Equity crowdfunding is one of the latest trends to hit the world. After the immense success of rewards crowdfunding platforms like Kickstarter and IndieGogo, there was a surge of pressure on the idea of equity crowdfunding.
And just last year this became a reality. A massive success for investors who can now easily invest in Kiwi growth businesses, and also for businesses who can now seek funding from their customers, users, and other supporters.
So how do you go about marketing an equity crowdfunding offer?
If only it were as easy as recording a quick video, providing some financials, and crossing your fingers.
Equity crowdfunding is going to be hard work, but that hard work will bear fruit if focussed in the right areas. The right marketing strategy will not only increase the chance of raising money, but will also leverage the public exposure to drive sales, recruit staff, attract partners, and so on.
The good part? I’ve taken a lot of the hard work out of the equation for you by spending a few sleepless weeks interviewing the owners and researching the most successful offers to see if I could create one of the most comprehensive guides on helping you launch a successful equity crowdfunding offer.
I’m the founder of digital marketing specialist BigBangly (Voted #1 Local SEO Company in New Zealand). You’re about to read a combination of the best online marketing techniques that I have learnt over the last 8 years, as well as a few tricks I’ve picked up from two of my favourite campaigns: Soma who raised 105% of their goal in 10 days and Harry’s who gathered 100,000 emails in one week.
This guide is broken up into three main sections;
Every Offer is Different
Although I’m going to go through the fundamentals I’ve picked up through my experience in online marketing and the ton of research I’ve done on crowdfunding, you need to remember one thing when you read through this guide: every offer is different.
What works for one offer may not work for another, so I encourage you to measure your progress every step of the way.
The 80/20 rule teaches us that 20% of the work will result in 80% of the funding, so you need to constantly be monitoring your results and leverage the technique that works the best.
With that said, let’s get on to the juicy stuff!
You Can’t Launch to Crickets
There are many reasons why movies go straight to DVD and never hit the big screen, and one of the biggest reasons is that they weren’t ready for the launch. They spent years making the perfect movie, then got a little too excited and launched at the wrong time to a tiny audience.
When you launch your online equity offer you need to make sure that your ducks are already in a row.
Launching an online equity offer is like making a movie: everything depends on pre-production. If your offer doesn’t explode as soon as it goes live, it’s probably going to limp to the finish line, or die trying. This means you need to build the buzz before your offer is even live.
The pre-launch is all about generating interest and capturing that interest. I’ve seen a few of the biggest campaigns flop because although they had managed to get in a few of the biggest blogs around the world, they had no way to capture the interest!
The action step is to create a professional looking landing page to capture emails and names. This will be the base of your operations during the pre-launch, and everything should always lead back here.
Harry’s, a razor company with a twist, did an amazing pre-launch campaign and all of their marketing efforts led back to their beautiful pre-launch page.
They even went a step further. Once a lead signs up, they are redirected to the page below where they can earn rewards by signing up their friends.
Harry’s leverages one of the most powerful marketing methods known to the world – word of mouth.
Just remember, the most effective way to introduce someone to your online equity offer is through credible referral, in other words, through personal contacts.
The pre-launch is your time to make those who are interested feel special, and they are special! The people who sign up are the first people in the world to want to get the inside scoop on your up-and-coming offer, so make sure you give them red carpet treatment.
In the Harry’s example they gave their audience the red carpet treatment by using phrases like “step inside”, which is a great way to make people feel like they’re about to enter something exclusive.
Now, your “thank you” page doesn’t have to be overly complicated with referral rewards, but it definitely needs to communicate how awesome the person is for signing up and give them a chance to spread your message through social media.
With pre-populated tweets, here are a few quick ideas that get you as much exposure as possible:
As an added bonus make sure you send a personal response to everyone who shares your message!
In conclusion, make those who sign up feel special and make sharing as easy as humanly possible.
How to Create a Buzz (Without Poking a Beehive)
Companies that equity crowdfund generally have one huge advantage – an established business. You already have customers and therefore a large network of people who are ready and waiting to spread your message.
To create a buzz, you need to start internally.
The pre-launch should start one month before the offer goes live, and during this month you need to have the whole company on board, waving flags and rearing to go.
