You got questions? I got answers. Maybe.

Why do startups fail? Why do some campaigns succeed while others stall, often underfunded? 

Harvard Business School professor Tom Eisenmann recently released a book titled, "Why Startups Fail." Two pages into the introduction, I highlighted this quote from Lean Startup guru Eric Ries.

"If you cannot fail, you cannot learn".

"Humans are wired to oversimplify explanations for both good and bad outcomes through what philosophers call the single cause fallacy. We shine a spotlight on one big reason for a calamity-say a sports team's late-season collapse (the star player pulled a hamstring)-whethe outcome is actually a result of multiple factors."

Bad Bedfellows, the first of six findings on why startups fail, is revealed from Eisenmann's multiyear research project. Startup success is thought to rest largely on the founder's talent and instincts. But the wrong team, investors, or partners can sink a venture just as quickly.

The importance of the right people, leaders, and other "bedfellows" is also one of the six criteria I look for when evaluating founders on whether to engage with their equity crowdfunding efforts or not. If I don't believe in a founder's ability, if I'm not engaged in the story they're telling, if the stage your company is at isn't the right time to launch a successful equity crowdfunding round, chances are we're not a good fit.

             But, more often than saying "no", I say "not yet."

If you're a founder, consultant, or investor, I recommend ordering a copy of the book.

Why do some campaigns succeed while others stall, often underfunded? 

I'm not going to highlight underfunded campaigns, those deemed unsuccessful by some, "failure" by others. Instead, let's look at what has worked and the mechanics of why the crowd invested in strong campaigns across a variety of different industries.

By process of elimination, you'll be able to deduce underperforming campaigns are missing much of what's typically found in a successful raise.

Sircles

Think of the headline of a campaign page the same way one would value the headline of their LinkedIn profile.

You want your LinkedIn profile to simply describe what you do and attract enough attention for visitors to want to scroll down and read more. Scan your "about section", featured content, and your value proposition to want to connect or follow you.

Coming up with the right tagline for your brand can get you pulling out your hair but is a great exercise for entrepreneurs. Founders need to be able to concisely say this on their website's landing page, the first slide of your deck, in their opening statement when asked "what do you do?", and even have it on your business card. (yes people still do have them.)

"Be clear and concise. No jargon. How would you explain it to a 10 year old?"

{From Wefunder's fundraising playbook}

Additionally, the headline on platforms like Wefunder should be a focus as it's included in your campaign snapshot. As potential investors browse open deals, your company card is what they will see.

Also included in your company card are the first two highlights on your campaign page, so make sure the top two are prioritized.

Here are three examples of highlights or reasons to invest, from successful raises on StartEngine, Republic, and Wefunder:

The headline and highlights of a campaign page is what helps make up the foundation of a healthy equity raise from the crowd. The holy grail, however, is the campaign video.

Take a look at these:

How long did it take for you to feel engaged? At what moment did you to understand what they do? At what point did you see this as a potential investment that you might have made, or certainly refer a guitar-playing friend of yours to invest in?

This video tells you a little about the founder, why he started the company, demonstrates the product, and presents the market opportunity.....all in the first 90 seconds.

Here's another campaign video that hits multiple targets.

• This is what we do.
• This is the problem.
• We are the solution.
• Share some leading brands who are customers.
• Now see it in action.

Any questions?

Then there are the videos that are creatively done, connecting directly with your heart. You know the kind, the ones that have a just cause drawing you into the narrative of the company's story.

And everydae nailed it with with their video.

Moving on....

Campaign Page ??

Video ??

There's a lot that going during live campaigns that play a part in a successful raise.

Investor Updates - Not frequently updating your investors enough is only preceded by update overkill. One of the worst mistakes a founder can make with their campaign is going two months with no updates, then a week straight of them. With every update each investor and follower of your campaign receives an email alerting them. What kind of confidence does that leave your potential investor market with?

Digital Marketing - There isn't a funding portal doing a great job at marketing your campaign. It's the truth. But how can you blame them? Everyone needs to be treated equally, right? Giving some founders better placement, or only a select few trending campaigns being featured in digital ads is a recipe for disaster for both the platform and the founder. That's one of the best things about equity crowdfunding, everyone's on equal ground in terms of the potential to raise a huge round.

Like any company, every campaign could use some help. So what to do? Hire an agency to do it for you. What kind of agency, however, is the key. A media agency that covers all kinds of brands, B2C, B2B, Shopify stores, online courses, and many more work best with companies whose purpose is to attract users, customers and eventually sales.

An equity crowdfunding campaign though is not being marketed to consumers, or at least shouldn't be. The marketing performed for your campaign should be targeted to potential investors. Investors are different than customers, and retail investors are different than institutional investors. So yes, hire an agency, but choose wisely and make sure this is what they focus on.

There' so much more that is done before and during a campaign that I've not listed, that if done strategically, positions companies to have a successful raise. Uploading a video self-filmed, followed by an upload of your deck is just plain lazy and is doomed.

March 15th changed the game both for founders and retail investors. With companies now able to raise up to $5 million through the crowd, not only are startups looking at equity crowdfunding as a faster way to acquire seed capital, but more established companies are also tapping into the private investor market using funds raised as a bridge from a seed round to a series A. And consumer-focused companies are benefiting from the "users become investors and investors become users " merry-go-round.

I'm seeing a lot more CPG companies now considering equity crowdfunding. Whereas $1M was not enough to launch a new line of products, or expand the reach of their current line, $2-$5 million is.

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