In the year since Seedrs launched, we have been learning constantly what differentiates successful from unsuccessful campaigns. The more we learn, the more we try to communicate to the entrepreneur what does and doesn’t work so that they stand the best chance of raising the funding they are seeking.
Today, we are publishing a new set of tips for entrepreneurs who want to create equity crowdfunding campaigns. We have revamped the page that an entrepreneur lands on when getting ready to create his or her campaign, and so that everyone has the chance to see it, we thought it would be helpful to re-print the instructions here:
Create a new campaign
In order to raise capital for your startup through Seedrs, you need to create a campaign page. Your campaign will include information about the business, as well as how much money you’re seeking in exchange for how much equity. Investors will decide whether to invest in your startup based on your campaign.
You can save your draft and come back to it at any time, and nothing will be posted for investors to see until after you’ve submitted your final version and we’ve reviewed it.
1. You will need to generate momentum in order to succeed
We have an extensive base of investors who are looking to invest in great startups through Seedrs. However, virtually all of them want to see that you can generate interest and momentum behind your campaign before they are willing to invest. If you can’t bring in at least 30% of the capital you are seeking, you are highly unlikely to hit your funding target. To understand why this is the case and how our investors behave, we strongly recommend you read this blog post about momentum.
So how can you generate that momentum? There are two complimentary ways that you can work to build momentum:
Blood, sweat and tears.
The way that most entrepreneurs succeed at crowdfunding (be it rewards-based, like Kickstarter, or equity-based, as on Seedrs) is by working harder than they have ever worked before to drive their extended networks, members of their communities and complete strangers to back their campaigns. This doesn’t just mean getting £50 from Mum and Dad or putting out a few tweets; instead, it involves a relentless effort of reaching out to everyone you know – and many people you don’t – to enlist their support and capital.
Among the things that the entrepreneurs behind successful campaigns do are:
- E-mail the URL for their campaign to friends, family, colleagues, customers, acquaintances and pretty much everyone else in their contacts, asking them to check out the campaign and consider investing;
- Attend as many networking events as possible, asking each person they meet to check out their campaign and consider investing;
- Leverage social media with a sustained and wide-reaching effort to make people aware of and, most importantly, excited by the campaign; and
- Conduct a PR effort, getting publications and blogs that are likely to be interested in the business to write about the campaign.
Basically, you have to hustle, and the more you can think of to do to get people’s attention (without harassing them of course), the better.
Another powerful approach you can take is to line up a small number larger investors to anchor your round. If you coordinate it so that the angels make their investments via your Seedrs campaign in the first few days after it goes live, many of our base of investors will see that as a strong an indication of support and traction. If you do bring large investors to your campaign, you should note that:
- We are happy to provide a customised service in respect of the investments made by those investors.
- If you and the angels so desire, the angels are welcome to hold their shares directly as opposed to through our nominee structure. This means, among other things, that we won’t charge them the investor carry on their investments.
If these special arrangements may be of interest to you, please just contact us before you submit your campaign for review, and one of our team members will be in touch to discuss the details.
Whether you choose to drum up the crowds, bring a few angels or (ideally) do both is up to you. But we cannot emphasise strongly enough that you will need to do at least one of these to stand any chance of funding. If you’re not prepared to do so, please don’t waste your time creating a campaign as it will not be successful.
2. We will review your campaign in detail
Once you submit your campaign, our team will conduct a comprehensive review of it, and it will only go live if we approve it. This review process can take several weeks, but we endeavour to complete it as quickly as possible.
Part of this review is so that we can approve the campaign as a “financial promotion” for regulatory purposes. We must conclude that your campaign is “fair, clear and not misleading” before we can let it go live, which means that:
- We need to see evidence to support certain statements you make certain things (you will be asked to submit this evidence in certain places when creating your campaign, and we may request additional materials from you during our review); and
- We may need you to modify the way you describe certain things.
But we also review campaigns with an eye to what our investors are likely to find interesting. While we do not ordinarily make a judgement about the quality of your business – as we believe that that is for investors to decide – we do make a judgement about the quality of your campaign. If we don’t feel you have provided investors with a compelling and engaging presentation, we will not approve it.
3. You will need to create a video pitch – but please wait!
If we approve the written part of your campaign, we will invite you to upload a short video pitch onto the platform. While doing a video is optional, it is nearly impossible to fund without one, and you would be foolish not to make one.
Just as with the written information you provide, we need to be able to approve everything you say in your video. For that reason, we strongly suggest that you do not begin to actually create your video pitch until after we have approved the written part of your campaign. That helps avoid the risk that there’s something in the video that we can’t approve, meaning that you’d have to do it all over again.
However, that doesn’t mean you shouldn’t start to think about what the video will look like, and line up a great videographer who can help you create a fantastic looking video. You should expect to spend as long on the video as you do on the written part of the campaign.