Crowdfunding – Working Your Network.
Many of you will know that one of the keys to a successful crowdfunding raise is your ability to bring a fair bit of the crowd, and their wallets, to your campaign. Opinions differ as to what proportion needs to come from your own networks. Some while back, if pushed to a number I would then have suggested say 30%+. However other industry commentators advocate much higher numbers, even double that or more depending on the nature of the business proposition. Whatever the figure is, there is certainly a lot of anecdotal evidence clearly showing the higher proportion you can introduce the better. Naturally there are a lot of variables to consider such as market sector, the maturity level of your business proposition and your business traction to date. However irrespective of the size and financial status of your network, communicating and engaging with that network is critical if it’s to be of any use to you. For avoidance of doubt, engagement isn’t a passive activity and sending off a three-sentence email isn’t communication.
If you’re planning a crowdfunding campaign and need help and guidance around how to develop, cultivate and work your network, that’s something we here at IdeaSquares can discuss with you.
Having been around the startup and crowdfunding scenes a while now, my observation is that typically businesses take way too long to start talking to their networks about what they’re doing. Same story when businesses are marketing and building their prospective customer bases. Often there’s some sort of precipitating event….or a platform catches fire….and suddenly there’s an imperative to start talking to people urgently. Problematically, this is usually associated with needing these people to do something, which might be support a crowdfunding campaign or buy your service, and for them to do that now. Such time constraints aren’t helpful for various reasons; people often don’t respond favourably to time pressures. And especially if you are crowdfunding, your campaign-clock will be ticking; you won’t have the luxury of time.
There’s another truism to be mindful of. And it’s very much part of the British psyche. In a nutshell, your typical Brit is more comfortable sharing the intimate details of their sex lives with friends, colleagues, and random strangers than they are talking about money. There’s a whole other topic here, but suffice to say arousing your network of friends, family, colleagues, acquaintances etc. takes time and can’t be successfully rushed. Yes, I resisted the urge to continue the double entendre and we’re back to talking about crowdfunding. Cutting to the chase, you don’t want to first start sharing the details of your exciting business opportunity with your network on the day your funding campaign gets underway. The courting needs to start much earlier in the piece.
The solution is alarmingly simple; get your early conversations underway early. (Social Media channels, such as LinkedIn, Twitter and Facebook are ideal for this; but one day you’ll need to include other communication tools, including old-style face to face chats.) You may be 6-12 months away from launching your product or crowdfunding campaign, but there’s nothing stopping you from casually socialising your plans and ideas at these early stages. The fact that you won’t have much detail isn’t a problem, and it will all probably change anyway. And as you get closer to the day you need your network to come to the party, you can and should progressively lift the level and frequency of what you’re saying to who. This will include, when the time is right, becoming very clear on what your call-to-action is i.e. the ask you will have of your network. Amongst other things, when you start having those more direct conversations about how you’re wanting people’s support, it won’t at all come as a surprise to them. Decisions will come quicker and easier. Objections will have been identified earlier on and dealt with as appropriate.
Hopefully you’re reading this article at the right time; if I have however suddenly ambushed you by identifying a problem you didn’t previously know exists, my apologies. That being the case, and taking liberties with part of an ancient Chinese proverb, “the second best time is today”.
Richard is a director of IdeaSquares Worldwide Ltd. We support businesses raising investment through equity crowdfunding. Working with us significantly increases the chances of your crowdfunding campaign succeeding. Get in touch.