Editor’s note: This is the third and last installment in a blog series on tips for executing successful equity crowdfunding campaign and four communication strategies. Here are links to Part One and Part Two.
In my two previous blogs, I shared the first seven strategies for implementing equity crowdfunding campaigns. These are valuable lessons and insights we’ve learned so far after our Crowdcube launch. We’re capitalizing on our failure by turning them into a knowledge hub for soon-to-be crowdfunders. To review, the previous seven tips are:
- Preparation is the key
- The clarity of WHY
- Weave your WHY into a compelling story
- Build systematic internal and external communication channels
- Hunt down the barriers and eliminate ASAP
- Diversify promotional materials
- Intentional outreach and strong media relationships
Below, here’s what you need to take note before launching your campaign:
1) Keep rewards compelling with indicative tangible returns
Always remember that people will instinctively ask themselves this question: “What’s in it for me?” Though it sounds selfishly blunt, this is the first thought that comes to their mind. We learned that rewards should be wrapped with compelling, yet succinct titles and descriptions with indicative tangible returns. Simplify the reward packages and let the words amplify the value they provide to the investors. Don’t over deliver, under deliver nor assume, but make sure you have a separate computation of these rewards as well.
Key takeaway: Avoid the jargons and buzzwords but rather use simple comprehensible neutral terms and make sure you keep things exciting to build a new level of engagement. We launched the Red Club Card in the middle of the campaign period to draw attention and encourage people to re-visit the rewards page. Rewards are not a driver if the fundamental raise story doesn’t sell. So you have to be as creative and practical to deliver tangible returns for investors, especially if your business model is mostly digitally-powered at its core.
2) Time is gold
Originally, CSW crowdfunding campaign launch was scheduled before the annual CSW Europe 2015 conference in October. The whole team was just waiting for the go signal from me to activate and sync the communication channels and updates. Unfortunately, we didn’t know it would require around 30 days (in our case) to undergo the verification process before going live, pushing the campaign towards the end of November.
Logically, the excitement from the European conference has subsided, and the pre-campaign preparation bogged down the hype, leaving the middle of the campaign, hanging until December where everyone is busy prepping up their holidays.
Key solution: It’s better to launch it before or after the holiday seasons (later spring, summer or early fall) so you won’t be chasing around folks in transit or vacations. Schedule your campaign before or at an event related to your industry or business. Market trends are also indicative when launching a campaign like in Mondo’s case (successfully hit 1 million pounds in two minutes) where fin-tech industry is exploding in the UK and the company itself is redefining the banking sector. All Things Network had a chance to pitch their Kickstarter campaign when their CEO, Wienke Giezeman spoke at the European conference.
3) Choose the right platform
Do your homework when choosing the right platform for your campaign. You can use third-party crowd rating sites and thoroughly read independent reviews and articles of the top 10 crowdfunding platforms before you hook up with the final one that sometimes, it’s like “kissing a few ugly frogs before you find the prince charming.” Four major factors: support, ease of payment, location, and unbiased promotional stints.
Crowdcube only promotes campaigns in their newsletter that they believe will raise funds. Subjective preferences and exclusivity often neglect other campaigns that investors should have seen or would be interested.
Key solution: So, if you want to move forward with your equity crowdfunding campaign, better have someone on your team try your top 5 list and see how each one works.
Overall, launching an equity crowdfunding is hard work and requires energy, time, and most importantly grit to get it done. You’ll have a tremendous learning experience once you do it hands-on with a bunch of team who also sees your vision exactly as you envision it. This will also give you a time to assess your team’s preparedness on your next bold project.
What do you think of these insights? Share with us some of your own…