The 5 pillars of a successful crowd-sourced funding capital raise
Updated: Oct 6
Based on our experience of working with Australian businesses who have successfully raised capital via crowd-sourced funding (CSF), otherwise known as equity crowdfunding, OnMarket has established the five key pillars to successfully achieving funding goals.
To extract the most value from this article, we recommend downloading the five pillars of CSF success worksheet (attached below) and filling in the document as you make your way through this piece.
Table of Contents:
Pillar 1: Simplicity |
Pillar 2: Launch strategy |
Pillar 3: Killer content |
Pillar 4: An educated database |
Pillar 5: Momentum |
Pillar #1: Simplicity
This pillar is overlooked and the simplest (pardon the pun) to accomplish. As a founder, you’re passionate about the work you do and the service or product you provide - and rightly so! Unfortunately, because of this passion, many entrepreneurs get carried away when discussing their business and forget who they are speaking to - an audience who (most likely) has minimal understanding of the space you operate in and the problem your company solves.
Consider this scenario:
You're in a hotel lift with 5 floors until the CEO of the world's biggest VC steps out.
What would you say to convince them to invest?
Is it the size of the market? The demonstrated demand? Your revenue? User feedback?
How do you keep it simple?
Keep your messaging simple and concise across your marketing and copy, and when speaking to customers, suppliers, partners and colleagues. Use analogies and images to cut down explanation time and help your audience picture your product or service and the opportunity.
How do you back it up?
Support your key messages with impactful data. Say what you need to in as few words as possible, backed by relevant statistics. Ask yourself: could a high school student understand this? If not, it's worth simplifying further.
Pillar #2: Launch Strategy
Luck has nothing to do with the success of your CSF raise. There's a strategic, diligent process for founders to follow that optimises your campaign and gives you the best chance of reaching your maximum funding goal.
What are the phases of a CSF campaigne?
There are five phases in a CSF campaign. The first is preparation, the next is expression of interest (EOI) where you build a database of interested investors, then you leverage this interest and convert those who expressed interest into investors during the private investment phase, and the last phase during your live offer is the public launch – where you open the investment opportunity to the general public.
Why does EOI matter so much?
Over the last five years of CSF in Australia, a strong pattern has emerged: companies with high expressions of interest and an engaged audience are more likely to reach their funding target.
That's because you have more time to educate those who register interest. They become familiar with your business and growth plans, so they're easier to convert into investors. You can then use the momentum from early investors to attract the wider public and create FOMO.
What does your EOI dashboard show?
Once in EOI, you receive a data-driven dashboard that shows you:
The investor's name and contact details
Their reason for investing
The amount they may invest
Business and CSF questions they have
You can use this data to build relationships and improve your marketing.
Pillar #3: Killer Content
CSF is a unique capital raising method because it lets you raise from retail investors (everyday people) and sophisticated investors (high-net-worth or professional investors). With such varied audiences, your campaign marketing is content focused. It needs to be visually appealing, emotive, factual, personal and engaging.
What content works best?
Content that is authentic and genuine, such as behind the scenes (BTS) footage, converts best.
For example, OnMarket raised for Curatif in 2026, a Melbourne-based maker of ready-to-serve canned cocktails. They held an investor webinar featuring BTS footage, giving investors a genuine look at the brand and the people behind it. This contributed to a sucessful resulted in $1.4M invested.
Why is it worth the effort?
The content you create for your campaign is also essential for growing your business. Your potential investors are also your potential customers, so you're building brand awareness and reducing customer acquisition costs while marketing your raise.
What content could you create?
BTS footage
Case studies and testimonials
Educational blogs and featured articles
Product or service videos
Partner features
Stakeholder videos
Brand resources
Pillar #4: An Educated Database
89%
of CSF raises in 2022 were B2C companies
Consumer-focused businesses have begun to dominate the CSF space. That's because B2C businesses already have a database of potential investors: their followers. Their customers, suppliers, partners and affiliates are all potential investors, which makes it easier to build a strong EOI campaign. These groups are your crowd, and they have a big influence on how successful your campaign is.
How do you educate your database?
Through social media, email marketing, PR, third-party databases, referral programs and word of mouth. Leading up to your raise, start collecting email addresses and post more often on social media to build engagement and grow your following. Collaborate with industry partners, sponsor or attend events, and make the most of your website.
Who is your inner crowd?
The people in your network who will help you build early momentum, either by investing or by sharing your campaign with their friends and family. Work out who they are before the raise, so they're ready to act once your EOI campaign launches.
Once your inner crowd and your crowd invest, the general public follows.
Pillar #5: Momentum
The strategy you develop in preparation is put into action during EOI. That influences how much early investment you receive in the private phase, which influences the strength of your public launch. Together, these determine how much funding you receive in this round.
It's like a snowball. It takes the most effort to get it moving, but once it gains momentum, it starts rolling on its own.
How do the pillars connect?
The previous four pillars outline the process of building momentum.
The time you spend simplifying your business model and understanding your point of difference helps you develop your launch strategy and pinpoint your ideal target market. Once you know your marketing messages and who you're marketing to, you can create the right content to educate and grow your database.
Each pillar supports the next. Now that you have all the pieces prepared, it's time to put them together and plan your campaign strategy.
Conclusion
We can't promise success, as external factors can influence your campaign. But if you follow these five pillars, you'll give yourself the best possible chance of reaching your funding goals and accelerating the growth of your business.
If you're interested in learning about CSF eligibility and processes, get in touch with OnMarket here.
