Fund-raising Campaign Guide
You know how great your business is, your family has heard it more than a few times, but most people have no idea who you are or what you’re doing.
This guide outlines the tactics for a successful crowdfunding campaign. Use these strategies to ensure your megaphone is as loud and crisp as possible. There are thousands of potential investors out there—let’s make sure they hear your story.
- Before You Launch: Nothing is more compelling than seeing hardworking people building what they love. Start with a great story and beautiful profile.
- Activate Your Current Circle: Already have customers? They’re obviously believers—so get them pumped. Give them the chance to own a piece of the company and kick off your fund-raise with a bang.
- Messaging: Getting people to give up their time, much less their money is tough. To get either, you need to hit the right points that’ll resonate with your audience.
- Educate: Equity crowdfunding is new. Potential investors must understand what they’re getting into. It’s easier to give someone hard-earned money when you know what’s going on.
- Analyze and Manage Momentum: Know who your ideal customer is? They’re probably also your ideal investor. Reach this demographic with targeted advertising, and well-timed Facebook posts. Then build the momentum and herd those investors fearful of missing out.
Before you launch
Hone your narrative.
“Make sure you are differentiating your company—are you a first, a best, or an only? You want to make sure the description you use can’t be used by any other company.” – Michelle Faulkner.
Billboards, tweets, pop-ups, commercials—you are consuming all the time, everywhere. But when you get a chance to invest in something that’s not just consuming, that’s experiencing.
That experience is crafted through the narrative of the investment. “I bought a new wallet,” transforms into, “I invested in this amazing wallet company that created this new compostable material.”
Figure out your story, then shape your campaign around it. That narrative is what people are investing in.
Build out your profile.
All potential investors will be funneled to your profile—we can’t stress enough how important a solid profile is. Video, visuals and transparency are all key. For an in-depth walk-through on crafting your profile check out our Profile Guide.
Oh, and remember, you have options! If building out a killer profile sounds like a lot of time and effort you’d rather spend on improving your product or revving up users, you can hire LoyaltyHub to do it for ₦15,000.
Set up a timeline.
“Over prepare. That timeline of what you need to have in place before you launch is worth having on your wall, etched into your mind. It’s lack of preparation that crushes the best crowdfunding idea.” – Heather Delaney.
Formally, you could throw up a campaign on the internet and people would swim their way towards you. It doesn’t work like that anymore.
Before launching, you need these ducks in a row: first adopters, social media posts, videos, announcements. If you’re planning on a 60 day campaign, know where you want to be at Day 7, what update you’re going to tweet on Day 15, and so forth.
Line up your investors.
“Crowdfunding’s a paradoxical vehicle. You go on crowdfunding hoping to raise money, but if you haven’t raised the money, people don’t think it’s a good idea.” – Zach Smith, Funded Today
Day 1 of your campaign is like the Grand Opening of a restaurant, you want to make sure people show up and they’re excited. That gives the cue for passersby to jump in and get a slice of the newest thing in town.
Before you launch reach out to your crowd—make sure they know you’re fundraising—and get them committed. By Day 7, you should have already achieved at least 30% of your funding goal.
Activating your crowd
It could be a newsletter or a rewards program, you should have a list of names and email addresses in your arsenal (and should be continuously adding to it before and during the campaign).
Your customers are standing closest to the lip of the funnel—they’re already paying you for your services, the next step is to have them take that money and put it into the business directly. Email them first to introduce them to equity crowdfunding, and again on the day right before your campaign launches to remind them curtain opens in a few hours. Don’t spam.
Remember that narrative we talked about earlier? You need to apply that here and make your users feel privileged, unique, and expert. You’ll also have to teach them exactly what equity crowdfunding is since it’s such a new space. We outline that in the next section, Educating Your Users.
Connect with your friends, family, fans.
There’s a saying that the only people who participate early in business ventures are the 3Fs: friends, family, and fools. We think differently—that last F, represents your most loyal and fervent fans.
We talked about your mailing list, but likely you have a handful of customers who you know by name and are passionate about what you do. Reach out to those fans personally, activate their enthusiasm by bringing them onboard the campaign (“Hey, I’m running a campaign soon and would really like to know what you think about my profile. Do you know anyone else who’d be really interested in this?”)
Crowdfunding is powerful because users rarely have a chance to interact with founders on a meaningful level. This is that chance. Excited fans excite others.
Establishing social media presence.
“First you have to have a community, that’s where it truly begins. Embracing the people around you is good, but they might not be your core audience. Find where your core audience hangs out online—are they on Facebook, Whatsapp or LinkedIn? Be active there.” – Roy Morejon, Command Partners
You don’t have to populate every social media platform available on the internet, but there will be a few that work best for your company. (LoyaltyHub heavily uses Facebook and Whatsapp for content and Youtube for fun.)
Being active on social media allows you to show off your company values, receive user feedback, and channel traffic to your main site. It can also make your business seem bigger than it is.
Get on the phone or meet in person.
After you’ve emailed someone—reporter or potential investor—give them a ring. Because no one calls anymore, you picking up the phone makes you stand out. Even if the person doesn’t answer, they’ll see your name or your number or hear your voice message—you’ve got a toe in the door.
