5-point procedure to Crowdbuilding!
by Nathan Rose
(Crowd88 guest blogger)
The essential precursor to equity crowdfunding is crowdbuilding. The mindset is about building a large crowd, and a meaningful relationship, a long time before going out for a funding round. Build trust before asking for investment.
In this article, I explain a straightforward 5-point procedure to crowdbuilding. If you follow these steps, you will have your crowd well-primed by the time your equity crowdfunding campaign comes along.
In addition, I have developed a full equity crowdfunding video walk-through, which Crowd88 readers can access for FREE by clicking here -> The Free Equity Crowdfunding Training.
1. Create Your Investor Avatar
Most companies will have gone through the exercise of creating a customer avatar. This is similar. The initial phase of crowdbuilding is knowing who your crowd actually is. You need to answer this question with precision, in order for it to be effective. You must know your investor avatar’s key demographics.
- annual income
- city & place of abode
- marital status
- favourite media
- wants and needs
Remember: your investor avatar might not be the same as your customer avatar. There won’t be a perfect overlap between your crowd of investors, and your crowd of customers. Not every customer will invest, and some investors might come along, even though they are not customers. Investors are motivated by different things, and also tend to be more evangelical than ordinary customers.
This difference becomes most pronounced when designing your marketing efforts. For example, if you figure that your customers are mostly earning $50,000 - $100,000 / year, but you estimate that your investors are going to be in the $200,000+ income bracket, the messaging will be far more effective if it is tailored to that different demographic.
2. Think Of Where Your Investor Avatar Is To Be Found
There is a very simple law of business - know your customer, and then go where they are! Crowdbuilding is no different. So, brainstorm:
- which influencers do they follow
- which clubs are they a part of
- which YouTube channels do they subscribe to
- which social media are they consuming
- which newspapers and magazines do they read
Once you know where your investor avatar is, you can really start forming your plan for how to reach them. It is important to deal in both the online and offline realm. Technology may have made the world smaller, but real connections still rule. Let them see the face behind the brand (you!) Shake their hand, let them see the enthusiasm in your eyes - it is all going to help your crowd build their trust.
3. Show Up, And Grab Their Attention
Crowdbuilding is all about marketing. You need to be confident with seeking the spotlight. If getting attention for your project is uncomfortable for you, then you will need to push through that. Equity crowdfunding requires extensive outreach to make it happen. But the opportunity to grow your crowd and raise money at the same time means that it is most definitely worth it.
What attention-getting looks like is going to be different for every different business.
- If you sell drones and believe that your investor avatar are childless men in their 30’s, you could grab their attention by doing a giveaway contest at an event where such men are known to gather.
- If you sell top-end imported furniture and decide your ideal crowd are married couples in their 40’s and 50’s, you might want to take out an advertisement in a home design publication that targets people of that age-group.
- If you sell extremely high-performance loudspeakers…probably the customers are going to be teenagers and people in their early 20’s. But maybe your investor avatar is totally different to that demographic! Sometimes it takes some trial and error to find out who is going to have the most interest in investing in a company like yours.
4. Grow Your Crowd’s Trust In You
Developing a strong reputation is the best way how to crowdfund. Despite all of the wondrous advances in network technology, plain old word-of-mouth marketing is still the most powerful way of building community. As Seth Godin said, people form tribes around the like-minded. So, if you are able to develop rapport with existing members of your investor avatar, they will probably tell their friends.
Building trust is also about being consistent and regular in all that you do. Whether that’s in-person, or through e-mail or social media - being a value-adding presence in the lives of your investor avatar will help them to build their connection to you and your story over time. Remember, people invest in companies they know, like and trust. The goal is to build enough comfort and familiarity between your crowd and your company that the “ask”of investing in your company becomes very natural. Or even better - your crowd ends up being the ones that ask you! It’s a highly authentic approach, and it works.
Most crowdfunding campaigns do the exact opposite of this - they blast out social media posts to totally new people, and make asking for investment the very first communication touchpoint. Think about it - would you invest $100 into a company, just because it appeared on your Facebook or Twitter feed? If you had never heard of them, probably not. Trust had not been built. It would be like asking someone to marry you on the first date.
5. Get Your Crowd Involved In Making Your Campaign
Here’s an idea - as you are designing your campaign, why not involve your crowd and ask them for their feedback, before you launch it? Which of these two banners do they like the best? Which of these two videos do they prefer? Not only will it make for better-quality campaign, but the involvement will also get your crowd emotionally-invested in the campaign’s success…even before they have financially invested. This is crowdfunding co-creation in action.
There are specific strategies to make crowdfunding co-creation work for your campaign. But the most important point is to make it easy and low-touch for people to feel involved. Through a simple way to become involved early, it becomes much more natural to deepen their involvement with your campaign later.
If you liked this article and want a full equity crowdfunding walk-through, including information about equity crowdfunding pros and cons, forming an amazing investment pitch, and what to do at every stage of your campaign, sign up to the video training, by clicking this link -> The Free Equity Crowdfunding Training.
Nathan Rose is the bestselling author of Equity Crowdfunding: The Complete Guide For Startups & Growing Companies. He has appeared at crowdfunding events around the globe, including in Toronto, Amsterdam, London and Paris, and has spent time as an Expert in Residence at CrowdfundingHub. Today, he runs the website www.startupfundingsecrets.io, as a way of helping startups from all over the world use equity crowdfunding to gain marketing exposure and raise money at the same time.