In this blog post we talk about last year’s crowdfunding campaign to give you tips – from our own personal experience – for how to raise £1m in 4 weeks.
Last July our members had bounded from 0 to 5,000 in just 12 months and it was time for our next stage of growth. In order to accelerate our growth, and delight our members at the same time, we needed funds and decided that crowdfunding was the right way to go.
In this post we share our experience of raising nearly £1m in just 4 weeks and a few top tips should you be thinking of raising funding for your own business.
Choosing the Right Platform for Your Company
Crowdfunding has become the ‘go-to’ way for start-up businesses to get ahead. Not only can you achieve your funding targets but it’s a great way to get PR. What’s more, your multiple investors act as champions for you, giving you feedback and hopefully bringing their friends on board. There’s a range of platforms out there for crowdfunding that suit different business needs. We narrowed down our options to Seedrs and CrowdCube and in the end opted for CrowdCube due to their lower fees and a large investor base. We also liked the look of their marketing reach; as a B2C brand, this was incredibly important for us as we wanted to continue to appeal to our members, not just investors.
Once we had found the right platform it was time to get ready for the launch of our crowdfunding. Here’s a breakdown of the steps we took prior to going live:
- Worked closely with Crowdcube: We worked collaboratively with CrowdCube for a number of weeks in the lead up to the launch to make sure that our company constitution was suitable for a larger group of investors.
- Due-diligence: We also went through a multi-week due-diligence process where Crowdcube reviewed our financial model, business plan and background of our directors to make sure that the fundraise complied with regulatory regulations.
- Rewards package: Once we’d met the regulatory requirements we set about putting together an attractive rewards package for our investors to encourage them to support our growth – this proved really popular!
- Warmed up investors: Our founder, Ollie got out on the road meeting with existing and prospective investors to warm them up ahead of the crowdfunding launch. In our experience it’s always a good idea to have some investors ready when you go live otherwise you can find that the campaign doesn’t gain momentum and you risk not reaching your target.
- Pitched our brand: The final step was making sure we had a great presentation to use for our pitch. Video content is incredibly important to storytelling and our marketing team set out on a jam-packed one-day shoot with Spirit Media to create our campaign video which was shot in a barber shop as well as out and about in the heart of London.
You can check out our video here:
Going Live
Once we went live, Ollie was busy! In his words he “emailed everyone he’s ever met and wouldn’t shut up on social media”. He also reached out to our existing 5,000 members who were enthusiastic and excited about the next stage of growth – a number of them even decided to invest. This was the cherry on top as it’s really rewarding to have your customers’ support.
In just 48 hours we were bowled over by the response – we had hit our £500k target and even achieved a single investment of £100k! Given this amazing momentum we decided to extend our campaign and overfund.
To bring new investors on-board we hosted an investor evening in a barbershop in Central London where cold beers and quality G&Ts helped us attract an audience who committed an extra £45k to the campaign. Ollie was back out on the road again, speaking at angel investor networking groups to showcase the success we’d had so far and encourage others to get involved.
While this was an exciting time it wasn’t all plain sailing. Through the crowdfunding platform we received some tough and probing questions which required careful thought to respond to. While we wanted to be completely transparent and bring more investors in, we had to be wary of oversharing commercially sensitive information.
By the end of four exciting and exhausting weeks we closed our campaign and had raised an amazing £987,000 across CrowdCube and offline activity from nearly 300 shareholders. This was incredible and a real boost to Cornerstone, not only financially but also in our confidence that the world needs us!
Since we raised our funding, Cornerstone has really taken off. We have been able to invest heavily in our product development, marketing and in our team. A year on, we now have 70,000 members and a team of 16 at Cornerstone HQ! Since our success with CrowdCube we have raised a further £2m from our existing investors and we plan to raise further finance later this year.
Our Top Tips
It’s been a whirlwind adventure so far, made possible by hard work and passion for what we do. If you are about to embark on your own adventure here’s some of our top tips that we hope will bring you success;
- Whatever you do, prepare your business plan thoroughly. The due diligence exploration from the crowdfunding platform will be extensive and crowd investors will ask you every question you could possibly think of and can quickly uncover your weaknesses. You’ll need all the answers up your sleeves!
- Spend quality time warming up investors before you go live. There is nothing more disheartening that launching with a big fanfare and the whole thing being a damp squib.
- It’s all about the pitch. Make sure you invest in a compelling video, packaging up investor rewards and engaging photography. Show your investors the thought and effort you put into your business through your approach to your pitch. An attractive and compelling pitch conveys how hard you are going to work to make your business a success for you and for your investors.
We’d love to hear your thoughts; have you raised through crowdfunding or perhaps you’re an investor yourself? Can you help us crowdsource any more tips for success?