With each successful funding round, we’re excited to add innovative new businesses to the Seedrs portfolio, and follow their progress as they grow.
A Seedrs campaign can be rewarding for businesses at every phase of their lifecycle, allowing them to tap into the resources and commitment of their communities both to secure investment, and acquire customers. One of the best ways to discover the long-term benefits of crowdfunding, is to speak to founders who have already successfully navigated the process.
After the close of their third successful funding round on Seedrs, we sat down with Chris Forbes, founder of sustainable tissue brand The Cheeky Panda, to discuss why he chose equity crowdfunding, and how it’s helped his business get to where it is today.
How did you first come across Seedrs and what attracted you to the platform?
After our Angel round we wanted to scale up the business. Rather than opting for VC or Private Equity funding we decided that sourcing investment from the crowd was ultimately a better fit for our brand.
We reviewed a number of platforms before settling on Seedrs and we’ve since launched three successful campaigns. Seedrs not only has the largest capital committed of any crowdfunding platform, it also has the best governance. Their nominee structure, which they hold and manage the shares of startups on behalf of the underlying investors, was vital in allowing us to bring on thousands of investors without accumulating a gigantic cap table.
How much have you raised on Seedrs and how many investors did you bring on board?
We completed three funding rounds in 2017, raising £500,000 at a share price of £4.23 and market cap of £5 million. In 2019 we raised £1.6 million at a share price of £18.25 and market cap of £25 million. In May 2020 we raised £2.4 million at a market cap of £50 million. Each time we raised, we have consistently produced significant gains for our shareholders.
After three funding rounds and one preemption round, we’ve raised a total of £4.6 million from over 1,800 investors – all while keeping our cap table at a manageable size.
What other fundraising options did you consider, and why did you choose crowdfunding?
For the last round we spoke to a lot of Private Equity houses but they tend to be slower-moving, and we wanted to expedite the process. We didn’t want to give up large percentages of equity, end up with a mix of equity and debt, or undergo expensive board hires which would compromise our profitability. We also didn’t want to be instructed how to spend the funds by external parties. We prefer to do things our way, and the crowd supports that.
What advice do you have for entrepreneurs considering launching a Seedrs campaign?
Entrepreneurs should keep in mind that due diligence is probably the most arduous part of the process. If you’re considering launching a campaign, you’ll need appropriate evidence for every claim you intend to make in the pitch. This includes market research, accolades and growth milestones. This is all to ensure that the material presented to prospective investors is fair, clear and not misleading. Despite being time-consuming, In the grand scheme of things, it’s a beneficial process to go through as it helps set you up for success further down the road. So long as you keep good records, the due diligence process should be pretty seamless.
What was the biggest highlight for your campaign?
All three of our campaigns reached their funding targets and went into overfunding in a matter of weeks. Each round achieved greater value than the last, as we’ve gone on to scale. The highlight is that we now have over 1,800 investors who are actively helping the brand, and both personally and financially invested in its growth.
What Seedrs products or services did you find the most helpful throughout your campaign?
Seedrs’ investment team is always on hand to help set you up for a successful campaign, with expert insights and advice. They’ve helped a number of businesses set the right targets for their campaigns and reach them, so they know how to support you to optimise outreach, and convert investment from your community along the way.
In regard to its product offering, Seedrs does a great deal of work to ensure that shareholder management is as low maintenance as possible for entrepreneurs – especially when they’re bringing on hundreds, or even thousands of new investors with each round. The Nominee Structure meant that we could deal with Seedrs directly in regard to consents and shareholder votes, so we could easily progress with our financing each time we raised further funds.
The Secondary Market is also an innovative feature that allows investors to trade in and out of the business as they see fit, allowing us to bring on new investors even after the initial raise. This is a good tool to gauge investor sentiment about the company and give an indication as to how it would perform on a public stock exchange – which is the goal for a company like ours. We’re a relatively big company now, so moving forward with an IPO is a natural next step for us – essentially a bigger version of the crowd.
What marketing support products did you opt for, and how did they help the success of your round?
We decided to purchase extra marketing support though Seedrs, including a Pre-registration Accelerator – which promoted priority access to our investment opportunity both to our network, and Seedrs’ investor base. By the time our pre-registration phase was complete we had over 1,000 investors requesting early access to the campaign before it became available to all Seedrs investors. This gave us a lot of exposure across a number of channels, so that by the time the round launched publicly on the platform and our pre-registered investors had made their investments, we were already over 100% funded.
What has been the most significant positive outcome from your Seedrs campaign?
Thanks to our many Seedrs campaigns, we have over 1,800 avid supporters who continue to advocate for, and positively impact our brand.
Each campaign was also valuable for brand awareness and PR that lasted long after the rounds closed. We crafted a pitch video for each raise, which allowed people to really visualise our journey and our growth, and created a special relationship with the wider business community.
What was something you learned about crowdfunding that you didn’t know before launching your Seedrs campaign?
No matter what their ticket size, every one of your investors can be extremely helpful. We have had lots of great shareholders whose investments have made a direct and significant impact on our company’s growth over time. We make every effort to be as communicative and transparent as possible on our Seedrs’ discussion forums, even after the round has closed, to make sure that no inquiries go unanswered and to take the insights of our shareholders on board. We hadn’t anticipated how much value the crowd would add. It’s like having over 100 Dragons – but they’re much more supportive
To find out more about The Cheeky Panda, visit their business page.