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How To Create A Killer Equity Crowdfunding Pitch - Step 5: Your Revenue Plan

“Money, Money, Money”

The fifth in a ten-part series which addresses the steps you need to take in order to create an eye-catching equity crowdfunding campaign on GrowthFunders. You can find out more about the coming posts at the end of this one.

Up until this point, it’s you who’s put in all the effort, building both your pitch and new business. Now it’s time to think about how that business is going to pay you back, literally, in the future.

Potential investors want to know how you intend to monetise your business and will make that one of the first questions they ask you, so make sure it’s something you’ve thought about.

They’ll want to know how is your business going to:

  • Generate revenue
  • Produce profits
  • Generate a better-than-average ROI (return on investment)

What are the options?

A revenue plan, or model, is a system which is put in place to monetise your business. There are a number of different ways in which to generate revenue. The points below are taken from the Business Model Canvas and suit different types of businesses in different ways. It's important to find the right fit for your business.

Asset sale

  1. This is the largest, most common, and most understood revenue model.
  2. The selling of ownship rights to goods and services, both physical and online)digital downloads: iTunes)
  3. Used in both retail and e-tail (online commerce).



Example 1: Amazon (online) sells books, bikes, bags - practically everything.

Example 2: Apple (physical and online stores) sell a range of products including Apple Watch, iPhone, iPod, etc.

 

Usage fee

  1. Generated by the use of a service.
  2. The more the product or service is used, the more the customer is required to pay.

Example 1: Uber. A short journey in one area of London can be between £5 and £10, whereas a trip across the city, through the centre, in rush hour will be significantly more.
Example 2: DPD charges to pick up, transport, and deliver a package.

 

Subscriptions

  1. Annual or monthly charge.
  2. Example 1: Amazon Prime offers membership services. AP customers are able to receive free next day delivery, amongst other things.
  3. Example 2: Spotify and Netflix both offer content as a service.

Lending / renting / leasing

 

Temporarily grants customers the right to use a product or service for an agreed amount of time.

Generates recurring revenues.

Example 1: Air BnB. Customers can rent a cottage, bedroom, etc from a private owner. 
Example 2: Zipcar. Customers can borrow cars or vans for a short period of time - especially useful in city centres where a lot of people don't own their own vehicles.

 

Licensing

  1. Sell permission to use protected Intellectual Property (IP) in exchange for licensing fees.

    One upfront charge to use your product. Common in the media industry.
  2. Allows you to generate revenues without having to manufacture a product or commercialise a service.

Example 1: Adobe Photoshop. Customers pay per installation of application.

Example 2: Disney Pixar's Inside Out characters appearing in commercials for Sky Broadband.

 

Brokerage fees

  1. Intermediation services performed on behalf of two or more parties.
  2. Commission is earnt each time a buyer and seller are successfully matched.

Example 1: Estate agent matches home owner with buyer and take a percentage of sale price. Example 2: Credit card providers take a percentage of the value of each sales transaction executed between card merchant and customer.

 

Advertising

  • The selling of space.
  • Advertising for a particular product, service, or brand.
  • Traditionally used in the media industry.

Example 1: Product placement in movies.
Example 2: Chanel perfume appearing on a full page of Vogue magazine.

 

Which one?

It is worth noting that you’re not expected to attempt implementing all of these models - nor is it encouraged. Realistically, you should choose one and focus on making sure it’s the most suitable in relation to your business type. If it isn't, it may be time to look around and if necessary, pivot.

GrowthFunders: getting you started

If you’re looking to raise growth capital for your business, you’ll no doubt already know how difficult it can be.

Spending time away from your business, travelling up and down the country to meet face-to-face with potential investors, can often be time-consuming and ultimately fruitless.

Finding the right platform from which to pitch to many investors, all at once, is a great solution. GrowthFunders, the online equity-crowdfunding and co-investment platform, is the right one. Now, what do you need in order to make your pitch the best it can be?

Idea


Using Social Media


Your Team


The Lean Start-up Method


Your Revenue Plan


Your Financials


Your Investor Presentation


Your Business Plan


Making A Video


Setting A Valuation


 

Start to raise investment for your company today

Driving Growth.
Creating Value.
Delivering Impact.

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Growth Capital Ventures (GCV) is backed by funds managed by Maven Capital Partners, one of the UK’s leading private equity and alternative asset managers.