NO, CROWDFUNDING ISN'T EASY
In 2015 we raised a million pounds via crowdfunding. There was a lot of press exposure, and I was inundated with requests for advice. How can we do that too? I still get them.
A common misconception is that crowdfunding is 'easy money'. You just stick it online and watch it go. These attempts always fail. It is a failure to understand what is involved, what is at stake and, I might venture, a lack of respect for their audience.
Crowdfunding was the single most exhausting thing I ever did at Vulpine.
There were the months beforehand of intense due diligence and preparation. I was terrified of public failure, which would have ruined our chances of getting investment elsewhere, if we failed.
I worked through the night for the first week of the raise, replying to every one of the 1000+ business plan requests personally. I replied to every single social media post and platform forum comment myself.
A strong business plan, with clear evidence of outstanding growth and a loved brand were the launchpad. But it was attention to detail, clear and approachable founder-led communication and an awful lot of work that nailed it.
Crowdfunding can be a wonderful experience. But anticipate weeks of stress and tiredness to nail it.
A Cautionary Tale:
By contrast, Vulpine opted to crowdfund again in 2017. We moved forward plans to do this when most of our stock was delayed, causing what we expected to be a temporary cashflow squeeze. We had great results to announce and the company was growing fast. We had a wonderful experience in 2015, nearly 600 new investors and advocates, and it felt right to go down that route for investment again.
The problem was we were now forced to do it faster than expected. So instead of announcing superb end of year results, growth and recovery, our last full financial year, from 11 months ago, was a bad one. This shadow, due to the enforced rush, meant we never got the vital momentum we needed, and we pulled the proposal.
But the damage was done. The failure was public, denting our prospects with other non-crowdfunding investors, who now had little time to do their due diligence. So, despite our growth, brand presence and loyal customers, we went bust because we couldn't fund late stock, because we couldn't raise sufficient private investment, because we'd publicly failed at crowdfunding, which squeezed the timetable even further. It was a snowball that grew shockingly fast.
Within weeks a cashflow concern that needed mitigating became the death of a growing and much talked about brand. It can happen.
Crowdfunding can be wonderful. It can be hell. It is not easy.