The recipe to raising $288,573 from the crowd (using baguettes)
Since we launched in December 2014, a lot of our users have asked if they could invest in our business, Poparide. In 2015, legislation came into effect in Canada that allows selling of shares to “the crowd”.
We thought: this is perfect, we can raise funds directly from our own users! In the Spring of 2016, we approached FrontFundr, Canada’s first equity crowdfunding platform, and set out to raise $250,000.
We ended up raising $288,573 from 151 investors in three months.
Here’s our (not-so-secret) recipe.
Tell your story
Let’s face it, when you’re raising money from the crowd, people are going to be investing in you and your team, not just your revenue. Telling your story is the most important piece of winning over people’s hearts. Ideally, do it as a video on your campaign landing page.
Lesson: make sure you tell a story that inspires people.
Focus on the crowd
In the early days, we focused on getting angel investors from Vancouver and Seattle. These meetings yielded no investments (here’s why).
We decided to change our strategy to focus solely on the crowd by engaging directly with our users through events and one-on-ones. And, it worked!
Lesson: it’s called crowdfunding for a reason.
Referrals, referrals, referrals
Once you have a few investors that have come in, ask them to send the campaign to their friends. Your investors are your best advocates, and will legitimize the investment. Plus, they probably have like-minded friends.
Lesson: build a referral program for investors.
Befriend the crowdfunding peeps
We built a close relationship with FrontFundr, who helped us get the word out on various initiatives (events, social media, etc). Having a direct line to the people in charge of your raise will help you process investors quicker, especially when there’s over 150 of them!
Lesson: build a relationship with people who know the process.
Produce compelling content
It feels like in 2016 this is an obvious one, but don’t underestimate the power of content, and make it relevant to the people you are targeting. We used a mix of video, Facebook promoted posts, emails and blog writing to get the word out. It took several pieces to convince each investor.
Lesson: use original content as a lead generation tool.
We used Streak CRM to track our crowdfunding leads and convert them into investors. We sent them regular communications and tracked their progress through an investment funnel. We created different investor tracks and crafted bespoke communications for each. This led us to convert more leads into investors and give us an indication on the size of the pipeline.
Lesson: track your campaigns and have a strategy to convert investors.
Be patient, people will invest last minute
We live in an on-demand, last-minute world, where people can take an action at the touch of a button. As such, most people will wait until the last days of your campaign to invest. We got over $150,000 in the last week of ours. In the last few days, we put all our efforts in reaching out to people and getting them to complete the process.
Lesson: clear your schedule for the last two weeks of the raise.
Use your secret ingredient
Ours is handing out free, hand-made baguettes at every event. This is part of our brand (we eat baguettes in the office all the time) and will give investors a glimpse of what your team culture is like. It’s also a great way to get people to come and listen to your pitch.
Lesson: find something that’s unique to your brand and use it!
Have some fun
Most importantly, don’t forget to have some fun in the process. It’s going to be hard work, and you’ll hit lots of bumps along the way, but you need to believe in it. It was a rollercoaster for us but what kept us going was our team and our “anything is possible” attitude.
Lesson: surround yourself with believers!
Lastly, there is not one recipe to doing this. Much like everything else when you’re running a startup, you’ll have to figure out what works for you.