SHORTEX is a company that provides you the tools to raise money from a wider pool of investors than you would normally be able to. Our primary goal is to remove friction and safeguard the fundraising process. Further, we also connect you to a wide community of investors. The key to getting you supported is momentum and validation. Moreover, conversion from prospective to devoted investor changes dramatically after you have hit your fundraising target. It's vital that you hit the goal as early as possible in your campaign, preferably days after you go live to the public. So what is the process?
1. Decide whether crowdfunding suits your business goals by considering the following questions:
- Are you familiar with investors who you potentially can count on?
- Do you have access to any of the other investor networks? It could be friends or family.
- Is your pitch able to generate buzz or traction?
- How many users does your product have? Is there any feedback?
- Is it just a beginning for your company, or it's already in action and showing stable, easy-to-track results?
If you are feeling unsure or skeptical about some of these questions, unfortunately, you're not ready for crowdfunding. 2. Have a number you plan to fundraise in mind.
The risks of not achieving the goal are very high if your pre-fundraising expectations are too high either. However, if the target is too low, your business might not seem credible. This is the most critical decision every start-up has to make. The number you're going to end up with is a combination of two factors: the amount you need (top-down) and the amount you can almost definitely raise (bottom-up).
If you have raised money already, go back to the investors you've worked with and ask if and how much they are prepared to take part this time. Consult with the team and poll your immediate network (friends, family, and close business contacts). Create a survey where people can indicate their interest in your project and the amount they are ready to invest.
Go through the same process with the most active users and customers.
Next, calculate the amounts you have and apply at least a 50% discount to the final figure, especially if the majority of respondents are not professional investors. Our recommendation is that the crowdfunding target is twice the amount of discounted final figure you already have. Make sure this figure aligns with your requirements; otherwise, make sure you get more commitments before the final pitch. 3. The pre-launch time is great for you to work on the pitch. Consider the following:
- Market overview
- Business goals and future plans (for the fundraising and beyond)
- A high-level presented business plan
- Include a detailed business model that also drives your balance sheet and profit&loss statement (Include financial projections)
- Team resumes
- Legal due diligence evidence
While you are working on these, contact the platform and go over the pitches of other partners, you can also request their business plans. In addition, talk to entrepreneurs who failed and succeeded in crowdfunding. 4. Produce a video
Watch examples of crowdfunding videos from agencies and freelancers who have done them before. Choose a team of professionals who can execute the ideas you have in mind.
Make sure you meet them before the process of production begins. It's beneficial for the editor of the video to be involved in post-production since it makes the process a whole lot easier. Write a script that is detailed enough. Avoid the bullet points you could just talk around, be specific and give as much detail as possible. Include mentioning people, locations, graphics, key messages, product demonstrations, proof of delivery or anything else you find relevant. Don't hurry into shooting because, most likely, you're going to waste time and money. 5. Prepare your marketing, advertising, and communications plan
Use your Gmail and LinkedIn contact lists as a starting point for a comprehensive email marketing strategy for the duration of the fundraising process. Complement that with targeted ads on the most suitable platforms. Be prepared to raise awareness about your campaign and facilitate your network and team to do the same. In addition, create a detailed and easy-to-navigate content plan that is aimed at the on-going conversations about your pitch, campaign, and product. Your presence on social media has to be noticeable, vibrant, and loud. If there is such a possibility, coordinate significant releases of products, announcements of partnerships, or any other major milestones so that they fall into your plan, create publicity around them. 6. Reach out to more investors.
Tell everyone to invite others to come in, get to know new angels and funds. Build a pipeline as wide as possible and strive for early commitments. 7. Make sure your team is ready
You need to have at least one individual who will be focused almost exclusively on the process of fundraising, but preferably you will need help from more team members to manage content creation, incoming business plan request processing, community discussions, and email campaigns. 8. Coordinate and agree on everything legal with the platform you're raising funds at and your existing network of investors
Make an appointment with your lawyer, and be always ready to make changes to your articles and possibly your current investment contract/agreement. Private launch
You can activate your pitch in private mode once it's approved, and the video is ready.
You can now start receiving pledges for funding, without releasing the round to the public. The very first results will be visible, and you can amend anything if needed. 9. Start getting investments on your pitch.
Now you've got to facilitate all the people who previously told you they'd like to contribute to do that urgently. Let them know you're going to activate your pitch in private mode in advance and give them a couple of days to get their funding in. This is where you either achieve your goal or fail. You will see if your campaign is functioning.
Did you achieve 50%? If so, amazing! Proceed to the next step. 10. Public launch
At this point, you want to create as much buzz as possible. Activate your campaigns, hit all of the channels you've chosen, and generate publicity around your concept. This is your primary objective for the next six weeks, and you're going to pour all your resources into blasting through your target and receive overfunding.
- Execute your marketing plan on and off your pitch page.
- Continuously meet with investors. Make their early commitment to the fundraising your major priority.
- Use every networking opportunity and always be pitching.
Did you achieve the target? Brilliant! Now you're in overfunding mode. During this time, things get a lot easier. You'll notice people who you had a conversation weeks ago, suddenly starting to invest. Platform investors are beginning to come in with even higher amounts and it all feels better. This is because they started noticing validation by others. However, you have to stay focused. This is the step where crowdfunding proves its true value as you'll start receiving investments that wouldn't be received otherwise. Continue executing the plan, creating awareness, and train the team. Closing
The final step, as in any traditional fundraising, is signing documents, receiving money, and submitting forms to Companies House. Make the most of having investors as advocates by engaging them and harnessing their enthusiasm.
Crowdfunding became a crucial financing resource for any start-up; it raises vast amounts of capital and helps you to share the success of the business with your closest supporters. But, just like conventional fundraising, it's hard work and requires meticulous planning and execution. We hope this post will allow you to work through that process.
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