Insights

Equity crowdfunding: Managing shareholder communications and maintaining momentum post-funding

After all, achieving your funding target (even possibly going into overfunding) can feel like the pinnacle of your journey. However, that’s just the beginning.

We’ve put together 8 points which will ensure you take advantage of your success and make it work for you in the future of your business.

You’ve made it through the months of work associated with running an equity crowdfunding round: setting up and executing a social media campaign, attending live pitching and networking events, and building confidence in potential investors.

The investors who invested in your business have done so for a number of reasons, including supporting you as part of your personal network (friends and family), to build and diversify their investment portfolios (online business angels, experienced angels), as part of a larger strategy (VCs), etc.

As well as the capital you are raising and the connections you are making, you are also building a community during your equity crowdfunding round.

After the round has successfully closed out, it is up to you to take advantage of that community and all of the benefits which come with it, one of which is that they may feel more inclined to invest in future rounds if they feel involved throughout. But how can you keep investors involved? 

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Here is our checklist for how to manage shareholder communications and maintain momentum, post-funding:

  1. Think about the wording you put out in communications.

    For example, a “thank you” signals an end to something, whereas a note of “congratulations” makes investors feel involved in the future of your business, rather than as though their job ends once you have their money.

  2. Respond in a timely manner.

    Make sure you respond quickly to comments posted on the online equity crowdfunding platform your investment opportunity was listed on. If they have questions, it shows that they’re interested for the future of your business (outside of the fundraise) and they deserve to be answered within a short timeframe. If someone in your office came to you with a question, you’d endeavour to answer them as soon as possible. Well, it’s no different with an investor; they are a part of your team and should be treated in a similar way.
  1. Communicate consistently.

    Not all of your investors will be following every outlet you put information out over. For example, don’t just put your message out on one form of social media, because if they don’t follow you on Twitter (and that’s where you predominantly post updates) then they’ll miss out on everything that’s going on. It’s up to you to present a consistent message to investors and deliver all relevant information, such as key achievements (staff hires, product development, etc) across all platforms – social media, the crowdfunding platform you were listed on, emails - to ensure that everyone is kept up-to-date. Investors love to see the progress you are making, so make sure you showcase your milestones and successes in a way they'll be seen!

  2. Keep a blog.

    Similar to point 3, this is about distributing information as widely as possible. Creating and maintaining a blog can be as quick or as time-consuming as your schedule allows, as it can take the form of written articles or photo-based posts. A blog is also another place where you can invite online interaction.

  3. Be seen.

    Leading up to, and during, the crowdfunding campaign, you should have been attending networking and live pitching events, meeting with VCs, and product demonstrations. This doesn’t need to stop when the fundraise ends. It could be worth organising a product launch event, informal gathering, or one-on-one meetings with investors. Another option would be to hold Skype-based Q&A sessions.

  4. Follow up on connections.

    Do your own research on the people who invest in your business. Some of them may be able to offer you more than monetary investment, in that they may have valuable connections, expertise, and knowledge that they can pass on to you. Reach out to your shareholders for specific introductions. Many of them will be well connected and have diverse networks that they may be excited for you to tap into.

  5. Discuss ideas with investors.

    Use your investors as a sounding board for new features, products, or services. They may or may not actually be your target audience, but if they’re experienced investors or sector experts, they may know what does and doesn’t work / what has or hasn’t worked in the past / why it did or didn’t work, and how all of that knowledge can be applied to your own business. Also, if you are facing specific challenges it may be worth reaching out to shareholders for the answers you need.

  6. Plan for the future.

    If your business executes its growth plan successfully, it is likely that you will need to conduct follow-on rounds in the future. Now is when you should decide how to encourage investors from this round to invest again. This doesn’t mean hassling or begging people, but rather showcasing your hard work, successes, and key achievements (as they happen) so that they feel more inclined to invest again. It is better to keep people in the loop consistently, rather than simply going quiet after close out and then getting back in touch when you need money.

 

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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.