7 Practical Secrets to Succeed in the Complicated World of Equity Crowdfunding

Crowdfunding funding is easy. Come up with a good idea, create a page on Wefunder, StartEngine, Republic or Netcapital, then sit back and relax as the capital flows in.

Just kidding. Like most things, even if you have the best idea in the world, without a properly managed campaign, you may very well be staring at a goose egg every time you open up your funding reports.

(It’s not a great feeling.)

As a lifelong entrepreneur who has not seen a goose egg in quite some time, I’ve decided to reveal a few of the crowdfunding strategies that have worked well for me. In June 2021, my company Kazoo, received $222,091 in funding from 398 investors during our first wave, and we’re moving onto our next round now on a second platform, Netcapital.

Copy our strategies to take advantage of an emerging market, potentially mimic our success, and, most importantly, avoid the nightmare of a big fat goose egg at all costs.

View Your Campaign Page Through A Lens That Isn’t Yours

Your project is your baby. You know everything about it, including the fact that it’s going to take the world by storm.

But your potential investors don’t. In fact, when potential investors stumble upon your campaign page, you’re just one of dozens (or hundreds!) of pages that they may be looking at.

You have only seconds to pique that investor’s interest.

• Avoid long sections of text. Paragraphs should be short and snappy. Less is more.
• Get professional visuals. Don’t skimp. The difference is obvious.
• Tell a story through your visuals. Avoid bland lists of features and benefits.
• Recruit spokespeople, other than yourself, to tell the story. This is especially true if you are camera-shy, as I am. I pick brand ambassadors that I want to watch, who make me even more excited about my own project.
• Make a killer video. Your video is the centerpiece of your campaign, just like turkey on Thanksgiving or fireworks on the 4th of July. After watching your video, potential investors should feel excited. Aim for literal goosebumps.

Shifting your perspective is a tough thing to do. Consider paying a few digital marketing freelancers to give you their honest thoughts on what they think about your campaign page. Don’t treat any one freelancer’s opinion as law, but if multiple minds tell you a specific part of your page needs work—then it may very well need some work, even if you love it on a personal level.

Always avoid tapping friends or family for this type of tough-love feedback. They will tell you that everything looks perfect, benevolently leading you along a sure path to failure.

Be Religiously Responsive

Imagine you have to call your insurance company to get a problem sorted out. You dial, go through the automated menu of two options—and a representative picks up immediately. Even better, the representative is friendly and knowledgeable. The voice on the phone understands and fixes your problem within seconds. The whole ordeal takes three minutes total.

But that sort of prompt responsiveness is noteworthy. It’s almost a thrill, is it not? It makes you feel damn good about your insurance company. Or, at least, a little less annoyed by your quarterly premium.

You can provide this same thrill to potential investors by being religiously responsive to questions. Aim to reply immediately or within hours. One business day at the absolute latest! Taking multiple business days to reply to questions is the equivalent of waiting on hold for two hours with your insurance company. It’s not good for business if your angel investor is throwing a phone at the wall.

Responding to questions quickly also creates a butterfly effect of trustworthiness. Interested investors, even those who do not ask you questions, will see that you are prompt when replying to other investors. That will make them feel better about investing because they know that if they do have questions down the line, you’ll be there to reply to them quickly, too. You send this message loud and clear: you know your product, you’re amped about it, and you want them on your team.

Continue the Courtship

Investors hate being left in the dark. You courted them; don’t leave them hanging.?It’s their money. What are you doing with it?

Tell them what you’re doing before they have to ask. Create weekly update videos to keep existing investors happy and attract new ones. Videos help them see your energy, creativity, and momentum.

Since product development takes time (sometimes, a whole lot of time), you’ll have to get creative with your weekly updates if you want to pump them out on a consistent schedule.

Some ideas:

• Highlight a certain aspect of your company
• Talk about strategy, both short-term and long-term
• Showcase team members and their skills
• Create hype with short teaser videos (here’s our teaser video as an example)
• When you make progress, talk about that progress

Ideally, plan your updates before you launch your campaign. Being proactive prevents a worst-case scenario where you either burn through updates too quickly or don’t have time to put out enough of them.

Make sure to place a CTA (call-to-action) at the end of each video, but always keep the focus of each video on informational topics. Your campaign page should be doing the majority of the selling.

More Is More

For most campaigns, the majority of your investors will put down between $100 and $300. We’ll say an average of $200. You can, in theory, hit your funding goals if every investor plops down an average of $200.

