Raising capital online successfully is less about timing the market and more about how you market your offering to investors. I have worked on over 400 fundraising projects and am asked daily about the capital-raising landscape. My team at DNA and I then review the analytics of live Regulation Crowdfunding campaigns (Reg CF) every Monday morning on Kingscrowd to keep a pulse on the ecosystem and apply the lessons learned to our own campaigns.
As of 1/30, the top 10% of campaigns have raised about $73k or more for the month of January. This is drastically lower than the $122k that the top 10% had raised during October, as referenced in my November Equity Crowdfunding Week presentation or the projections that I hear from issuers that are planning their campaigns. With the top portals allotting for 2-3 months to run a Reg CF campaign platform on their platform (unless approved for an extension) and many issuers seeking a $1mm - $5mm result - most campaigns are statistically set up for failure.
Upon further review, 50% of the 568 campaigns have produced about $7.3k or less in the month of January. That is at approximately the same level as October but still much lower than what any issuer, even one looking to raise $250k, is playing for. I regularly speak to founders who are shocked by these numbers.
Am I sharing this to cast a negative shadow on this growing space or to discourage groups from using this vehicle? Absolutely not. I offer this perspective because it is based on numbers: this may not be the narrative you have been told, and I want to allow Founders to prepare accordingly.
The biggest differentiating factor between the upper 50% and the bottom, or even the top 2% that are putting serious numbers on the board, is the effort placed on Investor Acquisition. Founders who understand that they will need to work off standard digital best practices, such as a 2% conversion rate of offering page visitors, and current Reg CF metrics (which can be found on Kingscrowd with additional filtering by date or vertical) that include a $1k average investment value, will be positioning themselves to set up a realistic campaign.
Why don’t all issuers follow the marketing fundamentals? Generally speaking, the limitations are budget, time, skepticism, or that the raise itself is just a case of “dipping their toe in the water” in hopes that the campaign will raise capital on its own - simply by listing on a portal or being self-published.
What are the marketing recommendations? Take a look at our Media Library on DigitalNicheAgency.com! I recommend starting with a full strategy plan and have built a great model to do so: you can even read about it on Forbes. From there, I break my recommendations into 3 categories: Content Funnels, Advertising, and Outreach.
Content Marketing is all about the creation of good, engaging content that is designed for social sharing and high-authority links/coverage. Peer-to-peer marketing is the goal, and a strong audience funnel tends to produce a better conversion rate. I see the top groups in the charts utilizing social media, email, and long-form content (webinars, articles, portal updates, videos, and other publisher coverage). Coordinate your efforts using a Content Calendar that defines what will be distributed, when, and where. The top brands have funnels that pitch thousands of investors daily by intentionally taking them through content that inspires action.
Advertising is the most consistently scalable and performance-oriented form of traffic. Facebook and Instagram have “Equity Crowdfunding” targeting available, email lists can be uploaded to reach specific individuals, and there are endless options to run ads to users that follow selected social pages, along with various age/income/location/device/etc subsets. Ads on Social Platforms, Search Engines, Media Sites, Email Newsletters, or most other digital placements can be used to prospect new investors and retarget those in the funnel until the point of investment - and then the ads can be systematically scaled (this will become your favorite word).
Lastly, Investor and Strategic Outreach can be performed on LinkedIn with a 20% acceptance rate of invitations and a 20% response rate. You can confirm with your compliance team about using email outreach to promote content, such as an upcoming webinar, but I’m a bigger fan of LinkedIn and believe it is underrated for Outreach. There is something about seeing a profile picture, mutual connections, and background info that just leads to stronger engagement.
After working on the volume of campaigns that we have at DNA, I look at the sharing of these insights as a responsibility and hope it is of value to your raise. We are confident that the space will continue to produce higher numbers over time, but regardless of when that occurs, brands can effectively bring on investors in the current landscape. Please feel free to reach out with any questions or if you’re looking to go into this topic in greater depth. Happy Fundraising!