Apart from yourself, your employees are the ones who love your company the most. They’re the ones who will be interacting with your customers and they’re the ones who are considered the ‘brand ambassadors’, so you’re going to need to leverage that as much as possible and make sure they are spreading awareness wherever they go.
You need to ensure that everyone knows what is about to happen. You’re giving your inner circle a chance to be a part of the company in a whole new way and that is exciting, but a lot of people still don’t understand the concept of equity crowdfunding, so really make sure you explain it clearly before you take a step into the pre-launch ring.
Now that everyone is on the same page, it’s time to leverage your internal networks.
Inside the Inbox
Email is the most powerful communication tool known to business, so it’s important that we start here.
Your goal here is to get everyone inside the company to write down a list of people who would be interested in the upcoming equity crowdfunding offer. This includes friends, family, investor contacts, and customers who they’ve connected with and know would appreciate the upcoming offer.
Initial contact is all about personal touch, especially for an email which is going to friends, family, investors, and customers. You’ll find it’s these people who are contacted early in the process who will be doing the majority of the sharing.
Below is the exact email Harry’s used to spread the word of their campaign which is a good template to start with.
Title: “Harry’s is Coming!”
Friends and Family,
After months of closely examining the weight of razor handles, natural ingredient mixtures in shaving cream and angles of razor blades, we are really excited to only be days away from launching Harry’s.
You’re important to me and I wanted you to be the first to know about our plans for launch. We have just put up our pre-launch site, you can check it out at www.harrys.com.
Our full site will be up in about a week and I’ll be sure let you know when it’s live!
In the meantime, I’d love your help in spreading the word! Here’s how:
1) Go to our website www.harrys.com
2) On the first page of the site, enter your email to join our mailing list
3) On the second page, refer friends using your own custom link back to Harry’s – and as a bonus you can earn free Harry’s products!
Thank you so much for all of your help and support. I can’t tell you how much we appreciate it. Look forward to continuing to share Harry’s with you and appreciate you telling the world!
All the best,
Don’t know everyone’s email?
Why not send them a message over Facebook! Remember this is all about being personal. While my mum would find it weird that I sent her an email, she would definitely respond a lot better if I sent her a quick Facebook message.
Note: Your investment opportunity will not be suitable for everyone. But don’t let this stop you from spreading the word to those who care most! Even if your friends can’t invest, they’ll still be able to participate socially and spread the word to others that can invest.
On top of this, you’re increasing the awareness of your brand which usually leads to a surge of customers during the offer. This is always great news to share with the to-be investors during the offer.
The Week Before Christmas
The countdown before Christmas is always exciting, and so is the countdown for your online equity offer!
Seven days before launch is when you should begin sending out the countdown emails.
First Email - Reminder (7 days to go)
Remind people about the offer. People that signed up at the beginning might have forgotten about what’s happening, so now is the perfect time to announce that in 7 days they’ll have the opportunity to be a part of your company!
Bonus: Now is a great time to include a video down the bottom with a thank you from the team for signing up! The personal touch really goes a long way.
Second Email – Hype (3 days to go)
Thanks to your first email, people know what’s about to happen, and now it’s time to get them excited.
If you’ve got any rewards planned, now is a great time to share them. Again make sure you stay personal and really make the people who signed up feel like they’ve entered an exclusive club.
The team at Socialites do an amazing job keeping it personal on their Facebook page with team shots that really make you feel like you’re a part of the family.
Final Email – It’s Go Time Baby! (launch)
This is it! Tomorrow your doors are bursting open and your campaign is about to go live! This email is about reiterating the excitement and how awesome your business is.
But wait there’s more… In conjunction with your offer, why not launch a giveaway?
A competition is a great way to massively increase the number of emails on your list. Best part? You don’t need to do a thing! There are many tools like this that help you build a competition page that works. Although this tool only runs on Wordpress, there are other tools out there that work a treat.
The benefit of a giveaway is in the second page. Like Harry’s thank-you page, KingSumo’s giveaway app gives users the chance to share for additional chances to enter.
A great article on this is Pat Flynn’s who managed to grow his list by 3,418% (nearly 200k!) emails in just 11 days.
