Seedrs is an equity crowdfunding platform and a sponsor of this year’s Northern Stars pitch competition, so we asked them to tell us what makes for a great crowdfunding pitch. Here’s what their campaign development associate Chris Rea had to say.
Seedrs is the most active investor in private companies in the UK*, so my role as campaign development associate means that I meet with hundreds of business owners to discuss raising money through equity crowdfunding.
To separate the good entrepreneurs from the great, I often find myself asking these four questions before making a decision on whether they are right for the Seedrs platform, and equity crowdfunding.
1. Can investors understand what the business does?
In my opinion, the campaign video is the most important part of a crowdfunding campaign. This is the first thing an investor will look at, so if an entrepreneur can’t get the message across in a three minute video, it’s unlikely investors will read the rest of the pitch. My advice to entrepreneurs is to create a clear and concise video that explains your business to someone who has no previous knowledge about the industry your business is in. If you’d like to learn more about creating a great crowdfunding video, click here for more information.
2. What are your accomplishments to date?
Investors love to see that a business has already demonstrated traction prior to raising money. To be successful on Seedrs, entrepreneurs really should show that they’ve done everything they can with the resources they’ve had available to date.
Businesses that can show that their idea has already gained momentum are going to get investors excited. Hearing about accomplishments such as revenue growth, new customers, an increase in downloads or great press coverage always make me think that the business could be a great fit for early-stage investment from the crowd.
3. Who might your investors be?
When talking to a business, I often think about where their investors could potentially come from. Some of the questions I ask myself are:
- Do they have a large number of users?
- Is the industry they work in a particularly popular one for VCs at the moment?
- Would this business be well-suited to crowdfunding?
- Have they asked their own network if they would be interested in investing in the campaign to gauge interest?
If the answer to these questions is ‘yes’ then the business stands a great chance of succeeding with equity crowdfunding.
4. Are you willing to hustle?
Equity crowdfunding is not an easy route to finance; at least it’s not any easier than other forms of raising investment. Entrepreneurs can’t just create an online campaign and hope for the best. It’s an avenue that can be extremely rewarding and it can be hugely beneficial having hundreds of advocates behind your business, but business owners must be willing to get behind the campaign with full force to really harness the streamlined efficiency of the platform for getting investment quickly.
Entrepreneurs should do all of the things they’d do to raise investment offline – like book investor meetings, present at pitching events, increase social activity and PR presence.
Entrepreneurs must have a clear plan in place for how they will launch and manage the marketing of their campaign from day one to ensure they hit the ground running.
How it works at Seedrs
All campaigns are assigned a campaign success manager who will be able to give advice and guide entrepreneurs through the preparation process. We’ve seen hundreds of campaigns succeed on the platform and we have a pretty good idea of what it takes to raise a round online, so do let me know if you’re interested in learning more about how it can work for your business.
If you would like to talk more about developing great crowdfunding campaigns, feel free to contact me at firstname.lastname@example.org
Some Northern tech businesses on Seedrs
Since Seedrs launched in 2012, we have helped a wide range of businesses based throughout the North of England raise investment through the platform including:
- Stockport based peer-to-peer lender Assetz Capital raised £3,258,510 in 2015 and have recently gone on to win the Credit Strategy Best P2P Lender award, beating UK fintech giants Funding Circle in the process
- Coacher, a Sheffield based business looking to help football coaches improve the quality of their training, raised £110,288
**Beauhurst report – The Deal H1/16
Find out more about Northern Stars 2016 – apply now to take part, or sign up to attend the regional heats and Grand Final