Insider Insights: Crowdfunding for Startups
Below we’ve captured the most essential insights from Darren, CEO and co-founder of Crowdcube and Tom, CEO and founder of Monzo into how today’s startups can make the most of the crowdfunding platform – enjoy!
1. Be meticulous with your preparation
Preparation is everything to a successful crowdfunding campaign. That means spending as much time as you can developing your project pitch, as well as planning how you’re going to get initial exposure, and which kinds of investors you want to attract. Think about what you want to get from your network of investors in the years to come, and make provisions based on those objectives. For example, you might want to plan how you’ll share business developments with them over the coming months, or how you intend to collaborate with them as your product evolves.
2. Make a good impression
We heard from Darren that the biggest investments get secured by startups who get three things right. First, they make sure their valuations are on point, as exaggerated numbers are an immediate red flag for investors. Second, they present themselves well by taking advantage of different content formats like engaging videos that demonstrate their unique product benefits and discussion forums available on the Crowdcube platform. Third, they use the right language: a clear, simple, open tone of voice that conveys authority without sounding like a sales pitch. Brewdog is a good example of this: its quirky Crowdcube campaign helped it secure a recent £10 million investment.
3. Make the most of the platform
Crowdfunding isn’t just about sourcing money. It’s also a perfect opportunity to extend your user base and deepen the relationship with your existing customers. “We had a few extra people come in who were not existing users already, but the vast majority of people who invested were already Monzo users and this helped us deepen our relationship with those people and really further our brand. Values like transparency and customer centricity are just absolutely central to what we’re trying to do and crowdfunding just re-enforced that in such an amazing way”, we heard from Tom.
4. Stay connected
Another important lesson Tom learned from crowdfunding is the importance of keeping connections with his Crowdcube investors. Tom’s made sure to always send them personal updates about the brand before making public announcements. Monzo investors also receive a special badge of honour – their Monzo card says Investor on it and their “title” also follows them around the community forums.
In a nutshell
Crowdfunding isn’t just about putting your name down and waiting for money to come in. It’s a huge opportunity that takes a lot of work to master. For pointers, follow the advice of Monzo and Crowdcube. Make sure you prepare your campaign meticulously, leaving no stone unturned. Ensure you make the right impression by crafting an appropriate tone of voice, and creating engaging content. Take advantage of the crowdfunding platform and use it for other things like expanding your user base. Finally, stay connected with your investor network so you’re always well-connected and supported. You may not make a million in 96 seconds, but if you follow these pointers, there’s nothing to stop you from doing so.
*What is AWS Startup Stories?
AWS Startup Stories is a business series of podcasts published on the AWS Podcast channel that showcases the success stories of startups running on AWS. Heroes of each business talk about how they overcame challenges and used technology to solve problems, providing tips for companies facing similar issues. Learn more about the series and who’s part of them on the webpage here and never miss an episode by subscribing today!