In 2017, Roomi launched an equity crowdfunding campaign through Republic.
My team and I elected to run this campaign even though we’d raised over $17 million as of 2017. And for our Republic campaign, we confidently set our goal at yet another $1 million.
At this point, you may be asking why we’d go to the trouble of creating, marketing, and managing an equity crowdfunding campaign in spite of already having so much capital.
Well, I believe that every startup – even those with $17 million in Series A funding – should host a crowdfunding campaign.
That much capital can afford you a lot of acquired users. But, at that stage, your priority should be building a community. How can you find and grow a base of people that engage with your brand beyond simple usage?
The answer is investment. Investing in a startup – regardless of that startup’s size or success rate – gives people a more significant reason to discuss and care about that brand.
When someone invests, they have “skin in the game” beyond consumerism. Investment makes someone a brand ambassador and changes their perspective on the relationship they share with that brand. If they believe in a company enough to put funds towards its success, they’ll be the first to talk about it with others.
Letting customers into your company through investment gives them ownership and makes them a part of your success. In return, they help you do your job of spreading the word and providing feedback.
So, providing opportunities to invest not only benefits you through funding and engagement but also creates a sense of honesty and responsibility among your investors.
And that’s not something you can pay for.
Breaking Down Roomi’s Campaign
Running an equity crowdfunding campaign for Roomi was one of the best decisions I’ve made for the company.
I was initially introduced to Republic’s founder by an investor of Roomi’s. He was using the platform to invest in other companies. Because he’d worked with and was personally invested in Republic, he eagerly passed on the word and shared about Republic’s platform.
See how investment can do that? That was when I knew a campaign could benefit Roomi beyond money.
Republic was a good fit for us because it gave us a chance to expand our shareholders. We didn’t have a physical product to sell, so we knew sites like Kickstarter or Indiegogo wouldn’t quite work.
Republic runs equity crowdfunding campaigns, meaning investors own stock or shares in each company. Kickstarterand Indiegogo are different in that investors pre-purchase a product as part of their “investment.” Similar platforms to Republic are WeFunder and SeedInvest.
Republic also prioritizes minority and diversity-driven startups. As an expat, immigrant entrepreneur, this was important to me. Republic gives everyone the chance to raise money for their company, meaning people besides the white, male CEOs in San Fransisco can taste success, too.
Since we launched the Republic campaign a few months ago, we’ve acquired almost 500 investors who’ve helped us raise nearly $150,000. Our goal is $1 million, but we’ve far surpassed our minimum of $50,000. The campaign itself is still open for another month, and we hope to continue to see growth through the final days.
The very best part about this campaign is seeing how many people genuinely believe in Roomi. Through this opportunity, we’ve acquired almost 500 brand ambassadors we couldn’t have found otherwise. I’m happy we took this approach and know that these folks are going to continue to help us grow.
My Advice To Others
If you’re interested in running an equity crowdfunding campaign for your startup, listen up. There are two main parts that you must prepare for and master if you’d like to see your campaign succeed.
First is campaign creation. You must recognize that a crowdfunding campaign is essentially pitching a ton of investors at once – only digitally. The goal of your campaign is to provide as much information about your business as necessary to make your viewers – and, ideally, investors – comfortable with your company and its projected success.
This could look like sharing video and articles, talking about your team members, and getting into the nitty-gritty of your business details.
The transparency required by a crowdfunding campaign made me uncomfortable at first, but I promise you it’s worth it. That information will be shared at some point, so you might as well control its release and make it part of a more significant endeavor. At the end of the day, your investors deserve to know how your company is doing and how you plan to grow it.
The question you should aim to answer with your crowdfunding “pitch” is this: How can your customers, users, and potential investors feel secure and confident that your business will do well with their funding? Do whatever it takes to answer that question.
Second is campaign promotion. A common misconception with crowdfunding is that the majority of the work happens before is campaign is live. That’s simply not true. For your campaign to see success, you must work extra hard to get it in front of those who may invest.
How? Start with your users. (I can’t stress this enough.)
Crowdfunding isall about community and the power of people – hence the word “crowd.” If you're going to raise money from people, start with your people. Ask any your customers, users, clients, social media followers, email list...invite them all to invest.
Next, advertise to raise money. (You’ve heard the saying “It takes money to make money,” right?) Well, it’s true here, too. You can acquire investors like you acquire users. Leverage paid advertising to spread the word about your company and campaign.
Post about it on your website. Share your campaign with friends and family. Network and talk about your company with both peers and strangers. Also, spend time answering questions and being available to your investors.
Crowdfunding takes a lot of work. There’s no way around it. But, the return on energy is worth the investment – both with money and community. Crowdfunding creates brand ambassadors and builds a community for which you can’t quite pay. It also challenges you to be transparent and honest about the trajectory of your company – something that investors and users alike will appreciate.
To any and all startups, regardless of your size or funding level, I would definitely recommend running a crowdfunding campaign. You won’t regret it!