distribution or interest from an angel investor.
  10. Invest some time on your new backers because they could turn in to important brand ambassadors for your business.

In short, you will need:

  • soft ‘people skills’ and confidence to engage persuasively with potential backers;
  • an ability to segment audiences and identify key prospects;
  • skills to harness the power of the written word;
  • social media skills;
  • an easy-to-deliver and understand SMART business plan and financial projections (Specific, Measurable, Achievable, Realistic, Timetabled);
  • a budget to bring in extra help and any skills or capabilities you lack within your immediate team (such as video production, effective use of social media, writing press releases, organising events);
  • a campaign plan with KPIs to monitor progress;
  • and maybe a campaign manager to help you hold it all together and make it work, if you think you need one.

Or contact me, an independent crowdfunding adviser, at [email protected] or on 07788 784373. I can take you through a seven-stage assessment of your readiness to start crowdfunding and identify areas that ought to be strengthened before you go ahead. Then we can start planning how you will achieve success.

Four live crowdfunding pitches received a guarded response

Posted on by Clive Reffell

By independent crowdfunding adviser Clive Reffell.

Live crowdfunding events give entrepreneurs valuable opportunities to deliver their pitches and receive insightful feedback from an interested audience.

DSC_1361An enterprising accountant, Irfan Khalil, has formed a ‘Finance for Startups’ group of over 4,000 people who are interested in equity crowdfunding. Most fall in to one of these four categories:

  • they want to trade some equity for a cash investment in their business,
  • they are looking for investment opportunities,
  • they are at an early stage of considering using equity crowdfunding,
  • or like me they provide professional services that are useful to equity crowdfunders.

Irfan organises monthly meetings at a variety of London venues. There are slots for four or five entrepreneurs to pitch their business investment opportunity in just five minutes to four or five panellists. The panellists have five minutes to ask questions, and then a final five minutes to provide feedback on what they like, what they consider ought to be better thought through, and so on.

At the end of these ‘formal’ proceedings there is then about 45 minutes of networking for everyone there to exchange ideas, experiences and contacts. Each event has a very collaborative feel to it.

February’s event was in Camden. Four entrepreneurs pitched their opportunity to five panellists in front of over a hundred people.

The panel consisted of (r to l):

DSC_1378

  1. Peter Richards, a partner in Venture Pilot, which provides technology organisations with a scalable structure for growth;
  2. Amarjeet Hans, Director of Crystal Clear Business Consultants Ltd;
  3. Raimonda Junkanaite, an entrepreneur and early-stage business adviser who is setting up CrowdVelocity, a crowdfunding-for-donations platform;
  4. John Elsdon, Chairman of the management consultancy Allied Powers;
  5. Akeem Famuyiwa, an intellectual property specialist and an entrepreneur with a background in pharmaceutical science.

The four entrepreneurs and the opportunities they pitched to the panel and the audience were as follows.

DSC_1369.James Grant, founder of Weavee.co.uk. James is creating an app that connects job vacancies, recruiters and candidates seeking work. This is a competitive area, I have seen several crowdfunding pitches in the last few months based on apps for the job placement market. James was seeking £150,000 and believed this would be the only round of investment required before he started making a profit in the back half of Year One – subject to reaching a minimal critical mass of 10,000 registered job seekers and 100 recruitment consultants. Five job agencies are currently trialling the technology. .James had pitched three months before and the panellists agreed his pitch was getting tighter and he was coming across as more confident.

DSC_1371Next up was Julian Tremaud, founder and CEO of Fanteamz.co. “86% of viewers skip TV ads” he declared, as a way to start explaining that he will provide organisations with an opportunity to hire teams of brand ambassadors to deliver positive word-of-mouth campaigns. He has Spanish partners and they already have successful case histories from South America, particularly in the music concert and festival sector. Julian is seeking £250,000 for 20% equity, and forecasts £21m profit by the end of Year Three.

The panel advised Julian to be better able to explain how the company valuation figure was reached. Another suggestion was try a round of donations crowdfunding before an equity deal.

DSC_1373Third pitch was from James Parker from Instaload. One third of all US truck mileage is with empty vehicles. Freight bookings go through expensive brokers, often at short notice that leaves the drivers stuck with no loads to pick up at their destination to then take on to somewhere else. The growers and manufacturers with goods to shift sometimes never meet or speak to the truckers who deliver their products. To address these factors, Instaload are developing an app that will provide a direct interface between the people with products that need transporting with the smaller truck companies that carry about 20% of the USA’s road freight. This 20% market share was valued at an estimated $114bn in 2014. James was seeking £50,000 to complete the app development in exchange for 10% equity.

The panel suggested it might be too difficult to raise the finance in the UK if it was going to be invested in the US. Investors would not have market knowledge to make a confident decision and generous UK tax breaks would not be available to them. There might also be heavy industry regulation that protected the brokers’ position. Later in the informal discussion it was suggested that potential investors might not believe it credible that they could get a 10% stake in a company targeting a $114bn market for just £50,000.

DSC_1377The final pitch of the evening was given by Borja Goyarrola, director of Gobe! Borja hopes Gobe! will become a travel/lifestyle app populated with content provided by users about their own personal favourite locations and places to go. The sharing of such local knowledge and tips would allow travellers and visitors to experience more of the living contemporary culture of a city rather than look at iconic monuments and exhibits that celebrate past achievements. Borja was a last minute addition to the roster and it was understandable he did not have a presentation available alongside his demo video.

Borja wanted £100,000 to finish developing the app and to pay for some digital and social media marketing. The panel suggested he should target some low-scale income from advertising before he pins his hopes too much on a big spending global advertiser such as Unilever stepping in to support the fledgling Gobe! I know from experience that fmcg giants and their advertising advisers can be rather conservative when faced with new marketing channels and opportunities.

Whilst equity crowdfunding is clearly about raising finance, research shows that more crowdfunding project creators have difficulties with marketing issues than anything else.

What crowdfund creators find difficultI have over 30 years’ experience in various results-focussed marketing roles and have concentrated on crowdfunding since 2014. I’m happy to meet for initial consultations free of charge. How things develop after that depends on the scale and scope of your aims and the extent of your marketing activity so far.

Clive Reffell, founder of Comanche Communications & Marketing and an independent crowdfunding adviser: E [email protected] and Mob 07788 784373.