Launching a crowdfunding campaign: step by step

Lanciare una campagna di crowdfunding è una procedura fatta di molti passaggi che portano al momento di apparire online e raccogliere capitali.

For a crowdfunding campaign to be successful, worthwhile, and a positive experience for the company, it is essential to know and prepare in advance all the steps to be followed. Let's find out about them one by one.

Before you begin: prerequisites

Choosing to launch a crowdfunding campaign, for a company, should be the outcome of careful self-analysis. While it is true that crowdfunding is much more accessible than other possible funding channels, it is also true that it is not really for everyone. 

Figuring out whether a project is suitable for crowdfunding requires both in-depth knowledge of this tool and a thorough understanding of the project, the company, and its team: in short, getting a thorough and honest examination of conscience (our Crowdometer can help!).

Doing crowdfunding, in fact, requires marketing skills, human and economic resources, time to devote, willingness to put yourself out there and learn: all of these prerequisites may be present in different measures, but they must be there or must be able to be acquired. As with any other business activity, budgeting is necessary: to do this, find out how much it costs to do crowdfunding.

Performing this self-analysis also helps to calibrate one's expectations: a crowdfunding campaign is an investment for the company as well, it is not a lottery ticket, so what it returns is strictly proportional to what you put into it. Not just in economic terms, but in relation to all the prerequisites we have listed.

Before you begin: why do crowdfunding?

When embarking on any new activity in a business, it is important to know in which direction you intend to go so that you can plan a targeted strategy and monitor results. 

Crowdfunding should be regarded as a real line of business to which one should devote time and resources. For this it requires a strategy, which depends on the type of goal you set. Based on this goal, one can determine whether crowdfunding is the right tool to achieve it and which type of crowdfunding is best suited to do so.

For example, for a company that needs to make a new product usually reward crowdfunding is more suitable, while for one offering a service equity crowdfunding is more suitable, for real estate projects lending crowdfunding is particularly congenial, and so on.

We emphasize that the answer to the question “why do crowdfunding?” should never just be “to raise capital for goal X.” If we limit ourselves to that, we lose much of the added value that makes crowdfunding truly unique.

A crowdfunding campaign, in fact, is first and foremost a marketing tool, which allows one to create a network, indeed, if done well, a real community; to get in touch with professionalism useful to the company; to broaden the customer base; and to learn new things capable of supporting business growth. These elements should also be taken into account when choosing which crowdfunding path to take and which strategy to adopt.

Step 1: The regulations for launching a crowdfunding campaign.

The very first step in launching a crowdfunding campaign is to check the current regulations and make sure that you comply with all obligations. This point especially concerns equity crowdfunding, which is the most complex type and therefore subject to the most stringent regulations.

The main reference document in Italy is the Consob Regulations, which in its latest update absorbed the guidance of the European Crowdfunding Regulations.

Here are the main elements of the regulations to know and put into practice:

• obligation to include in its articles of incorporation the possibility of equity crowdfunding and related conditions (types and quantity of shares to be sold, rights and duties of investors, clauses, etc.);
• obligation to open a capital increase at a notary public, defining the scope of the financial transaction to be initiated;
• Obligation to prepare an offering memorandum with all the information about the offering that investors need to know.

For all types of crowdfunding, the 5 million per year crowdfunding cap applies.

Step 2: Choosing a crowdfunding platform

To launch a crowdfunding campaign, one must apply to one of the authorized platforms available in Europe. The European Regulation already mentioned allows all companies to launch campaigns in any of the member countries with the same rules, so first of all it has to be determined whether it might be useful to apply to a foreign platform to intercept an audience of potential foreign investors as well. This choice may also be motivated by the lack of options in Italy for some particular crowdfunding campaigns, for example Security Token Offering campaigns (we followed one with an Austrian platform).

Once the list of platforms available for the type of crowdfunding chosen has been gathered, the following criteria can be used to select the most suitable one:

• any economic sectors of specialization
• success rate
• fees
• support and services provided
• user experience
• collection mode (take it all oppure all or nothing)
• capital management methods (backing payment agents, timing, documentation, etc.).

