The decision to partner with another business to execute on any part of your growth strategy is a big one, whether it’s appointing a solicitor, PR agency or HR consultant, and choosing someone to support your fundraising efforts is just as important.
In this article, we look at whether you should hire an agency to support your crowdfund and the important considerations to take into account when you make the decision.
Firstly, full disclosure, Raising Partners specialises in running large-scale equity crowdfunding campaigns. Our clients include the likes of Thread, Celtic Renewables and Penfold and on average our campaigns raise well over £1m. Often our clients have raised investment before but crowdfunding is a whole new ball game and they need additional help to run such a public-facing fundraising campaign.
Let’s look at why you might want to hire an agency to support your crowdfund, and then the scenarios when you can go it alone.
We know that as a scaling business, you and your team are likely wearing many different hats. It’s one of the things many founders and entrepreneurs, myself included, love about running our own businesses – no two days are the same and we’re constantly learning. But fundraising, and crowdfunding specifically, is a different role altogether.
As fundraising is often one of the most critical priorities for entrepreneurs, it can be tempting to assign the role of raising money and crowdfunding to your senior executive team and add it to your job description. And whilst it is important for founders to play an active role in a fundraise, you most certainly shouldn’t be doing the heavy lifting of planning, designing and executing a crowdfunding campaign. Especially when growth, revenue, hiring, product development, marketing, finance, HR and chief pot washer, also fall under your remit.
You don’t write your own contracts, your solicitor does. You don’t file your own accountants, your accountant does. It makes complete sense to hire experts to help you with things that require specialist expertise and crowdfunding, and fundraising more broadly, is no different.
Not to get too Liam Neeson on you but the ability to successfully execute a large-scale crowdfunding campaign requires a specific set of skills, acquired over many years. Fundraising specialists have these skills.
…the ability to successfully execute a large-scale crowdfunding campaign requires a specific set of skills…
It can be easy to forget that early-stage investment, just like the stock market, is an evolving market. It’s constantly changing and therefore so are our strategies. What we did to ensure Thread’s crowdfund was a success and raised over £2m in 2018 isn’t what we did to ensure Penfold raised over £3m in 2021. Crowdfunding specialists have a depth and breadth of market experience and are living and breathing investment every day.
Your time is your most important asset and you should spend it wisely. In fact, many CEOs attribute their success to their ability to delegate and manage their time effectively. Crowdfunding specialists know the process of putting together a successful campaign inside out, and more importantly, they can execute quickly. Underestimating the time and resources required to run one of these campaigns is one of the biggest mistakes we see businesses making.
It’s an oldie but a goodie, fail to prepare – prepare to fail. It takes a minimum of 4 weeks to prepare everything for a crowdfunding campaign, and that is assuming you already have lead investment lined up. From the pitch deck writing and design, to the video, pitch page and due diligence process – crowdfunding is full on and not for the faint of heart. And that’s before we get started on running the live, public-facing campaign which comes with hundreds of requests for more information, investor questions and meetings.
It’s easily a full-time role if you don’t have support.
There’s no getting away from it – crowdfunding is a very public way of raising money. Your customers, the wider investor community, your team, your family and friends and hopefully hundreds of thousands of people who have never heard of you, will all be exposed to your business and proposition.
There are so many positives to crowdfunding, but there are also plenty of things that can go wrong. Poor messaging, ineffective communications and worst of all, public failure, are all risks that can be mitigated by working with a professional, experienced firm to support you.
Whilst hopefully, the above reasons have served as just a few nuggets that will help you decide to hire professionals to help you crowdfund, it’s important to add that one size does not fit all so when choosing a partner to work with on your round, consider their approach and how flexible they are.
Here are some questions we recommend you ask anyone you’re considering hiring to help you to raise investment:
If you’re raising a small round
If you’re only raising £75,000 it might not make commercial sense to hire an agency or consultant to support your raise. Many agencies offer scopes of work tailored specifically to smaller raises and at Raising Partners, we offer free office hours sessions and the rest of our Runway crowdfunding hub can help answer some of the most frequently asked questions we get.
If you’ve done it before and you have the time
If you’ve run a crowdfunding successful campaign before* (or someone in your full-time team has) and you have the capacity to execute on another raise then, of course, there’s no reason that you can’t do so again. *whilst remembering that crowdfunding is a market that evolves so at the very least we recommend you have a chat with the relevant platforms and partners to sense check your strategy.
If you’re thinking about running a crowdfunding campaign, we’d love to speak with you.
We run informal office hours sessions every two weeks to discuss all things fundraising. Our sessions are completely free and there’s no obligation to work with us on a commercial basis – we’d just genuinely love to help if we can! Apply to our Office Hours here.
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