Crowdfundamentals- Getting Started
A wise man said, “The hardest thing about getting started, is getting started.” That wise man was Guy Kawasaki; Former Apple chief evangelist, Pandora investor, Google adviser to Motorola and pitch deck genius. Few things are truer than this statement. Going to the gym , writing a blog post or trying to raise capital, getting started can be a road block. With an abundance of information to present, knowing where to start can be overwhelming. How can companies narrow down what is important right now? Here are 3 steps to getting started.
During our exploration for the Crowdfundamental series, we’ve talked with experts in start-up funding to get an understanding of what works. When asked where to start when considering an equity crowdfunding campaign, 3 areas seemed to reign supreme.
The Right Idea
Just because you think your product or service is an ingenious one doesn’t mean everyone else will. Make sure you do research to understand what market you will best serve. Leigh Lepore, CEO and Founder of Crowdfunding Strategy and Information, believes this is the critical first step in successfully attracting the right investor. “Having a great product really sets the stage for critical next steps.”
While you want to prove your market worth with data, don’t be afraid to add some relatable tid-bits. Taken directly from Guy Kawasaki, he says “A better way to attract investors is to enable them to do their own calculation and end up with a fantasy. For example, there are 300 million Americans, and one in four owns a dog. That’s 75 million dogs that need two cans of dog food per day. That’s a market of 150 million cans of dog food per day–the kind of fantasy that got Pets.com funded.”
Ruth Hedges, Crowdfunding Education Ambassador and Consultant and CEO of Crowdfunding Roadmap, Inc, said “It is valuable to create momentum going into the public ask. Have 30% raised before you start. If investors see you are already a third in the first day they want in on the deal.” This tactic will show potential investors the inherent interest in your idea from the community. According the Fundly, “Campaigns that raise 30% of their goal within the first week are more likely to succeed.” Leveraging your personal network is a great way to achieve this first push of funding.
It isn’t enough telling investors why your idea is so groundbreaking, you need to show them. Show your company’s progress by showcasing the rise in website visits, sales growth or positive reviews. Even a spike in social media following will prove the value in your offering. Investors are betting on you and your offering. The more solid evidence you have to back you up, the better.
In equity crowdfunding campaigns it is all or nothing. It is critical to set the right funding goal and ensure you can meet it. While these points are focused on how to get a campaign started, communication throughout the entire process is critical as once the campaign is over investors can choose not to complete the transaction resulting in loss of funding. When done right, a crowdfunding campaign will take a startup to the next level with a balanced equity share and funding ratio, engaged and passionate investors, and founders ready for the next level.
Over the last ten years, Quicksilver has been helping companies polish their proposal responses and presentations. We are leveraging our industry knowledge to help create engaging and successful equity crowdfunding campaigns.
Can we help raise a million?
Need help starting your crowdfunding campaign? We’ve got your back. Contact us today to see how we can help you get started.