Giving those that invest extra chances to win will also promote your equity crowdfunding offer while increasing the amount of people on your list. And the prize doesn’t have to be spectacular. A box of wines, one of your latest products, or a chance to have an all-expenses paid dinner with the team is usually enough to get your audience sharing.
There Is No Such Thing as Bad PR
Yes there is! I just wanted to get your attention. The second half of the pre-launch is about leveraging the media to spread your message for you.
During the life of your business you may have had some contact with people in the media industry. It’s now time to dust off those old business cards and see who would be a perfect fit to spread your message. If you don’t have the PR contacts yourself, Snowball Effect can recommend low-cost, fixed-price packages from experts.
This section follows the exact same principles as emailing your family and friends, you must keep it personal!
Each blog and news outlet will have a different angle and each reporter will have another so you need to make sure you spend some time tailoring the perfect message.
Below is an example of Soma’s outreach. Mike, the founder of Soma, recently got introduced to John through a mutual friend for his upcoming offer and this was his next message.
It’s short, sweet and to the point. John’s going to be happy because Mike kept it personal and he can quickly see if this product would be a fit for Gear Patrol or not.
Mike went even further by offering to help make the writing process easier which again makes it super convenient for John to spread the word.
It’s a Numbers Game
Although there is a lot to it, equity crowdfunding is essentially a numbers game.
If you want to raise a lot of money, you’re going to need a lot of traffic, and you want a good chunk of that traffic to be comprised of prospective investors.
To maximise this, you really need to find out where the majority of your traffic is coming from so you can push that medium during your offer. When you start your offer, convert the link for your pre-launch site into a bit.ly link. If you add a + to the end of any bit.ly link, you can see that exact stats about that link.
For the Kickstarter Soma that raised $100,000 in 10 days, here is the traffic breakdown for their offer http://kck.st/VjAFva+.
You can quickly see that Facebook was the major referral source and hence they should focus more of their energy on Facebook since that was generating the most interest.
Don’t forget other avenues though. Some groups that will be interested in the offer – certain wholesale investor groups for example – may not be very active on Facebook. They may be a relatively small group, but the amount they are interested in investing may be much more than average. So it’s worth considering specific channels for high value groups of prospective investors.
That’s a Pre-launch Wrap
Your pre-launch is all about generating as much hype as possible and the quickest way to do this is by leveraging your existing networks and connections.
The pre-launch is also about being personal while still getting across the importance of the message that you’re giving the people close to you a chance to invest in your business.
Finally, the pre-launch is a time to tap into virality through social media and contents to generate as much hype as possible. Remember, you need to start your offer with a bang!
Make Sure Your House is Built on Solid Foundations!
Getting the foundation sorted right at the start will help leverage any extra attempts you make at marketing your offer.
With a landing page for an online product you need to make sure the page has the highest conversion rate possible before you start spending a lot on advertising. Likewise for an equity crowdfunding offer, you can make sure your page is converting with pre-registered investors before you open it up to the public on launch day!
It’s a Sales Page After All
There’s a number of marketing benefits of a public offer, but the number 1 goal is to raise capital. This means that the offer content needs to be compelling in explaining what you do, who you are, and why I should invest in your business. It’s a sales page after all!
Make sure you’re being honest, open and grabbing the audience’s attention from the first sentence until the last. Remember, if no one reads what you wrote, all is lost.
The sole purpose of the first sentence is to get the reader to read the second. Once you think about your sales page this way, you’re on your way to becoming a professional copywriter.
With crowdfunding, being yourself and emphasising what makes you unique is more important than ever.
This is not the time to sit on the fence and be neutral. Mad Group, who recently launched its offer on Snowball Effect show who they are in a second. Instead of the cliché corporate photos, they’ve gone a little ‘mad’ and taken a few business mugshots.
Sweeten the Deal
Consider whether your company can offer meaningful rewards alongside shares. Everyone loves a bonus.
Invivo sweetened the deal by offering a few of their wines to investors to celebrate a successful offer. They also offered new shareholders the chance to win a trip to the Graham Norton show in the UK (Graham Norton is an Invivo shareholder). Invivo managed to hit their overfunding cap and raised a total of $2,000,000.
Best part? They included a 10% discount for the Invivo online store. This bonus encourages investment during the offer, but will also encourage shareholders to become even more loyal and talk about Invivo on an ongoing basis!
