Crowdfunding - conversations with your own crowd

To succeed at crowdfunding you need to convince the world at large that your business has legs and that your investment proposition is better than the next. The best way to gain the attention of the crowd is to gain their trust over time. Nothing says “trustworthy” quite like the confidence vote of many other people.

So where do you find those who will put their head above the parapet and give you the endorsement you need to capture the attention of the Crowdcube crowd? In your network of existing contacts is usually the answer

In initial conversations with our clients, they may worry that they don’t have a network that would be likely to invest. But more often than not, as we work with them to scope out the size of their network and the potential value that sits within that network, it becomes apparent that they do have a decent sized network and it has good investment potential. And once we get them into conversation with their network, it is not unusual to see larger investors come out of the woodwork, be it directly or indirectly.

If you are thinking of crowdfunding, we would advise you to start by making a list of all the groups of people that you know. Strength is in numbers so cast your net wide. And remember that successful crowdfunding requires a mix of lead (larger) investors and a fair number of smaller investors. So you’ll need all kinds of people with all kinds of backgrounds to get you over the line.

You need to keep at the forefront of your mind that with equity crowdfunding, you’re not asking for donations. You are seeking investment. And all going well, your own crowd too  may possibly make a nice little sum of money further down the line from this investment. You are presenting them with an opportunity.

Remember that successful crowdfunding requires a mix of lead (larger) investors and a fair number of smaller investors. So you’ll need all kinds of people with all kinds of backgrounds to get you over the line @IdeaSquares

Unless institutional investment is part of your play, friends and family are probably the best place to start. Your LinkedIn network could well be a treasure trove and should not be neglected. Then expand the circle further and wider: ex-colleagues and employers, customers, suppliers, partners, mentors, your local business community…. the list goes on.

You’ll also need to be realistic when working on your network. Preparing for crowdfunding doesn’t happen overnight. These conversations with your crowd take time and hard work. But there are huge benefits to be gained from a successful equity crowdfunding raise so the best thing you can do, is to take the time to prepare and set yourself up to win.

The first time your crowd sees your crowdcube campaign, should NOT be the first time they hear about this investment opportunity. Think of it a bit like dating. You’re playing the long game. You need to court your network, get them round your business idea and then get them round the idea of crowdfunding and what it entails.  

Successfully warming up your crowd is about making them feel like they have contributed to the end result. Ask key people to review your materials, talk to your family about crowdfunding and why you’re doing it, ask some your customers what rewards they’d like. In whatever way is appropriate, let people contribute, give them the opportunity to give you feedback and then register their interest in your campaign. Most importantly, use the time in the lead up to your campaign to finalise conversations with potential larger investors, wherever possible BEFORE you launch. Not after. Let people in your own crowd arrive to the campaign already very comfortable with the opportunity and ready to invest.  

If you’re considering seeking support in preparing your equity crowdfunding campaign for Crowdcube and would like some guidance on how to unlock the investment that sits within your crowd, get in touch with IdeaSquares to learn how the Crowd10 programme will help to increase your chance of success.

Kirsty Ranger

Guest author: Kirsty Ranger Founder at IdeaSquares

Kirsty is the founder of Bristol-based crowdfunding agency IdeaSquares. She has been personally involved in millions of pounds of fundraising. Two years ago, she launched the Crowd10 programme in partnership with Crowdcube, a programme designed to help you launch your crowdfunding campaign more successfully.