From mid November to mid December last year, we ran a crowdfunding campaign. It feels slightly surreal to be on the other side of it to be honest. We managed to raise nearly £17k in pledges just before Christmas and in an intense political climate. It was a big achievement for us.
In the grand plan of things we had always hoped to raise part of our funding via crowdfunding, but crucially we’d imagined this would be after we’d signed a lease on our premises and had planned our marketing campaign for launch. Here's a handy pie chart we made to try and illustrate where we're hoping to source money from:
As it stands, we HAVE found a premises we like and will work brilliantly for the cafe, but we still need to agree the lease terms with the landlords.
The reason we decided to run the campaign at this point is all down to a competition Natwest were running with the Crowdfunder platform supporting women trying to start their own business. There seem to be a few of these running under the Back Her Business banner - so if at the end of reading this post you’re a woman trying to start a business and think crowdfunding is the way to go then it’s worth checking out.
The competition we were part of was called "Side Hustles", and the incentive of winning extra cash for the cafe on top of the money raised from crowdfunding drove us to enter. Thousands of different and brilliant projects were part of this from all over the UK….. AND WE ONLY WENT AND CAME SECOND IN IT!!!
This was with the two of us running it alongside the usual havoc of our lives, and Amy literally just had a phone to do it from. Second prize was £5,000 - bringing our total raised to just under £22k, so right now we are feeling very proud of ourselves. (yes, we know the pie chart graphic says £30k - read on!)
Here’s some stuff we learned and found useful from running our crowdfunding campaign:
Which sort of Crowdfunding is right for you?
There are two sorts of crowdfunding platforms - one is investment crowdfunding (like Crowdcube) where people who pledge get a stake in your business and return on their investments once your business starts making money. The other sort is reward based crowdfunding, where people can pledge money in exchange for rewards - and sometimes people just pledge as a straightforward donation too.
Crowdfunder is the latter and we felt the reward based system would work better for us. When planning the campaign we tried very hard to offer rewards that we thought people would actually want or use.
Give people rewards they actually WANT.
Some of the rewards we thought would be popular - like the socks and travel mugs, were not that attractive in the end. Whereas experience based rewards went down better. If you can help it, don’t buy in any special rewards just for crowdfunding purposes. We bought the socks in bulk and paid upfront for them before we launched just so we could send them out to people before Christmas.... and now Zoe's still got a big box of socks blocking her front door! At least we can sell the remaining socks (SO MANY socks!) in the cafe when we open.
Do your research.
We had done our research on crowdfunding, we have read a few books on funding for start up businesses and attended a talk by Sarah Cowl of local marketing agency The Rainbow Mash on a successful crowdfunding strategy they ran. Her excellent blog post based on that talk is here.
We also discovered another snappy article around the art of running a successful campaign here. And Natwest also produced a decent set of guidelines for planning and running a campaign too. You can download these here:
We looked at other comparable projects on various crowdfunding platforms to see what they'd done with their videos and campaign pages. We basically cherry picked the bits we liked as ideas to inform our own page and video. Crowdfunder were also extremely supportive with advice throughout the process.
Crowdfunding is NOT EASY free money.
If you just need cash, a loan will be far easier to get sorted. Crowdfunding is intense and stressful and needs constant thought. You should do it mainly as a way to promote what you’re doing. The money is GREAT, don't get us wrong, but it's only a small part of what crowdfunding is about.
From running our campaign we ended up on the front page of The York Press and many more people now know about us and are interested in what we’re doing as a result. This includes people who are interested in becoming private investors in the business.
It has also made some of the other sources of funding take us more seriously. If you're in this position - trying to line up funding from several different pots, then crowdfunding could help demonstrate to lenders nervous about committing to your project that you have a market willing to invest in you. It's a bit like writing a film script which no-one seems bothered about making until you tell them Steven Spielberg has pledged to direct it.
Line Up Some Big Pledges!
The more you can pre plan a crowdfunding campaign, the better. We didn’t really give ourselves enough time to approach anyone who might have been able to make a big pledge before we started.
In particular we should have thought more about the corporate angle before we launched our campaign. It would have served us better to talk to companies who might have been interested in making a pledge from a long way out to give them time to look at their budgets. We also should have given more thought to rewards that appealed to those companies at the outset. We added an away day package halfway through the campaign but at that point, just before Christmas, it was too late.
We would also advise anyone thinking of going in for crowdfunding to think about any partnerships which might work for what they’re doing - in our case, contacting the baby workshop groups in the area to see if they would have been interested in advertising space once we open our doors… or local printing companies to see if they’d have been up for sponsoring signage etc.
Know Your Audience!
Most of our crowdfunding campaign was conducted on social media, we knew from experience that our audience hang out on Facebook and Instagram. Facebook also gives you great insights about what time your audience are online. So we were able to time our posts to go up when they'd have the most impact.
We also had an interested audience subscribed to our mailing list so we sent several emails to this group too. Cultivating a mailing list following has proved valuable to us. Zoe has been listening to Jenna Kutcher's Goal Digger podcast for advice on building this particular audience.
In addition to social media, we also wrote a press release (with the help of our lovely friend Joe who does that for a living) and got it out to local radio and tv, magazines and papers. If you have any friends who have useful skills, like taking photos or use graphic design packages or write press releases / work in the media then call in their help early on. It really is all about WHO you know.
When we were meeting people face to face at our events while the campaign was live we gave out little business card flyers with the crowdfunder url on so people could pledge when they got home.
We tried to be very considerate with our content as we realised that yelling GIVE US YOUR MONEY for a whole month would turn a lot of people off and lose us followers.
Give people content they will love...
Figure out what the motivations would be for people to want to pledge and change up what you’re saying every day. In our case we wanted to highlight what we’d be doing to help the high street and how we’d help maternal mental health as well as elements like open ended play. If you look back through our posts over that month you’ll see what i’m on about.
We learned that people buy into people. Use pictures of yourself and your team wherever possible. It’s really good to highlight the human side of what you’re doing and be truthful about what's happening.
Set yourself a manageable target!
The original hope was to raise £30k from our campaign. Our view was that we only had one crack at people's goodwill and crowdfunding so it was all or nothing. We should have been more conservative given the time of year and political climate. The UK is now in uncertain Brexit times so people are more cautious with their money.
About a week into the campaign we realised we weren't going to make our target. This was both disheartening and stressful.
Crowdfunder offered to change our target in light of the situation and we decided to halve the it to £15k. We were truthful and positive about why we'd done it and made sure it was clearly communicated to our supporters. We didn't get any negative backlash from doing this and it meant we had a successful campaign at the end of the day, but it was a good lesson to learn.
Be prepared to talk proudly about yourself and your project lots!
Let's face it, crowdfunding is basically you putting your idea in the public view and hopefully having it validated by a load of people. That's very scary unless you're a very confident alpha person. We love our idea, but blowing our own trumpets does not sit naturally with us - is this a British thing?? Is it a woman thing?? Either way, we're pre-conditioned to be anti-arrogant which meant giving ourselves the BIG SELL, recording a video and being loud and proud took getting used to.
BUT GUESS WHAT? You can talk proudly about an idea without coming over like an arrogant idiot. Very empowering and a crucial skill to have to learn (we're still learning) if you're building your own business. Running a crowdfunding campaign is a baptism of fire in this.
Crowdfunding can give you and your project so much more than money if you're prepared to put the work in. Feel free to get in touch if you have any questions about what we did and are thinking of running a campaign yourself!