It’s the Journey, Not the Destination
Humans have an innate love for stories. Since we’ve learnt to communicate we have passed on stories from generation to generation and it’s time you added your story to the legacy of mankind.
A common mistake is for companies to get a little lazy during the launch. They stop sending emails, they stop engaging with their audience, and they go back to their usual commitments once the initial adrenalin has worn off.
You must fight through this! It’s a must to stay in touch and continue to really deliver value to the list you’ve acquired during your pre-launch stage.
This is done in a number of ways, including keeping on top of the Q&A process during the offer. Investors are bound to have questions about their investment, and you want to be able to answer these questions before they lose interest: promptness and credible responses are key. This forum is also informative for the general public, as there is a good chance someone else has a similar question. A quality response demonstrates your domain knowledge and your respect for the people who may invest and trust you with their money.
Posting updates throughout the offer is another great way to keep prospective investors engaged. Updates are made public on the offer page, and are a great way to demonstrate a variety of things, including any media attention around the offer, messages of gratitude to those who have invested, and anything exciting that has happened in the company since the offer launch. A meaty update might be just what is needed to convince someone to invest.
The 30 Day Email Campaign
Here is how you could structure a 30 day email campaign:
Day 1 – Massive hype. You’re now live!
Day 7 – Progress on the first week. You can start to leverage scarcity here telling people that they have 3 weeks left and X% of shares have already been sold. Remind people why this is a good investment opportunity.
Day 15 – A personal message from you thanking them for the progress so far and another update on how you’re going. You’re now halfway, so why not tell them what’s been happening in the company since launch – any cool stories you can share?
Day 22 – Thank everyone for the progress so far and if you’re not fully funded yet, tell the audience that you’re going to need one last massive push. If they know anyone interested get them to forward the email along. Create some scarcity and reiterate key benefits of the investment.
Day 30 – Last day! Send an email encouraging people that it is the last day, give them a countdown and tell them once the doors close, they won’t get another opportunity to invest in your company, maybe ever.
Do Things That Aren’t Scalable
People love the personal touch, but businesses are usually too distracted by terms like “scalable” to understand how to go about doing it.
One thing I do as much as possible is thank people individually for joining the BigBangly family.
I just received a message that Sarah had signed up for the newsletter.
So I searched for the business that she was associated with and sent her a thank you tweet, making it as personal as possible.
Could you do this if you had 10,000 people join your email list each day? Definitely not. But you can put aside half an hour a day and welcome at least a few people personally into your business.
The difference this makes is extraordinary and it turns your customer service from good to remarkable, which by definition is a business that your customers will remark on and tell their friends.
Spending an extra 5 minutes per subscriber has boosted our average annual revenue per subscriber from $6 to $27, not to mention the amount of referrals those subscribers have driven.
We live in a social world, and the more you can add that personal touch, the more your offer will succeed.
Wow… you made it! The launch is over and it was an amazing success. You guys rocked it.
One of the biggest complaints I hear time and time again in the world of angel investing is that the businesses are poor at communicating with shareholders.
So make sure you send a big thank you email to the entire list for participating, spreading the word, and for being awesome. Again, I highly recommend a video from the team as well as a written email just to add that personal touch and keep these people coming back for more.
It doesn’t end there though. Your new shareholders are excited and want engagement, so feed that hunger by harnessing their value as brand advocates. it’s important to communicate with shareholders throughout the year so they keep spreading the word about their company. Make sure you inlcude information about new key customers, new products coming down the pipeline, and new territories that you’re selling in. How you do this varies from sending out email updates on the financial and general performance of the company, to more creative ways such as video updates or inviting them for a tour of your premises – what better way to show them what goes on behind the scenes.
Besides the inevitable value in having a whole new bunch of people invested in and buying your products, the crowd can also be harnessed to promote products, leverage skillsets and capabilities that are missing in the company, and provide a credible source of market feedback and ideas. So you’ve got some cash, and a whole lot of helping hands ready to be called upon.
Now you’ve successfully completed your equity crowdfunding offer, you have a massive list of new and potential customers, you have a list of media contacts who can help spread your message, and you’ve got an army of brand advocates to help spread the word.
Time for a glass of champagne. You deserve it.