Crowdfunding Tips for Life after Your Campaign
After months of campaign preparation and weeks of execution, all of your hard work paid off and your crowdfunding campaign reached its target! You knew it was going to be a long, arduous road to success but you finally hit that 100% mark and you’re jumping for joy. After all the high-five’s subside and the phone calls end, your exuberance may start to wane a little when you ask yourself, “Ok, what do I do now?!”
No worries – truCrowd has you covered.
Title III equity crowdfunding will be new to everyone, so we anticipate a lot of questions regarding the before, during and afterlife of a crowdfunding campaign. Knowing what to do after your crowdfunding campaign ends is critically important to your success. You will have a lot of momentum going for you and you should never idle and waste the positive energy fueling this momentum.
Here are the steps to take after a successful crowdfunding campaign:
Deliver Equity and Get Your Money
When you execute a successful equity crowdfunding campaign with truCrowd, here is what you can expect first. In order to make the transfer of equity fast and professional, we partnered with Colonial Stock Transfer to assist you in preparing the share certificates and other documents related to the transfer of equity. You cannot receive a dollar of the capital you raised until the transfer of equity has been confirmed. Once we have confirmed the transfer of equity, your money will be transferred from an escrow account into your company’s checking account. (Now you can really celebrate!)
What you do with your crowdfunding capital is up to you at this point. However, if your crowdfunding campaign detailed specific plans for the money, as in hiring more employees or opening a new location, you had better stick to your promises. The legal repercussions may not be set in stone yet regarding this matter, but if you want to maintain the helpful and supportive nature of your new investors, give them what they paid for.
Honor Your Post Issuance Communication Plan – Reporting
One of the most important pieces of a crowdfunding campaign is the Post Issuance Communication Plan. Many of the non-accredited investors who fund your campaign will want to know how often you plan to update them about the company after the transfer of equity. The SEC mandates all equity crowdfunding companies to file an annual report and provide it to investors, but how intimate is a report to your investors every 12 months? They are excited and want to know every little update when it happens.
If you offered semi-annual reports, deliver them. If you offered 6-month financial updates, deliver them. You have to remember your investors are excited and pledged their hard earned money to support your dream. Chances are you will be reading the fine print of your weekly reports – what is stopping you from providing them some insight? A poor Post Issuance Communication Plan can sink a crowdfunding campaign, so our advice is to keep your investors updated and your promises in check.
Honor Your Post Issuance Communication Plan – Communication
Financial reports are important, but again, even quarterly reporting is once every three months. Almost 15 years into the 21st century, constant and immediate communication is the norm. This is not saying you have to provide daily updates, but if you have pictures of your new product, share them. If your newest location is opening soon, let all your investors know and invite them to the Grand Opening. They are, in fact, the source of the capital you needed to make this next step.
Judd Hollas, CEO of EquityNet, offered this statement regarding constant communication in a recent Business News Daily article:
“Updating and engaging your investors will help to extract more value from their experience and mentoring. Most importantly for a young business, [it will] engender better investor confidence and familiarity with the business, which can lead to additional investments and mentoring support by investors.”
Turn Your Investors into Brand Advocates
One of the main benefits of having a pool of investors at your helm is using them to promote your company/product/service. By keeping your investors excited and enthusiastic with fun and informative updates, you will create a buzz they won’t be able to keep to themselves. A witty Twitter post or a “must see” video on YouTube can be easily shared by any of your investors, who will in turn expose you to their friends, and so on. Brand Advocates, also known as Social Influencers, are marketing tools you create through a concentrated and calculated post crowdfunding campaign communication plan.
Marco Hansell, CEO of Speakr, offered his expert opinion on turning social influencers into brand advocates:
“People talk about social influence [as] being a fad, but it’s really based off traditional word-of-mouth-marketing. Now, we’ve taken that idea of word-of-mouth — the highest level of trust [in a brand message] — and used technology to accelerate it. Social influencers can drive a much higher impact than you ever could [by] pushing out your message through your own company voice.”
Reaching the funding target of your crowdfunding campaign is certainly a milestone on the road to entrepreneurial success, but there’s no time to stop and smell the roses. Pulling over to snap a picture is one thing, but you need to keep your engine hot and get back in gear soon after. Planning and running a successful crowdfunding campaign was a lot of hard work, but you raised this money for a reason and now is the time to make it happen. Honor your Post Issuance Communication Plan for reporting, update your investors whenever necessary and turn your investors into brand advocates. By doing so, you will keep your campaign energy alive and use it as fuel for the future.
Thank you for reading and please leave your comments below!