But it’s a hell of a lot easier if you get some bigger investors to put down a couple thousand instead of a couple hundred.

Luckily, investors combing through crowdfunding funding platforms generally do, in fact, have more to invest than just $200. They don’t have to pull from their 401ks. If you can make them feel comfortable investing more, they’ll do it. But how?

One approach we’ve taken is creating an Investor Advisory Group. Being in this group requires an investment of $2,000, but as a member of this group, an investor will receive in-depth quarterly updates, in-advance product updates, and other nifty benefits.

Of course, the majority of investors still opt for the investment options in the $100 - $300 range. But some do pull the trigger, increase their investments tenfold, and become members of the Investor Advisory Group.

Speaking in a hypothetical sense, let’s say one out of every 20 investors decides to make the upgrade to the Investor Advisory Group. If this happens, your funding goals can be met with half the number of overall investors.

That’s huge.

Investing In A Relationship

People like investing in people. You know your team is A+ material. But potential investors don’t know that (yet). It takes a two-way street for this relationship too.

To give potential investors the ability to see your team in action, schedule weekly Q&A sessions. We use a combination of Zoom and Calendly to get it done. Every Tuesday from 3 PM to 3:45 PM, investors can join the Zoom session, ask questions, and discuss the project on a broader scope.

Every week, we have three to seven people talking with us. Some of those attendees turn into investors. Without the weekly session, there’s no guarantee they would have invested. The feedback we get there is fuel for the next week.

Make no mistake: crowdfunding funding is a hustle. If you’re not hustling, you shouldn’t expect to hit your funding goals.

Data Doesn’t Lie

Rather than doing things on the day of, take advantage of modern tech to schedule things in advance. Along with crafting a coherent vision for promotion, you avoid fallout from unexpected problems—like your social media manager getting sick, or deciding to take an impromptu vacation to the Bahamas.

Hootsuite, in particular, is a favorite of ours. The platform allows us to schedule all of our posts, across all of our different social media networks and accounts, from a single place.

Along with ease of use, Hootsuite also offers advanced analytics on every post we make via Google Analytics. We can see what’s working -- and what isn’t. By split testing angles, creatives, and more, we can see which ones lead to more clicks and conversions. We use this data to update our future scheduled content and get better results.?

Trust the data. Even if you think, to the absolute core of your being, that a certain approach will work best… you never know for sure until you have data that agrees with your intuition. Sometimes, the data matches up with your gut feeling. Other times, it doesn’t. Life is full of surprises.

Partner Up

A comprehensive list of free and easy-to-access marketing channels for your crowdfunding campaign can be found below:

1. ?Your social media accounts and connections
2. The social media accounts and connections of your team members

A good start. But not even close to an ambitious marketing strategy.

To get significant eyeballs on your project, you need to get creative and harness someone else’s audience.

To accomplish that, you need to give that somebody a very good reason to promote your idea. (In other words, the relationship must be symbiotic.)

Our company, Kazoo, is partnered up with Stand for the Silent, a charity involved in anti-bullying efforts all across the globe.

?Here’s how it works:

• Wanting to do genuine good in the world, we decided to make Stand for the Silent our Charity of Choice
• SFTS decided to help us out by promoting our product and campaign through their marketing channels
• An audience of over 300,000 across Facebook, Twitter and Instagram
• SFTS is a well-known and trusted charity, making their promotion far more effective than any cold advertising campaign would be
• In the future, once we become a smash success, a portion of app sales will be donated to SFTS

It’s a win/win for both parties involved. Influencers and charities can be excellent sources of promotion. Do your research and make the connections. With the right source of external promotion, you might be able to get funded more quickly than you ever imagined. Stranger things have happened.

So, is crowdfunding rocket science? It’s not. It’s not even calculus. You don’t have to reinvent the wheel to run a successful crowdfunding campaign.

But you do need to be proactive, responsive, cooperative, and ambitious. You’ve put so much time and effort into your idea. Now, use that same drive to make the idea become a reality, and don’t assume that things will happen all on their own.

?Even the goose and her golden egg know that.

– Peter

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Peter J. Goodman, CEO of Kazoo, is a lifelong entrepreneur, specializing in startups and rapid-growth companies in the mobile app, healthcare, and technology sectors. Through scrappy, creative, and “out of the box” digital marketing strategies (what some might call guerilla marketing), he has successfully conceptualized, funded, built, and launched countless products on highly ambitious timelines. To check out our new campaign on Netcapital, click here.