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By Nathan Rose, Assemble Advisory
Crowdcube has helped a huge number of companies successfully crowdfund, so it makes sense to ask: “how did they do it?”
In this article I want to share a top tip from four of their companies.
They’re all different businesses, ranging from a world-changing electricity generating technology, to delicious locally-produced honey. This broad sample of Crowdcube companies shows the diversity in the sorts of firms equity crowdfunding can work for. If you have been considering doing a campaign of your own, these tips could help you replicate their success.
Pavegen generates electric power from the kinetic energy of peoples’ footsteps. Laurence Cook explains, “We are doing something no one else has done. We have a vision to change the way cities operate in a way no other company does. We can really lay claim to trying to change the world. So we have an incredibly compelling story.”
“At the time of our Crowdcube raise, we created a significant ‘media moment’ around it, which drove hundreds of thousands of people to our site. It was key for why we were able to finish our raise in just three days.”
Pavegen did all this without spending anything on public relations. Now, most companies are not be as groundbreaking as Pavegen, so your job might be a little harder - but to get media interested in your campaign, you will need to work out what is unique about your company.
Just because you are offering equity doesn’t mean you can’t also provide a ‘sweetener’, and in the case of Haughton Honey's Crowdcube offer, they did this – literally – with sweet honey!
“Mid-campaign, we decided that anyone who invested £1,000 or more would get a lifetime supply of honey,” says Haughton Honey owner Crispin Reeves. “This really struck a chord with people. We saw an incredible influx of new investors who all invested exactly £1,000. We also saw a lot of investors who had committed smaller amounts bring their investment up to that £1,000 level!”
You should do everything you can to assure yourself of success before you launch.
goHenry gauged interest in their Crowdcube offer, and generated momentum and awareness among their crowd, through running a pre-registration period. “What we did was break it into three stages: in the first stage, we went out to our existing investors to generate that initial momentum. That got us to 43% to our target. Next, we opened it up to our existing users for 48 hours before showing it to the public. We got great uptake from that – by the time we opened it to the public, we were already above our target.”
Monzo Bank (previously known as “Mondo”) completed their raise in 96 seconds. Yes, you read correctly; their Crowdcube offer was finished in under two minutes.
But, if we are being honest, they didn’t raise that money in 96 seconds. It is a nice headline, but Monzo’s campaign started a whole year earlier when they made the conscious decision to deeply involve their potential customers in building Monzo from the ground up.
“We asked our potential customers very, very early on to help us build the bank of the future – the kind of bank that they would be proud to call their own. We very intentionally created a ‘movement’ of people who wanted to be involved with creating something. When we created our prepaid debit cards, for example, we invited people into our offices to pick them up. That way, they could come and see our white boards, meet the design team and product team and actually give their input into what we were building,” explains Monzo CEO Tom Blomfield.
“Then, when crowdfunding came along, it was a very natural progression for these people. They were around us so much, and felt so much a part of what they’d help us build, that they were the ones asking us: ‘When are you raising money?’”
The reason Monzo’s offer was completed in 96 seconds was that they had done such a great job of building their crowd that people were waiting to be asked for their money, and when that opportunity finally came, no one wanted to miss out.
There are a vast number of things that go into running a crowdfunding campaign, and it’s never one single thing that will lead to either a successful or failed outcome. But looking at what has worked for others is a great way to begin building your own crowdfunding strategy and could very well help you join the funded club.
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