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A crowdfunding campaign is an incredibly effective way not just to raise equity investment but also to engage with your users/customers and build an army of brand advocates who will shout about their investment in your company from the rooftops, encouraging lots of lovely organic referrals to the business.
Regardless of the size of the campaign, there are 4 key phases to be aware of.
Pre-Registration Phase.
Description
Ahead of the campaign launching, the pre-registration phase is designed to warm up a team’s network; friends, family, ex-colleagues, LinkedIn connections, customers, partners, suppliers etc, making them aware that they will soon have the opportunity to invest in the company. This should all be happening whilst you prepare your key assets, namely the campaign video, pitch page, pre-registration page and investor deck.
Key Aim
All of these individuals should be directed straight to the your crowdfunding pre-registration page so that they can submit their interest and their data can be captured. This is a captive audience of prospective investors and it will enable you to tailor your campaign communications towards them. It may also help you to identify prospective larger investors. At this point, the messaging should be focused on encouraging people to pre-register to benefit from ‘exclusive access’ to the campaign before anyone else.
Private Campaign.
Description
Once the pre-registration phase has ended, the campaign will launch privately. That means that the Crowdcube page will be live but accessible only if you have the unique URL. This URL will be shared with everyone that has pre-registered. All lead investment secured to this point will be loaded onto the platform so that when the pre-registered investors are sent the link, it will already be at 80/90% funded and you can leverage this momentum.
Key Aim
During this period, the aim is to maximise not just the amount of investment on the bar, but also the number of investors on the pitch before it launches publicly. Investors on crowdfunding platforms are concerned with both the % funded that a company has reached and also the number of investors already involved. This is why it’s so important to build momentum and get as many investors into the campaign as possible during this period.
Public Campaign.
Description
This is the point at which the campaign will launch publicly to the thousands of investors registered on the platforms. Investor questions will start to really ramp up and you should start to post more regular updates and investment-focused content for investors to digest. The first and last week of the public campaign always sees the most investment and so you should tailor your most impactful communications around that. The campaign is now publicly visible to anyone that lands on the crowdfunding platform, but they must have an account to view the pitch details or access the investor deck etc.
Key Aim
Naturally, you want to maximise the amount of investment secured during this period. You should aim to provide comprehensive answers to investor questions and respond quickly and proactively. You also want to engage with investors by hosting exclusive investor webinars, and provide compelling investor updates e.g. investor testimonials, business updates, details on key hires and profiling key team members etc.
Completions.
Description
The campaign has now closed and the completions process will begin. The first step is for the platform to perform a legal review. On Crowdcube this is then followed by a 7 day cooling off period, triggered by a ‘cooling off email’ sent to investors, during which they have 7 days to review the company’s articles of association etc and renege on their investment if they so wish. On Seedrs, the process is slightly different. Following the close of the cooling off period, payments are taken and funds are transferred to you.
Key Aim
You want this to be as smooth a process as possible, providing the platform with all the relevant information that they need before the campaign closes, so that you minimise the time between the campaign ending and the cooling off period beginning. Experience shows that if a campaign’s legal review period is prolonged, this can lead to investment cancellations. You also want to ensure that once funds are taken, the platforms have extracted the proper fees and not overcharged.
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