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INVESDOR INSIGHTS | 18.10.2019
At Invesdor, we want to help great businesses achieve great growth. The way to this is through a well-planned and successfully executed fundraising campaign.
Before planning your fundraising campaign, consider if it’s the right solution for you. The Invesdor platforms, for example, provide access to crowdfunding enthusiasts, venture capital investors and business angels. The audience is varied but all of them expect success - both retail and professional investors want to make profitable investments. That’s why your company should seek to grow.
If you think you have what it takes, give us a call. If you’re not sure, give us a call anyway - we’ve worked with a broad spectrum of companies and seen successful funding rounds from a variety of fields. Everything’s possible with the right plan and enough commitment!
A typical time for a funding round is when a company is looking to grow. Launching a new product, expanding to a new market, starting a new part of your operation: these are situations that require added capital.
Before you start your funding round, you should have the following things planned and figured out.
Focus. The funding round will require your attention, resources and effort. It is not just a fundraising push, it is also about marketing and fostering credibility. So make time for it.
Story and vision. You need to convince investors for them to put their money in you. Be prepared to tell about your company’s background, it’s story and it’s vision. You should be able to tell them where you want to take your business, what are its long-term goals, how do you plan to change the world, etc.
Base funding. You benefit greatly from having some angel investors keen to back you up. Most people are skeptical about being the first to invest, so you need a few believers to get you started. The chances of a successful round are much higher if you go public only when you have about a third of your goal already secured.
Team. The company’s leadership is an important factor in convincing investors. Make sure the core team has solid LinkedIn profiles and they are ready to market the funding round on social media, in events and through their personal networks.
Presenting your product or service. You need a clear, convincing description of the product or service your company offers. Explain the problem it solves, what data you have to prove it’s quality, what research you have showing there could be a market for it, etc. The exact details depend on how far along your product is.
Marketing plan. Plan what channels will you use, what materials you have and what you’ll need to create, what your budget will be, etc. Consider creating a campaign video: it can be a great way to deliver information, personality and visual support to your pitch in a neat package. Reach out to the media: many journalists are interested in growth companies.
Valuation. You’ll need to provide certain basic company information for the funding round, including the company’s valuation. Expressing your business through a single figure might feel difficult but don’t worry: there are expert methods for this. Be realistic in your valuation: a little optimism and self-confidence doesn’t hurt but overblown figures are misleading and erode credibility.
When your plan is solid, you can begin preparing. There’s no single way to create a good funding round, but there are some things we recommend. First, be concise: try to crystallize the necessary information of each item into one or two paragraphs. Focus on what the investor needs to know.
Second, test your pitch. Get an outsider’s opinion. We are here to help: we can offer input or put you in touch with professionals who can review your materials. If you have a marketing or PR partner, don’t be afraid to consult them.
Third, and most important point: always be truthful. Do not leave out relevant facts about your company’s outlook. Problems tend to come to light eventually: if you’ve misled your investors, you lose their trust, take a reputation hit, and might face legal repercussions. Besides, you shouldn’t be afraid to tell it like it is: investors appreciate balanced information that helps them understand the big picture.
Once you have tested your pitch, it’s time to execute it. There’s some tips we want to share with you on what to do during the round - and what to do after it.
During the round:
Be active. Tell your fans, partner companies, potential investors, journalists and everyone about the ongoing round. Use your marketing materials and get your message out there. Share the pitch on social media and get your network talking about it. An active company can be the difference between a failed round and a successful one - or an “ok” round and a great one.
Track your marketing’s success. Especially online marketing benefits from a range of analytics tools. Set up your metrics, review them regularly and replace failed efforts with something new. Set realistic goals for your marketing and sit down regularly with your team to follow up how close you are to reaching them.
Be ready. World keeps spinning during the round. React quickly to interesting developments. If a journalist shows interest, prioritise it - don’t miss a media opportunity just because you didn’t take the time. Follow industry news and look for something you could turn to your advantage. Check your channels for questions related to the round and respond to them.
After the round:
Communicate. Investors rarely complain that they get too much information; often they would like more. Update them on how your plans are progressing. It’s possible you won’t be able to execute the exact plan you presented during the funding round. It’s not the end of the world, but explain these changes clearly and in a timely manner to your investors.
Make use of your new network. Your investors expand your professional network with people who have a stake in your company and want to see it succeed. This group likely includes people with access to new resources and opportunities. Meet up with your investors, get to know them and explore the opportunities they might offer.
Work hard and deliver. Your pitch is a promise of sorts. Your investors believe in you and back up your efforts with their capital. So live up to your promise and work hard to fulfill it! And remember, just like in all business, it’s all about building trust: you want a good reputation if you need funding again in the future.
These tips are just a glimpse into the world of fundraising. We would love to hear from you and help you arrange a successful campaign that helps you raise your business to the next level. Contact us and let’s talk more!
The information contained herein is not meant to be, and it shall not be interpreted as investment advice or a recommendation and investors must neither accept any offer for, nor acquire, any securities unless they do so on the basis of the information contained in the applicable investment material of a target company. Investing in securities of unlisted companies is associated with high risk.