When choosing the platform where to launch your crowdfunding campaign, it is important to remember that no portal will be able to replace the company in determining the success of the campaign, and that a larger user database does not mean that one platform brings in more investors than another: the companies bring in the investors.

It's not enough to choose a platform: you have to pass the selection in order to launch a crowdfunding campaign. Read our article to find out all the tips about this. Spoiler: the selection criteria largely overlap with those prerequisites that we listed at the beginning of this article and that are the basis of the Crowdometer test. To them must be added a convincing business plan and sufficient creditworthiness.

Step 3: Organizing the team

A crowdfunding campaign is not an activity to be done in the time slots stolen from normal daily operations. People on the team must be identified to take care of it and be responsible for it, with specific tasks for each and defined processes to adhere to, as well as time windows to devote only to that.

It is possible that all the skills needed to make a successful crowdfunding campaign are not in a company. It is possible that those skills are there, but one does not know how to use them for that goal. It is possible that people with the right skills do not have time to take care of an entire crowdfunding campaign themselves.

In all these cases, it is useful to consider relying on outside professional support, seeking the specialized advice of marketing and crowdfunding experts.

Step 4: Establishing time frames, goals, and conditions

Together with the platform, the company must set the minimum and maximum collection thresholds, the campaign launch date, and the campaign duration. Please note: This information can change. For example, if in the course of preparing the campaign you realize that you need more time for the preliminary stages, you can postpone the launch, or if during the campaign you feel the need to extend the duration to allow all interested parties to invest you can do so, or you can close the campaign early and then reopen it later.

Collection thresholds can also be adjusted before the campaign is launched, if in the preparatory stages expectations turn out to be too high or too low.

What cannot change, however, are the conditions set for investors and information about the investment: allocation of capital, shares (equity), interest rates, and amortization schedule (lending).

Step 5: Target setting

From this step on, work begins on building the communication strategy for crowdfunding.

Defining the target audience is crucial to choosing the most suitable channels and modes of communication.

Given that the main potential investors in a crowdfunding campaign are the sponsoring company's customers or potential customers, it is easy to profile the ideal target audience-every company should know its customers! One can then assess any other stakeholders to involve in the campaign (e.g., suppliers or employees).

Based on the outlined profiles, investors' rewards, i.e., the fundamental rewards that act as leverage for investment, should also be designed in this step. They can be reworked as we go along, but it is useful to define them as early as possible to facilitate the next steps.

Step 6: Onboarding 

The Onboarding phase consists of preparing the materials for the crowdfunding campaign.

This means preparing copy for each channel, building an editorial plan, creating lead magnets (e.g., ebooks, tutorials, statistics, etc.), organizing rewards, setting up the marketing automation software to be used, and tidying up the databases you already have.

If the website and social channels are starting from scratch, a break-in period in which to build and launch them may be necessary.

Step 7: Precrowd

This is the crucial phase for the success of any crowdfunding campaign. It is where all the activities of promotion, communication and interaction with potential investors that will be carried on during the campaign itself are initiated. With one difference: capital cannot be raised at this stage, so “expressions of interest” are collected.

The goal is to launch the campaign after you have already reached your target audience, have already informed and educated them about the project and crowdfunding, and have already deployed the levers of persuasion to stimulate interest in investing.

Step 8: Launching a crowdfunding campaign

Here we go. On the launch date, the platform will put the page dedicated to the project online and people can start investing. If the le persone potranno cominciare a investire. precrowd has been done well, there will already be plenty of users ready to become investors and the counter will go up immediately, triggering the herd effect.

To achieve the goal, one must continue with the activities broken in during precrowd and make direct contact with potential investors to lead them to the desired action. Sales strategy is crucial at this stage.

Last task not to be overlooked: always maintain contact with investors, during and after the campaign, so as not to waste the work done and build a solid, receptive and responsive community that becomes a real asset for the future of the company.