Nathan Rose, Assemble Advisory
The content of this article has been adapted from Equity Crowdfunding: The Complete Guide For Startups And Growing Companies, launching on Amazon on November 1. SeedUps subscribers can download the entire book for FREE, this week only. Click here to download.
As Canada’s nascent equity crowdfunding market struggles along, the European market continues apace. There have been many more successful fundraisings on the other side of the Atlantic Ocean – Europe (and particularly the United Kingdom) accounts for a very large part of the approximately US$2 billion equity crowdfunding market, according to Cambridge University.
In my new book, I spoke with over a dozen successful crowdfunders, representatives from the leading European platforms, and a number of other experts at the forefront of the equity crowdfunding revolution. There were contributions and case studies from the United Kingdom, France, the Netherlands, Germany, Sweden, Finland, and Estonia.
Here is a sample of some of the key takeaways, and insights that Canadians can learn from their European cousins.
- Equity crowdfunding works best when a strong relationship already exists with your crowd.
“We didn’t really build our crowd through crowdfunding. We already had built our crowd, so crowdfunding was simply an opportunity to deepen that relationship.”
– Tom Blomfield, Monzo, raised £1 million on Crowdcube (UK-headquartered platform).
- To get journalists interested, you need to be doing something unique or special – just doing a crowdfunding campaign won’t interest media anymore.
“Everyone by now has heard of crowdfunding. To get journalists interested, you need to find your own unique take on it. Create the story. Ask yourself why should readers care about yours?”
– Charlie Thuillier, Oppo Ice Cream, raised £650,000 on Seedrs (UK-headquartered platform).
- A lot of work needs to go into outreach, even before your campaign starts. If you want to run an equity crowdfunding campaign in the future, begin warming up your community NOW.
“We spent two years of work building our community, and to get the media explaining how our technology works and why we do what we do. I do a lot of events and conferences and meet a lot of people. That’s why we were successful.”
– Sandra Rey, Glowee, raised €611,000 on WiSEED (France-headquartered platform).
- Having a ‘lead investor’ before your public campaign kicks off will hugely improve your chances. It means your campaign will start with momentum, and investors will have more confidence if you have a ‘smart money’ backer.
“We contacted several potential investors before launch. It was crucial to have some money already, so that when the people were directed to our campaign page through our social media, they wouldn’t be directed to a campaign with nothing yet committed. Investors saw that we had 50% of our target already raised on day one.”
– Jarno Alastalo, Heimo, raised €170,000 on Invesdor (Finland-headquartered platform).
- Equity crowdfunding can have transformational positive benefits. Some campaigns even believe the exposure was even more valuable than the money they raised.
“The overall impact on our business has been incredible. We got great press coverage, and a huge number of new people have heard of us as a result of crowdfunding. I just wish that we had raised more!”
– André Moll, MyCouchbox, raised €300,000 on Companisto (Germany-headquartered platform).
In 2016 we saw more countries embrace the opportunities that equity crowdfunding allows – including in the United States where Title III crowdfunding came into force in May. And in Europe, there is a strong push for additional equity financing for companies and innovative projects, aided by supportive regulators.
When different equity crowdfunding markets learn from each other, each of them will become stronger. Despite regulatory differences, running a campaign has much in common between countries, so taking note of what is working elsewhere in the world will have strong applicability for Canadian campaigns too.
If you enjoyed this article, you can read a comprehensive overview of equity crowdfunding by downloading Nathan Rose’s new book, FREE on Amazon for this week only, featuring even more insights from SeedUps and many other interested participants in the crowd economy from around the world. Click here to get your copy.
|Nathan Rose is the founder of Assemble Advisory, an agency for companies wishing to pursue equity crowdfunding campaigns, and the author of the upcoming book: Equity Crowdfunding: The Complete Guide For Startups and Growing Companies.|