Showcasing the Best of Welsh Business

Raising Capital Through Crowdfunding: A How-To Guide

SHARE
,

Recently, ‘crowdfunding’ has evolved into a buzzword, with new fintech companies launching in Wales every month. First introduced as a way for charities to raise funds, crowdfunding technology is slowly rippling its way across many industries, with the Welsh start-up community showing a keen interest in peer-to-peer lending as a whole.

Allowing a large number of people to place a small amount of money into a project, ‘the crowd’ acts as a network of small investors, strengthening a company’s growth plans. Investing in exchange for a stake in the business, raising capital through crowdfunding is a far cry from the traditional city investment pitch; one that gives way to great results quickly.

If you are a Welsh start-up exploring this innovative way to raise capital, then it is essential that you plan your campaign well, building a strategy that gives your business the best potential.

Here are just a few tips you may wish to consider.

Choosing the right platform 

Each crowdfunding platform is different, with some enjoying a vast amount of active investors and others lacking such a standing in the world of investment. It is important that as a business leader you do your due diligence, researching a selection of platforms and the outcomes of other projects they have managed.

It is also worth noting what fees are involved in using each of the crowdfunding platforms, gauging how much of the money you will raise will go towards the management of the campaign.

Present your business well 

Most crowdfunding websites will give businesses the opportunity to present their business plan, company biography, images and other important documentation online, providing potential investors with an insight into your brand personality, positioning within your market and scope for success. Being the first impression given of your business or idea, it is worth taking some time to make this visually pleasing, bringing professional designers and copywriters on board to do so.

Highlighting that you are a modern-thinking company at the helm of the digital business community, attention to detail goes a long way in attracting the right investor.

Utilise the marketing opportunity 

Though the intention of the campaign is to raise capital, an investment round is also a great marketing opportunity, showing the world how your business holds itself and plans to grow.

Helping sculpt an image of your business, it is advisable that you effectively market the opportunity. Just think, if someone is reading your press release, social media post or blog post does not become an investor, they well may become a customer in the future.

Below are some marketing tips to consider:

  • Share each stage of your crowdfunding journey through blog posts, gearing your target market up for your business’ launch. Providing a window into your company, such an exercise can do wonders for brand awareness levels.
  • Engage with companies that have successfully conducted a crowdfunding campaign, taking inspiration from how they spread the word of their investment opportunity. From contacting journalists that covered their story to dropping them a tweet, you never know what reaching out to such people will achieve.
  • Though the crowdfunding website will take some of the campaign marketing pressure from you, as a business you should be driving traffic to your campaign page, working with a mission to become overfunded. From sharing links on Facebook and in-boxing top targets on LinkedIn to creating a lot more content than usual, the more people shown the campaign, the highest the likelihood of a successful outcome.

For more advice on raising funds for your business, take a look through other articles featured on Business News Wales.