Need to prepare a fundraiser! A strong trend in our economies, crowdfunding or crowdfunding is becoming a real option for start-ups and seed capital. The project leader’s involvement in the preparation of his fundraising campaign is essential.
1 – What is Crowdfunding?
Crowdfunding allows multiple contributors of funds to invest small amounts specifically in projects registered on innovative Internet platforms. These savers have the possibility to choose the final destination of their money (company, creative or social project) in a number of forms: with counterparties with donations or subscriptions, or with counterparties called “production” (crowdfunding). Equity (crowdinvesting), remunerated debt (peer-to-peer lending), or even in the form of unrestricted solidarity loans (social lending) with equity investments in a company’s capital.
In general, the term crowdfunding is used to designate all the categories of proposals presented above.
2 – Prerequisites
a) Clearly, the minimum prerequisite assumes an actual project, a clearly identified need. When looking for new shareholders, a well-crafted business plan, ambition and/or experience with a solid management team, governance and clear objectives is essential. , often with legal backing.
b) In order to achieve efficiency and visibility, it is customary for the project leader to equip himself/herself with an Internet campaign-friendly means of communication: an attractive website and/or a blog (on a case-by-case basis when defining this) considered) communication skills); Mostly a presentation video (non-financial) and a professional social media presence; visual aids; Possibly press interviews, etc.
c) This is when the project leader will be able to select the level of support desired as well as the level of support he needs, between multiple platforms, and will be able to request access to them.
3 – Pre-Fundraising Campaign: The Critical Stage
a) Once registered, the participation of the project leader is crucial, especially during the critical phase before the launch of their crowdfunding campaign. During this phase, he takes the time to build a minimal base of his community, very actively urging his first circle of support (family, friends, or professionals) to join the platform to support or invest in him. does. He then participates in attracting his second circle of supporters, Friends of Friends, eventually seeking out his larger third circle of supporters to use the platform.
b) The project leader promotes the unique added value of his project to his various supporters and demonstrates what the contributors can expect in return.
c) Due to time constraints and often experience with this new tool, an internet platform, many project promoters sometimes do not have a very precise vision of the segment or area to be targeted, the desired support profile and the exact amount Is. to be raised. The project leader therefore has the opportunity to refine their criteria and their strategy for exchanges during this pre-fundraising campaign.
d) The conversation allows him to test with his community how much money he will try to raise.
e) The Project Leader may define the shareholder’s exit strategy and details regarding the liquidity of the securities, if applicable. Similarly, he can commit to a reporting schedule.
f) It is thanks to the analysis and distinction of its community between those who, for example, showed their support by a click on the page of the project, and those who have the business of bringing in the money actually sought, that the project leader Being successful in your fundraising campaign is able to target specific profiles of members, region, even country.
4 – Marketing Operation
a) If the project leader plays an important role during the pre-campaign phase, it is the same during the fundraising phase. The first vector of communication being the project leader himself, it is by a snowball effect that he will draw his circles of support.
b) He remains active throughout the campaign process by animating his community, financially or otherwise.
c) This certainly requires time and resources, but beyond a hindrance, using crowdfunding is a great opportunity for the project leader to get a community, know it better, analyze it. Thus crowdfunding contributes to increasing customer loyalty and/or identifying new customers who will use the company’s products and services again.
d) Much more than fundraising, crowdfunding is a marketing operation in nature.
5 – Success Tips for the Project Leader
On donation platforms, subscriptions with counterparties (such as Ulule, Sponsum, KKBB or Arizuka), it is this type of project that takes precedence. The same is true for Solidarity loan platforms (such as Babylon or Halomercy), whose model is not necessarily based on the principle of support of circles.
The project should also be financially attractive on equity platforms (such as Wiseed or Anaxago). In some cases, it can be difficult for a project leader to communicate to members of his restricted circle of supporters on financial aspects or on the highly technical features of his project. He must then prove to potential investors that the company has been or is solid in the market for some time. Compensation practices are sometimes specified for the management team.
Many of these equity platforms, such as the German Seedmatch, are above all marketplaces. I would advise project leaders who are members of these platforms to work on their first circle of support, making sure to keep documentation material (presentation of company, team, etc.) of immutable quality online. A small tip to keep in mind would be: “Why would people invest in my company and not other project leaders who are members of the same platform” ,
Platforms must communicate their responsible and reliable practices, and provide guarantees in the event of closure. At the heart of this still emerging ecosystem is trust. This is important and nurtured by mutual transparency among stakeholders. Forums, project leaders and their supporters work together to transform a social link into a solid economic link.