Raising capital through equity crowdfunding helps build a community and excitement around a business. It helps put a company out there for big investor bases to notice. However, marketing and running an equity crowdfunding campaign can be a challenge for female founders.
In this episode, Trieste Reading introduces FrontFundr, an online platform for raising capital through equity crowdfunding. She explains how FrontFundr helps in creating a successful marketing campaign. Trieste also talks about creating a great pitch deck to attract investors.
If you are a mission-driven founder who wants to raise capital and get your business out there, then this episode is for you!
Here are three reasons why you should listen to the full episode:
Learn about FrontFundr is an online platform you can use to campaign for your business and raise capital.
Discover the critical marketing pillars for raising capital.
Know about the importance of a target capital raise as a predictor of a successful campaign.
Resources:
Visit Christina Sjahli’s website for more insights on raising capital through equity crowdfunding on the Her CEO Journey podcast series.
You shouldn’t need to be a man to get venture capital funding in Canada by Arlene Dickinson in The Globe and Mail.
Turn Your Community Into Investors With Equity Crowdfunding - The Journey of Kara Sam
Download this Action Guide on how to create successful campaigns for raising capital.
Episode Highlights
[04:52] The Key Pillars in Business Finances
Knowing about the key pillars in business finances will benefit you in building a sustainable and profitable business.
In terms of key pillars in business finances, you need tools and processes that will help you in your financing your business.
These tools must solve issues about your cash flow for the next months or years.
Having the knowledge about these keys will tell you the right type of financing for you.
[07:08] How Trieste's Journey with FrontFundr Started
FrontFundr aims to democratize the private capital market. It makes raising capital accessible to all entrepreneurs.
Trieste started as an investor in FrontFund. She admired the company's mission and joined the team.
Her role as manager of a campaign strategy involves a lot of coaching. She works with companies and walks them through the best steps to prepare for a crowdfunding campaign.
With equity crowdfunding, women CEOs are empowered to choose the people they invite to hear their pitch.
[10:35] How to Get Over Risky Investments
Investing in private equity is risky because there is no finite return timeline and no liquidity to the investment.
However, you get to support businesses you're passionate about.
You should never invest more than what you're comfortable losing.
In equity crowdfunding, you can invest as little as $250.
You become part of the journey of businesses you love; you will see their acceleration in growth.
[14:22] How the Funding Landscape Changed in the Past Year
With the pandemic, people became afraid of raising capital. There is a significant amount of uncertainty, and companies had to look for alternative ways to raise capital.
FrontFundr supports companies through the pandemic with its online and virtual platforms.
There has been an increase in webinars, messaging, and ads to engage investors.
[16:44] How FrontFundr Helps in Marketing Your Business
A sales pre-screen and Investment Review Committee meetings are held before approving a company’s request for funds.
Setting clear objectives regarding the campaign helps FrontFundr know if a company is a good fit for their system.
The starting point is the marketing audit. It captures things such as the size of the company's mailing list, engagement on social media, preferred platforms, and annual advertising budget.
A marketing audit helps in assessing which parts to prioritize in preparing for the campaign.
Visibility and building familiarity in front of investors is essential.
[19:32] What Steps to Take Next
Look into marketing key focus areas and address any gaps in advertising.
Start building up a community organically: equity crowdfunding is all about community.
On average, it takes 90 days to prepare for a campaign.
Equity crowdfunding is a commitment: companies have 90 days to prepare and 90 days to run the campaign.
[22:42] Which Companies Can Raise Capital with FrontFundr?
FrontFundr assists companies at every stage.
Businesses at the conceptual stage need to do more work. It also comes with a higher advertising budget since there is a need to find a community first.
The stage of the company can have an impact on the success of its campaign.
A company may have a couple of team members or a dedicated internal team to handle the campaign's preparation and execution.
[25:49] Customer vs. Investor Acquisition
Customers can become investors, and investors can become customers.
Through equity crowdfunding, customers and investors can become the same person.
Any investors that you reach out to can become both customers and brand ambassadors for your organization.
[26:48] Easy and Hard Industries in Raising Capital
It is easier to raise capital for industries with tangible products in the market and have established customers.
Tangible products show you precisely what it is that you're investing in and what the company does.
What you are doing can suddenly become relatable to everyone.
Timing in the market can help your business and help people understand what it is that you do.
[29:37] FrontFundr's Role in Raising Capital
FrontFundr's role is mostly advisory and coaching, not execution.
FrontFundr can recommend an agency that can step in and become the marketing team lead.
[30:15] Marketing Pillars to Raise Capital
Add a landing page or a banner that explains the equity crowdfunding investment opportunity.
Have anticipatory emails that would go out to your community to start building interest and intrigue in the campaign.
Send launch emails and keep communicating with investors throughout the process.
FrontFundr sets up a marketing collaboration folder. Every company building out this content can receive feedback, advice, considerations.
Compliance is instrumental to everything when it comes to the marketing side of campaigns.
[33:45] The Minimum Following Needed
A business can have 100 to 1,000 followers before the campaign.
One thing to keep in mind is how engaged the community is within the network.
Profile those in your email list to identify who might be interested in becoming an investor.
The budget for paid advertising depends on the stage of the business and its objectives.
[36:57] Successful vs. Unsuccessful Campaigns
Having no established community can be a hurdle during campaigning. You will need to spend money in front of the more extensive investor base.
A significant indicator of success is reaching a 20% capital raise of their target offering before going public. Most of the time, unsuccessful campaigns don't move beyond 20%.
People want to see the momentum. They want to see other people engaged in this campaign investing.
Get support from your network of family and friends.
Engaging within your network helps in growing your network further.
[42:44] Creating a Great Pitch Deck
Not all retail investors are comfortable diving into things like financial statements; they may not know how to interpret them.
The pitch deck and campaign page help translate to average investors the meaning of financial statements.
Be mindful of things from a compliance perspective. We must be cautious with how companies communicate financial projections.
We want to make sure that a pitch deck is shared and designed to be straightforward for everyday people to pick up on.
If investors asked for that information, the company could make that available.
[46:08] Advice on Marketing for Equity Crowdfunding for Female Founders
Equity crowdfunding is all about building community and building excitement around the business.
It's better to call it a community raise because it is all about engaging your existing community. It also helps make sure that other people feel like they can become part of your community.
Show your passion and wisdom on why you started your business. It helps tell your story and engage investors.
You may encounter problems in understanding regulations. FrontFundr allows you to have a dedicated campaign that will support you every step of the way.
About Trieste
Trieste Reading is FrontFundr’s campaign strategy manager. She was first an investor in FrontFundr. Having already invested in real estate and publicly traded companies, the concept of investing in private companies supported her personal financial goals. Quickly becoming a brand advocate, Trieste looked to leverage her experience with a role at the company.
Combining her BBA in Marketing Management, Minor in Communications, and a Masters of Global Business, Trieste has worked with companies in North and South America.
Consulting with early and growth-stage companies in their marketing, communications, and strategic planning has led Trieste to develop a passion for helping entrepreneurs succeed. Now, she coaches entrepreneurs through their fundraising campaigns.
Enjoyed this Podcast?
As a mission-driven female entrepreneur, raising capital can be difficult. But if you market your campaign well, you can use equity crowdfunding to make your business grow and thrive. If you enjoyed today's episode of Her CEO Journey Podcast, then hit subscribe and share it!
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Have any questions about business finance? You can contact me through LinkedIn or schedule a chat with me at any time. You can also suggest topics you're curious about for future episodes to help your business grow. Thanks for listening!
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Cheers, to fuel the life you want to live,
Christina