The Rai$e Rundown: What you need to know about equity crowdfunding told by Doctors.com.au
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To assist Founders, CEO's, and business leaders on their equity crowdfunding journey, we interviewed Doctors.com.au - a HealthTech startup who raised capital via equity crowdfunding with OnMarket in 2021, for insights into the capital raising method and tips from their learnings.
To watch the interview, click the video below. Alternatively, continue reading for the written transcript!
What is Doctors.com.au?
Doctors.com.au is a health tech platform that re-establishes health care routines online. The platform uses artificial intelligence to remind patients of when their next appointments are due. Our mission is to prevent healthcare conditions – and we are using the funds raised in December 2021 to accelerate the development of our app, which is to be released mid 2022. Lidia and Lana are twin sisters who have co-founded Doctors.com.au, and have crafted their business based on personal experience.
What do you think of equity crowdfunding?
Equity crowdfunding is different because it forces you to sell your business to the public, so it’s a great tool to raise capital but also gain business exposure. It’s certainly not an easy means of raising capital, and sometimes people underestimate the time and resources your campaign will require.
What do you wish you knew before raising capital via equity crowdfunding?
Lesson #1: There’s a lot of backend work, and admin work, that you need to be aware of. This can be time consuming, but it’s important you know in advance so you can wrap your head around what is required and ensure you leave the appropriate amount of time to get it done so it doesn’t push out your timeline.
Lesson #2: Keep in mind important dates of the year, for example Easter and Christmas. You want to give your raise the best shot at succeeding, so key calendar dates, when many people are disengaged or enjoying time off with their family, is not a good time to have your raise fall on.
What advice would you give other founders?
Tip #1: Always think about why your business is different, and what makes it different. This is your unique selling point that you should push throughout your campaign. As entrepreneurs and as founders you sometimes you don’t see or appreciate a highlight – because if you see it all the time it’s not significant anymore. However, these important statistics or points of differentiation are the key elements that drum up the crowd and get them excited to join your business as a shareholder. You need to really sell yourself and have a unique offering – in saying that, make sure you have a record of all these highlights that you can speak to throughout the campaign. You want to have new news you can announcements on a week-by-week basis throughout your campaign.
Tip #2: You’re not selling your product; you’re selling your business. You must put your investor hat on and focus on the business as a whole, rather than individual products. You need to build the appetite to attract investors – put your investor hat on and ask yourself, ‘what do they need to hear to pull out their wallet and invest? What statistics or evidence could I give them that would reduce the risk of investment?’.
Tip #3: You need to be able to problem solve, consistently and quickly. It’s interesting with crowdfunding because you need the capital support from the crowd to be able to finish building your product, but you need to be able to sell your product to the crowd in order to receive the capital support to build your product. So you have to think about problem solving vertically and be able to sell the product without selling the actual product – for example, selling the market need and desire.
I remember you first came to OnMarket with an incredible idea and the basics of your business built, but in order to build the hype and FOMO and truly attract the crowd, we thought it would be best ideal to build your traction… and you did that in just three months. So my question to you is; how? How did you build your traction in 3 months, and so much so that you attracted high net worth investors?
Going back on our last point, about considering ‘what do they need to hear to pull out their wallet and invest?’ – this is exactly what we did. We needed the capital raise to complete building our product, so instead Lidia and I problem solved and decided to prove that clinics would be willing, and wanting, to implement our products. We hit the pavement so to speak, went to clinics, sold our proposition, and received signed contracts of practitioners saying ‘yes, we will use your products when they’re ready to be used.’ As we were pre revenue, we didn’t have the product yet – well, at least at the time. So we needed to problem solve to overcome the fact that we were pre-revenue, and get creative as to how we can sell a product that doesn’t exist. So, instead of selling our product, we sold the market appetite for our product and the market need for our product. By doing this, we were able to show that by getting the money from crowdfunding, we would be able to grow our traction and revenue. Therefore, reducing risks or barriers to invest.
Your partnership with the cancer council was a huge benefit to your raise and to your company because it validated the market need and uptake of your product. Do you mind giving a brief explanation, or advice, on how you formed that partnership? With such a credible, well-known name?
Again, it’s all problem solving. Putting your thinking cap on and considering ‘who could potentially be your stakeholders? Who has a shared vision? What business aligns with your mission?’. If you have the same goal as other companies, the chances are they will want to work with you if you can offer something to the public. In our case, we save lives. Our health tech focuses on preventative health checks, which can prevent cancer or catch cancer at an earlier stage. So, having the same overarching goal made it easier for us to catch The Cancer Council’s attention. My advice here is to keep calling, not pestering but preserving, call until you at least know who you need to speak with directly because half of the time your calls aren’t speaking to the right person. So, finding the right person to speak to is half the battle. Once you do get the right name and number, your matching goals and visions speak volumes and do the convincing.
How do you navigate problem solving when you’re in the depths of an equity crowdfunding raise?
I think for Lidia and myself, it’s always in our nature to have a backup option – for example, say we don’t have X number of investors, we’d ask ourselves ‘what does that mean & what’s our next option?’. Having a fall back, and having a plan, or even just having thought about it, when and if it does happen you won’t feel as stressed about it. Pick yourself up and dust yourself off – you have the next step forward, it may not be 10 steps forward, but at least you have the first step leading you in the right director to alleviate stress.
Exactly right, forward thinking and planning for different situations in advance. The crowdfunding campaign does run over a few weeks, but it does go really fast, so if you need to do a social media campaign midst revenue raising you would need to have a plan for that. You’d need to know your audience, cost, contacts, and what messages you’re going to send. Forward thinking really takes the stress off of initiatives and problem solving during the crowdfunding campaign.
How valuable did you find PR? Do you think you received a good ROI?
We were featured in every large publication across the country by NewsCorp. For example, Herald Sun, Courier Mail, so all the big names in print and online. The real asset that came out of PR for us was being able to push that further and online during the campaign – so using the story of being in the news and pushing that to investors. Not to mention, having Doctors.com.au featured in large news publications created great brand awareness, which is a huge benefit to our business and any startup.
Do you think it made a difference to your raise?
I think so. It also brought credibility to our story, because if it’s being picked up by the media then it’s something people want to hear about, and if people want to hear about it then people will want to use it, and if people want to use it then it’s a business worth investing in.
Any final comments?
Crowdfunding is a journey, and it is an exciting one. There’s highs and lows, but those highs are exciting because it’s the tool, or the means, to get your business to the next stage.