How to attract investors to your crowdfunding raise
Updated: 2 days ago
Crowdfunding is a capital raising method that gives founders control of their growth journey. It lets anyone become a shareholder in a company they believe in, regardless of their income or investing experience.
Because you're raising from the public, your success relies on your ability to create, engage and attract a crowd. In this blog, we review the four crowds you, the founder or campaign lead, can tap into during your equity crowdfunding raise with OnMarket.
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Crowd #1: Your Inner Circle
Your inner circle are the people closest to you: family, friends and existing shareholders. This group is your greatest asset. They're the first and most important audience to talk to, and ideally, the first to invest.
"When people see others investing, they feel more confident to invest too."
Why should they invest first?
People who know you are more comfortable investing, because they're mainly there to support you. When the wider crowd sees a number of people already invested, it gives them the confidence to invest too.
What if they can't invest?
They can still be a great support to you and the campaign. Turn them into your cheer squad, brand advocates and ambassadors. Ask them to share your social posts and spread the word. This increases your reach and gives you the best chance of raising more.
Someone in your inner circle might not invest, but they may know someone who will. Or they know someone who won't, but knows someone who will.
Why does momentum matter?
Your inner circle is crucial for getting the ball rolling. Building momentum takes effort, but once it starts, it tends to keep going.
Think of a row of dominos. It takes a push to knock the first one over, then the rest follow. Your inner circle plays a big role in getting your raise off the ground.
Crowd #2: Your Crowd
Your crowd is your professional and social network. That's people you've worked with in the past and people you know through other people. It also includes the professional and social networks of everyone with a stake in your business.
How do you reach them?
Use the awareness your inner circle creates. Get your inner circle talking about the raise first, then share that momentum with your wider network. For example:
How should you talk to them?
Have genuine conversations with your network. Keep them updated on how the campaign is progressing and invite them to share it or ask questions. It's worth reaching out directly to people who could introduce you to others.
When should you start?
Start engaging them shortly before your EOI launch. Share interesting nuggets about your business so far, or what you're hoping to achieve.
Here's an example of how this could look in the first two days of your campaign:
When | Who posts | What to post |
Day 1 | Your inner circle | Let their networks know your expression of interest (EOI) period is now open |
Day 2 | You | Share how many people registered their interest on day one |
Crowd #3: The Crowd
As the name crowdfunding suggests, you're raising funds from the public. Beyond your inner circle and your crowd is the crowd. It's made up of high-net-worth investors (HNWs) and everyday investors. Engaging both ends of the spectrum is key to a successful campaign.
How do you reach them?
Through your inner circle and your crowd. The awareness they generate will naturally attract a larger crowd. The capital raised from your closer crowds also opens up more marketing opportunities and leverage points.
What's the bonus?
Marketing your raise also builds brand awareness, so more people get to know your product. You may see growth in customers, social followers, brand ambassadors and sales. It's a valuable added benefit of crowdfunding.
Crowd #4: OnMarket’s Crowd
Investors in OnMarket's Crowd
60,000+
Share of ECF funds raised from our crowd
20-30%
OnMarket's crowd are familiar with capital raising. Some invest in IPOs, some in wholesale rounds, and many in equity crowdfunding raises.
What do they look for?
Our investors are good at spotting deals that have potential and can prove they're filling a market need. Strong investment traction and great marketing go a long way with them.
Why does your own crowd matter?
Our crowd follows your crowd. For this reason, it's important to leverage your crowd as much as possible... starting with your inner circle. On average, the OnMarket Crowd accounted for 20-30% of all ECF funds raised last year.
Ready to build your crowd?
Every crowd builds on the one before it. Start with your inner circle, grow through your network, and you'll give yourself the best chance of maximising the capital you raise.
