How to make an equity crowdfunding campaign successful

If there were a magic formula or chemical for making an equity crowdfunding campaign successful, equity crowdfunding probably would not exist. An emblematic feature of this tool, in fact, is its being very meritocratic: anyone can start a campaign, which turns out to be a test case for the strength of a business and the skills of the team leading it.

Bringing an equity crowdfunding campaign to success is therefore a learning experience for a company, whether small or large. It is positive market feedback, demonstrating customer interest in the proposed product or service; it is a field in which to test all internal processes, to strengthen brand identity and image, and to test one's flexibility. It is, ultimately, a resource forge of resources for the future (contacts, reputation, materials, know-how, etc.).

How to achieve this? Not only is there no magic formula, there is no one-size-fits-all answer either. The starting conditions and the ultimate goal are crucial in indicating the best direction to take.

What is certain, however, is that while some factors are subjective, optional, and variable, one can identify others that are critical to successfully completing an equity crowdfunding campaign.

There are indeed recurring best practices in winning campaigns, and while some involve concrete actions and practical choices, others, no less important, are more a matter of mindset.

We will start with the latter, which are part of the crowdfunding basics to have in mind before embarking on the journey.

Before we begin: understanding what crowdfunding really is (and what it is not)

It may seem obvious, but to run a successful equity crowdfunding campaign you need to be clear about the nature of the operation. More frequently than you might think, this does not happen.

Equity crowdfunding is often described as an "alternative finance tool", which in itself is not an incorrect definition. By itself, however, it risks confusing startuppers and entrepreneurs approaching this opportunity. Commonly understood financial instruments, in fact, are at the heart of mostly purely economic, if anything political-economic, operations and strategies with a good deal of bureaucracy.

Approaching crowdfunding only in this way comes dangerously close to failure. Equity crowdfunding, in fact, is not a financial operation, but first and foremost a marketing operation.

Like all marketing operations, the goal is to sell. But what? The company itself! Investors who participate in the campaign buy shares in the company, so what is being sold is not the product or service it offers, but rather its image, its soundness, its prospects for the future, and its bond with its shareholders.

While the bank wants to read all of these things into a business plan, for the investors it targets in crowdfunding the business plan is a dry document incapable of communicating anything to them for real.

The business plan is important, no doubt, and must be well done, as must the rest of the paperwork; but it must be embedded in a much broader marketing operation based on more effective and far-reaching communication tools.

Before you start: allocate time and budget

Another belief that needs to be shaken before launching an equity crowdfunding campaign is the idea that it is a collateral, marginal activity that can be done in the scraps of time by simply doing a copy-and-paste of the normal activities of the corporate team.

Wrong. Those with this belief take the crowdfunding campaign lightly and are very unlikely to achieve success. The campaign should be regarded as a new line of business, so define ad hoc processes, well-divided roles, specific actions, periodic progress checks, and, of course, a dedicated budget. A separate article focuses on this last, sensitive issue.

All of this requires a significant amount of staff day time, which needs to be reorganized (and if necessary expanded). 

The secret to a successful equity crowdfunding campaign: playing in advance

With a metaphor that is dear to us, we can say that the secret to winning a game is to have a good practice. Intense, constant, well-planned.

For equity crowdfunding, this translates into starting to build your network of target stakeholders long before the campaign launch . What does it mean to "build the network"? Identifying the target audience, reaching out to them and connecting with them, informing them and making them aware of the existence of your company, its distinctive features and why they are interesting to them.

Equally important is to clearly explain what crowdfunding consists of, what the benefits are for investors, and how and why to participate. Investing in equity crowdfunding is not something you decide overnight: the decision-making process takes time and you need to accompany each stakeholder step by step so that he or she gets to the bottom of it. That is why it is crucial to start very early.

Si tratta di “scaldare” il proprio pubblico per legarlo a sé e renderlo pronto ad agire all’apertura della campagna.

Addressing the right people

In order for any preparation not to be in vain, it is essential to direct one's efforts in the right direction. "Shooting the crowd" at random, that is, making a generic communication and not properly selecting the advertising target, is extremely inefficient.

To gain interest in your campaign, you need to target some specific categories of people:

• customers;
• potential customers;
• stakeholder (suppliers, collaborators, etc.).

They are all individuals who already have an interest in the company or in the product/service it deals with. Therefore, an interest in that business and its prosperity. Something that, on the contrary, generic users of the crowdfunding platform hosting the campaign do NOT have: anyone expecting to make a crowdfunding campaign successful thanks to those users will be greatly disappointed.

To distinguish marketing and sales

To build a linear path to guide potential investors, it is necessary to separate the process into two phases: the first, marketing, involves communication and information, making contacts, and screening target subjects based on demonstrated interest; the second, sales, involves direct one-to-one communication with subjects who have passed the selection, aiming to finalize the investment.

Overlapping marketing and sales or skipping one of the two phases exposes to the inevitable loss of pieces along the way (contacts, opportunities, etc.).

To use all available tools

An equity crowdfunding campaign takes place primarily online. However, this doesn't mean that the only tool to use is social media. They are important and should be maximized with widespread, frequent, clear, and friendly communication, while maintaining authority.

To build a relationship with people, however, it is necessary to act on other fronts, such as newsletters, webinars, and various potential lead magnets. And to personalize and make these tools more effective, CRM and analytics software are crucial. These allow a detailed understanding of the target audience, analyzing and categorizing it, to interact with each segment differently

But the online world is not the only one. To instill trust in potential investors, it is essential for the team to directly engage with the project, whether through personal communication instead of anonymous online interactions, speaking on the phone with individuals, or, where possible, organizing events to meet them.

In conclusion, while it's true that there's no formula that guarantees absolute success, there are indeed many strategies to come close to it. These are reference points that all aspiring 'crowdfounders' should always keep in mind.

Li abbiamo approfonditi e ampliati nel libro di Turbo Crowd, il primo romanzo-manuale sul crowdfunding italiano.