Our Crowdfunding Round — It’s No Longer About The Money
On Tuesday my company, eMoov.co.uk, launched a £1m crowdfunding round. This is a blog about why the raise money quickly became (almost) secondary.
We’re a start-up, one of those promising companies that seeks to change the world through disrupting an industry steeped in inertia and Dickensian glory. In our case it’s an online approach to estate agency, ‘We’re showing estate agents the door’, as a certain creative type recently suggested as our rather clever strapline.
We’re ‘in growth mode’ and we consume cash. So we’re raising more.
And so, having considered and utilised other means of fundraising, I set on crowdfunding as an interesting alternative to the revolving door of multiple visits to VC houses this time.
Now it turns out that there’s a lot more to running a successful crowd campaign than first meets the eye. More of that another time. But what has struck me, one week into our efforts, is how the herd throws up some unexpected, welcome curve balls along the way.
One of the secrets of a successful crowd raise is to prime your pump. In other words to do the leg work before the campaign even launches in gaining pre-commitments. In our case we tapped up customers, staff and my own contacts well in advance and I sat down with some existing investors to enlist their help. Not just to ask for their money but to piggy-back on their networks too.
CrowdCube, our chosen platform and the biggest (a cool business in its own right and which crowdfunded its own cash base), recommend that you try to achieve around one third of your funding target in advance. That demonstrates a solid confidence that, on day one, will inspire new participants. Hopefully.
So on our first day, we had raised £445,000 from 36 investors as part of a three day ‘private preview’ that, as its precursor, had already encouraged people close to us to weigh in. This was over the bank holiday and by the Monday we were up to £550,000 and which was far better than expected as a take up rate. Six days later and we’ve added a further £120,000 to the tally and are 67% ‘done’ with 25 days to go, from 14o investors.
And that’s the thing. The money raised is great but there’s two things that have really struck me about this method of hunting for cash over and above the usual flow of raising money:
- 17 members of staff, several customers and a whole bunch of friends and family have committed. Some of our team members have invested big amounts. Dear friends have pledged tens of thousands, one of them £50,000. Brothers and acquaintances; Facebook ‘friends’ and distant LinkedIn contacts have jumped in with tenners, hundreds and thousands. And the validation that these incredible votes of support provides to me, the team and our business has been, frankly, tear jerking. I know I must be onto something awesome if my close circle are putting their money where my mouth is. Faith, trust and encouragement like I have honestly never known in my life before. I am absolutely cold, hard, humbled.
- The second thing is the marketing reach. Every £20 promised, however small that may seem in the context of a £1m raise, is another potential customer, an advocate and a fan. Honestly, I would run a crowd campaign and give the money away next time if it meant acquiring legions of bar-stool eMoov champions at £50 or even £100 a time. Today, our London Underground campaign began with 2000 tube carriage ads and 95 ’16 sheet’ posters dotted around below the streets of the capital. And we’ve already listed a property directly from those investment ads…. in a true cross-selling result.
Sure, crowdfunding is about the money. But it’s also about so, so much more.
Our CrowdCube page is at www.crowdcube.com/emoov
