ECN International

Equity Crowdfunding: the secrets of creating a successful campaign

The importance of planning in equity crowdfunding
The stages of an equity crowdfunding campaign
The 7 Secrets to Bringing an Equity Crowdfunding Campaign to Success

Launching an equity crowdfunding campaign is not something that can be left to improvisation. Convincing investors to believe in the validity of a project has to do not only with the innovative scope of the project itself, and its sustainability in business terms, but also with an appropriate strategy that makes crowdfunding a structured project to be carried out in the best possible way.

The importance of planning in equity crowdfunding

Equity crowdfunding is a form of financing that opens up access for investors to a stake in a company in exchange for the cash needed to start or support a business project.

It is easy to see, therefore, how communication and marketing play a fundamental role in intercepting an audience of possible investors and convincing them of the validity of our project.

No matter how good an idea maybe, it will never be enough on its own to attract potential investors if we are not able to present it in the best possible way and let them see its potential in terms of economic return. Planning an equity crowdfunding campaign from a marketing and communication point of view, therefore, means, first of all, that the campaign itself will be made up of different phases that will have to be approached with specific languages and tools for each one.

The phases of an equity crowdfunding campaign

We can identify at least three phases that characterise each equity crowdfunding campaign and for each of them we must be ready to use the best marketing tools to make our project a success

Pre-campaign

This is the embryonic phase of our fundraising activity. In this phase it will be essential to focus on creating content, making contact with influencers and media, generating leads, building a database of contacts to be kept up-to-date, for example by sending out a newsletter.

Campaign launch

This is the moment of maximum visibility for our company, the moment in which we must capitalise (and this is the case) on all the efforts made previously, investing our energies to ensure that those who have been ‘prospective’ investors up until now actually decide to support our business. In this phase, the utmost attention must be paid to strengthening the relationships built previously and to developing adequate storytelling that can support the telling of our business plan.

Closing the campaign

Equity crowdfunding does not end with the end of the fundraising campaign. Whether the economic target has been reached or not, it will be essential to continue to nurture the relationship with your investors, be they real or potential.

The 7 secrets to a successful equity crowdfunding campaign

So, what are the secrets that can make an equity crowdfunding campaign successful?

So, what are the secrets that can make an equity crowdfunding campaign successful?

It may seem trivial, but identifying the correct amount of investment raised is far from simple. The risk of underestimating or, on the contrary, overestimating the value of the funds we are trying to access can have a very negative impact on our company.

There are many factors to be taken into account, and they go beyond simply covering the costs necessary to start up our project.

We must also consider all the marketing activities that we have carried out over time in order to intercept the public of our investors and the eventual capital tied up for the start-up of the preliminary phases of our project.

In order to define the amount of our fundraising campaign, it will be fundamental to understand how many shares of the company we will be willing to sell to our investors since this is what we are talking about when we talk about equity crowdfunding.

In short, it will be a question of finding the right balance between how much we want to raise, what the actual potential for raising money is that we can hope to access, and how much we are willing to give up in terms of shares in the company.

Doing this kind of assessment is not at all easy, and it will certainly never be possible to define a certain collection value in a scientific way, but only through a good level of approximation.

To do this, the best practice is to look at our own market. The identification of competitors, i.e., companies that have been involved in crowdfunding operations before us, bringing with them projects and corporate assets similar to ours, can be a valid benchmark to guide us in the choice of our funding objective.

There are many factors to be taken into account, and they go beyond simply covering the costs necessary to start up our project.

Doing this kind of assessment is not at all easy, and it will certainly never be possible to define a certain collection value in a scientific way, but only through a good level of approximation.

Creating a business community

Establishing relationships with potential investors means going beyond simply identifying a target audience of backers. In fact, those who decide to become interested in a start-up often do so beyond the possible financial return but are driven by a personal interest in the founder or the company’s mission. Therefore, being able to generate engagement with your company means creating the possibility of cultivating supporters and investors who will be able to help us in the various phases of the life of our business.

Using the right communication tools

Launching an equity crowdfunding campaign means opening yourself up to an audience of potential investors who would probably never have known your company. Clearly, digital platforms are preferential channels for developing these new relationships, but they are not the only ones. It is important to know that the different stages and interlocutors of our fundraising campaign must be matched by the same number of effective communication tools and techniques. It is very important to create contacts that are always unique and therefore personalised towards our interlocutors so that they can increase their perception of involvement in our company’s project. It is also essential to pay attention to the creation of a coordinated image of our company that crosses the different phases of the campaign and the different channels, whether they be social networks, emails, newsletters or the personal profiles of the founders.

Knowing how to adjust

There is nothing worse than losing sight of the progress of your promotion activity. If we have allocated resources, be they financial, time or human resources, to support our fundraising campaign, monitoring the activities linked to them is of fundamental importance in order not to waste budget and frustrate efforts. If we have started an online advertising campaign, for example, we will have to equip ourselves with tools that allow us to assess its performance and returns in terms of visibility and involvement. Even more traditional activities such as meetings with potential investors or PR opportunities should be carefully recorded, evaluated and catalogued in order to identify trends between those that are most useful for our purposes and those that are unsuccessful.

Planning a communication budget

Communication budgeting is not a simple matter. Many start-ups may not have the necessary resources to allocate. However, being able to stand out from competitors through effective communication is one of the best ways to succeed with fundraising. When evaluating the budget needed to support your communication, not only the costs of advertising planning should be considered, but also those costs that will be necessary to create graphics, pitches, slides and above all a good presentation video. A good methodology to cut costs is to consider all these elements as part of a modular structure, not only for the need for a coordinated image. For example, some clips of the corporate video can be used for social media communication, or some slides can be incorporated into the video or become images for a post.

Define roles

Building the path to our equity crowdfunding campaign is definitely a project that needs to involve everyone in our company. However, it is important that everyone has a clear understanding of their role and what their specific contribution is. It is therefore important to work with a balance between a broader collective involvement and the specific, individual contributions that make up the cogs of a perfect machine.

Planning for the aftermath

The fundraising round is not the end of the story. It is very important, right from the start, to be aware that you will have to work on maintaining the relationships that have been built. On the other hand, letting this precious heritage wither away would mean failing to cultivate many of the efforts we have put in and which could be revitalised in the near future.

This is why relationship and engagement are once again the two key concepts to focus on even after the end of our campaign. We tell our story, the journey that brought us here, we celebrate our success and we continue to engage with those who supported us, updating them on our progress and our next goals.

Storytelling that makes our business community feel involved and part of our journey is not only important for raising the capital needed to start our business, but will also prove vital for subsequent growth. SCAI Comunicazione is an agency specialised in equity crowdfunding, discover the world of marketing and communication services that we can provide for your company.