Over the last 7 years, I’ve raised $150mm for my own companies mostly via equity crowdfunding, whether it’s via Regulation A+, Regulation CF, or Regulation D. I’ve seen the good, the bad, the ugly and the best when it comes to all facets of setting up and running an equity crowdfunding (“ECF”) campaign. I’ve also worked with many of the major portals and technology providers and have raised for companies in various stages of their lives.
Marketing and storytelling is a crucial part of any ECF round, but there’s a lot a founder should know before launching a raise. Here are some of the things I’ve learned and seen along the way:
- Not every business is set up for ECF
You may have the best product or service in the world, but that doesn’t mean it’ll translate well to ECF. In traditional fundraising, you have the ability to spend 30+ minutes pitching your business or idea to someone. The prospective investor can ask questions and there can be a dialogue. In ECF you don’t have that luxury, and instead you have 15-30 seconds to get someone’s attention before they click elsewhere and lose interest. All things being equal, companies with a straightforward product or service tend to perform better in ECF than those that are harder to explain. However, that doesn’t mean you won’t have success, it just takes a heavier lift with storytelling (see #2 below).
- Regardless of your company, you need good marketing assets….
Related to #1 above, having strong marketing assets (e.g. videos and images) will go a long way in making sure you have a successful ECF campaign. Many founders make the mistake of launching a campaign without taking a strong look at the marketing assets they have. A little goes a long way, and in some cases, spending a few thousand dollars (or more) can make or break your campaign. This is especially the case for a company that may have a great product, but may not have the best imagery and content. Unfortunately, a great product isn’t always enough to have a successful ECF campaign. You need to be able to tell the story to the crowd, and that comes with great content. So my recommendation is don’t be stingy, especially if you’re an issuer who plans to spend money to advertise your campaign. The better the assets, the better your advertising dollars will perform, and therefore the better your campaign will turn out.
- And you constantly need to reinvent yourself on marketing
Continuing on the theme of storytelling, if you plan to be a serial issuer and run multiple campaigns and/or you want to raise millions of dollars, you’ll likely be spending hundreds of thousands of dollars in advertising and also be exposing your campaign to hundreds of thousands of potential investors. Just because some ad or creative worked on one campaign doesn’t necessarily mean it’ll continue to work for you. Also, your audience will start to tire of viewing the same assets and you want to make sure you tell a fresh story with fresh assets through the campaign, especially as you make progress in your business/product. So be prepared to invest in new creative and new storytelling throughout your ECF campaigns. Injecting your campaigns with new and fresh creative, especially towards the end of a larger campaign, will really help activate your audience and make your ad dollars work even better for you.
Check our the next article in this series, Part 2 – Ad Spend.
Atlas Rd specializes in guiding founders through the process of raising money via equity crowdfunding. We help oversee all facets of a campaign, including marketing, legal, regulatory/compliance, accounting, finance, and investor relations.
Interested in learning more about raising money online? Email us at info@atlas-rd.com.
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