A peek behind the scenes
This is for the people who:
- like to understand the ins and outs
- who like reading the manual
- who need to understand the mechanism.
(Pssst: If you’re a brand considering equity crowdfunding, we recommend you also check out what to expect when you’re expecting an equity crowdfunding round.)
A whole heap of stuff goes on behind the scenes. It’s way more than film the video you see on the offer page.
Here are some of the things that happen.
Learn and think about equity crowdfunding
Companies rarely start out as equity crowdfunding experts. This is definitely the case in Australia where it’s only been available for a few years. You would learn about home loans if you were looking for that kind of funding. In the same way, company owners will learn about equity crowdfunding. Once they’ve got the basics down, they get to think about how it applies to them. Things like:
- what they want the funds to do in their business
- whether it’s the right form of funding for them
- how they value / divide up the business
Do the documents!
That offer document doesn’t write itself. It may involve many parties including accountants, lawyers, copywriters, and the owners themselves. Take a look at that PDF. It takes doing full financial reports, projections, and budgeting. It takes valuing the business, pricing the shares, and dividing up the ownership. It takes clear writing about the business and its plans.
Perfect the pitch
The neat video you see might be only a few minutes long. But think about all the scenes, graphics, and shots in it. A filming session can take hours and there are more than one! There might be an interview with the owners. There might be an interview with some customers. There might be shots of a typical day. The videographer takes the footage and edits it together. There may be a back and forth between the company and the editor to make it as awesome as possible. Next up, they might add in graphics, music, and animations. As well as the video, there’s the copy on the offer page. This doesn’t write itself! Think about how hard it would be to describe your child in only 3 paragraphs. It can take significant time to create a clear and succinct description of a business.
Communicate with the crowd
Most campaigns don’t launch into the ether. The company’s owners will have done work to let their crowd know that a campaign is on its way. They’ll be in touch their friends, family, stakeholders, and customers. Once they launch the campaign, it’s not over either. As the campaign progresses, they’ll write newsletters, publish to social media, and film videos. They might even do a newspaper article or two. They plan lots of this but some of it will emerge as the campaign hits its milestones.
Once the campaign ends
There’s a cooling off period for pledging to an equity crowdfunding campaign. There’s an uncomfortable few days of silence. During this time, we’re waiting to see if the last few pledgers withdraw. After those few days pass, the payments are processed and the shares are issued. Pledgers become investors and the company gets access to its funds. From here on out, the company maintains a direct relationship with its new investors.
Did we miss anything?
Let us know if you’d like light shed on another bit of the process. If you want some specific examples, check out our live campaigns.