We also recommend hosting events to talk about the facts. Have a crowdfunding party where you invite your customers or your friends and their friends. Get that facetime. It is much easier to convince someone of your drive when they can look you in the eye and hear the fire in your voice.
Take advantage of feedback.
“Perspective is a private experience. When you get into a crowdfunding campaign, it’s your baby. You get so attached you don’t recognize that perhaps the market doesn’t want it or it needs to be tweaked before it resonates. Fail fast, learn quickly.” – Zach Smith, Funded Today.
Say you’re running a campaign for a purse company. Reach out to a friend on Facebook who’s really into fashion, share the campaign and your story. Ask them to invest on Day 1. If they agree, perfect. If they don’t, they’re likely going to still give you valuable information: “I wish the handles were blue.” “Your purses are kind of pricey.” “I just bought a purse from this other brand.”
When you try to get investments, don’t think about it as just collecting money. You’re collecting information. Use that to move fast, hone in, and perfect before the big day.
You need to hoist your community aboard, but getting them on the boat is hard. Much of it relies on how you paint the horizon.
Reaching out to users.
A lot of companies feel weird about soliciting users for money, but that’s the wrong way to think about it.
You are offering your users an opportunity to become owners. These are the people who have believed in you since Day One and they deserve the chance to support that vision in a more intimate, powerful way. Give them a sense of ownership: an experience they’d never otherwise be permitted to have.
A quote from Wefunder,”Regular crowdfunding is buying a product. Equity crowdfunding is buying a piece of the factory.”
Reaching out to Large Crowd Leaders.
There’s one big question you need to answer for a leader of a large crowd in a pitch email: “Why are you doing this?” There’s a philosophical and a strategic answer.
The Philosophical Why
Equity crowdfunding allows your users to participate in your success in a more tangible, meaningful way than simply buying a product. They become both figuratively and literally invested in your company.
Take a company in US for example called Oculus Rift for instance. In 2012, Oculus closed a Kickstarter round of $2.4 million. Two years later, Facebook bought Oculus for $2 billion. If those Kickstarter backers had invested instead of donating, they would have had a 154x return on their investment. And they would have deserved it, because they were the early believers who took that risk and had the faith.
The Strategic Why
When you give someone the identity of being an investor, they’re going to do more than sit idly on the bleachers. They’re going to be waving your banner and shouting at the top of their lungs.
By raising investments from the crowd, you now have a larger following who is going to source employees for you or share by word-of-mouth about product launches. You can harness that strength in numbers in specific ways that benefit your company.
After all, your users are already the exact profile of people who’d know other potential users. Making them investors means it’s just that much more likely they’d go out on their own to find more people who feel the same way they do.
Educating your investors
Equity crowdfunding is brand spankin’ new sector. That means most people won’t have a clue what it is, how it differs from regular crowdfunding, and why it’s so exciting. It’s your job (and ours) to help educate potential investors before they can participate in equity crowdfunding.
What is equity crowdfunding?
Equity crowdfunding means businesses can raise money from a large group of people at smaller investment amounts. In return, that group of people get a financial stake in that company.
So, what makes it different from Kickstarter?
On Kickstarter businesses are usually hosting pre-sales of their product or it’s donation-based crowdfunding. On LoyaltyHub, you’re not donating money to a business. You’re investing in their business and also have the option to carry-out a crowd-sale by offering future inventory.
What that means for investors, is you can now directly put capital into your favorite restaurant or your favorite cloth-making company. You’re no longer just an avid customer, you’re an owner. And you get rewards for that, too. For instance, discounts, food credits, free merchandise, etc.
What makes equity crowdfunding exciting?
It gives ordinary people—not just the wealthy—the opportunity to invest in private businesses around them that they love. For a very long-time, only the wealthy and well-connected had any say in which businesses got to flourish. Broad street and VC’s had taken over Main Street.
But with equity crowdfunding, we’re making it possible for SMES with great teams to become big companies that can create Jobs and improve local content. You don’t have to be a millionaire to put in ₦10,000 in the Supermarket you go to every Saturday. You now have the power to directly support businesses you love—with an opportunity to make money on it yourself. We’re taking Nigeria back to being a nation of producers and owners, not just consumers.
Convince the influencers.
“You should be laser focused on the outlets in which you know your target audience are sitting and make sure you are raising the awareness there.” – Heather Delaney, Dynamo PR
Not every person in Nigeria needs, much less is looking for, something like a Container Store. But that doesn’t mean you can’t run a successful campaign. The key is to find your potential customer base, find the person who has access to that customer base, and target that person.
For instance, an owner of a popular outdoors shop. If you bring on board leaders, they will bring their following with them.
Manufacture your own second wind.
Schedule your updates.
Strategically parse your press throughout the campaign. No news means less eyeballs, meaning higher chance of investment drops or plateaus. Have some sort of major update—new blog post, video clip, interview—ready at least once a week. Add chapters to your story.
One way to spin your progress is by setting stretch goals. Your original funding goal should be the minimum of what you’re looking for—and you should reach this earlier on in this campaign. It gives you the soundbite: “We hit our goal of ₦10,000,000 within two weeks! And people are still investing more.”
When you fundraise, you can plug in your own Google Analytics to track profile views and investments.