Attracting Investors to Your Digital Business – Event Roundup

Attracting Investors to Your Digital Business – Event Roundup

23rd May 2016 by Simon Hiscox

On April 27th, Seedrs and digital agency Studio Graphene teamed up for an amazing event at Campus London. Three Seedrs Successes who have raised a total of £3.9 million between them on the platform came to share their advice with over 150 like-minded entrepreneurs and investors.

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If you couldn’t make the event, we’ve summarised the top five pieces of advice our entrepreneurs shared with the audience on the night.

1) “The people who you don’t expect to invest usually do, the people you expect to invest often don’t” – Roddy Campbell, Vrumi

Having ran and exited his own hedge fund business, Roddy Campbell is a real authority when it comes to raising funds. He discussed the importance of treating every potential investor equally, as you can rarely predict who will end up investing in  your business. If you are an entrepreneur who is in discussions with potential investors, note those who ask you the toughest questions as they often are the ones who are most likely to invest.

2) “Your first valuation is hugely important. If you’re too ambitious on the first, you’ll get caught out on the second.” Roddy Campbell, Vrumi

Valuations for early-stage businesses are notoriously difficult to assess (you can read our analysis on that topic here), especially if you are operating in a new or disruptive industry. The dreaded down round is something that most entrepreneurs will want to avoid at all costs, and a high initial valuation can catch a business out further down the line, when they haven’t been able to add considerable value to the business between rounds to justify the increase in valuation they need. Roddy’s advice is to be slightly conservative in the early stages until you have a better idea of the potential growth of your business.

3) “The role of your crowdfunding video is to read the full campaign” Tom Ball, NearDesk

We’ve previously discussed the importance of the campaign video in any crowdfunding campaign, and Tom Ball reiterated that when discussing his experiences with equity crowdfunding on Seedrs. Investors will often ascertain whether or not they would like to find out more about the business in the campaign based on initially watching their campaign video, so entrepreneurs should ensure the quality and information provided is high quality and informative.

4) “If you haven’t convinced your friends to invest in your company, why should a stranger?” John Goodall, Landbay

Having raised over £2.6 million on the Seedrs, John is one of the most experienced UK entrepreneurs in equity crowdfunding. John’s advice is simple but essential; crowdfunding is often a great way to validate your product – so if an entrepreneur is unable to convince their friends or family to invest in the business, it is highly unlikely that the business is going to be successful in a crowdfunding raise.

That isn’t to say that it won’t be a successful business. If the idea is very niche, requiring intimate knowledge of the industry, then perhaps investors with experience in this area may be what’s required.

5) “Giving away slightly more equity in the business to ensure you fund can be a sensible strategy” John Goodall, Landbay

Preparing for, creating and managing an equity crowdfunding campaign is a long and time-intensive task. For an entrepreneur to put all that work in, only to fall short because of a lack of equity offered would be a very frustrating experience.

John’s sage advice is to offer slightly more equity than the entrepreneur initially thinks, and then test it out on family, friends and peers to see whether they would invest at that level.

After all three entrepreneurs had taken the floor, we opened the floor to our audience for them to ask the entrepreneurs questions. You can view their answers in the event video below:

If you attended the event, we hope you had a fantastic time. For those who didn’t, be sure to keep an eye on our upcoming events to ensure you get on the guestlist.

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Simon Hiscox

Marketing Director

Digital Agency Kent