This post is inspired by a quote from Dr Richard Swart. He is a globally recognized authority on crowdfunding, equity crowdfunding and crowdfund investing. He directs the University of California, Berkeley research program studying crowdfunding and innovation. Recently he hosted an event where five years of statistics from the ASSOB equity crowdfunding platform were presented in the form of a research report entitled “Signaling in Equity CrowdFunding” at the UC Berkeley’s Fung Institute’s ACADEMIC SYMPOSIUM ON CROWDFUNDING.
This was the inspiring quote:
“I don’t believe the vast majority of people who start a crowdfunding campaign know what they’re getting into. The entrepreneur or the founder has to be ready, willing and able to commit a good chunk of energy and time to crowdfunding once they start. It’s not a set and forget model.” — Dr Richard Swart – See more here!
At ASSOB, the world’s oldest equity crowdfunding platform, an equity or investor crowdfunding raise goes through six separate, but connected stages. Each stage needs continuous attention and actions to give the highest possible chance that capital will be raised.
Lets skip all the compliance stuff (boring) and go directly to the marketing tasks that the entrepreneur or the founder has to be ready, willing and able to commit a good chunk of energy and time to.
The basics are, over a period of time, a raise goes through the following phases:
All stages require “a good chunk of energy and time”. Especially “Post-launch” when you deliver on the promises you made in your offering communications. If you “forget here” you will be reported to the regulators.
To gain and keep investment, from pre-launch to post-launch, you need to communicate what an investor will get from handing their hard earned money over to you. Usually these communications follow a sequence:
- First you need to determine what the investment opportunity is for investors and how you/they will articulate it’s value.
- Friends, family fans and followers will be initial targets for your influencers, ambassadors and potential investors list but it is important that you dig deeper and identify the investor audience that will resonate with your offering. Some people go as far as to build an avatar and a description of the perfect investor.
- Once you have identified the investor audience you need to build the communications program that will be communicate with them to attract and engage. This will include social media, public relations, email, press releases and events.
- Once you have the communications program nailed down, and followers attracted to your offering, you need to consistently communicate value to all followers so that they are kept up to speed and find the communications compelling. Then they invest!
These four steps are time consuming but essential. After 300 or so equity crowdfunding raises on the ASSOB platform the ones that get filled are the ones that are worked!