When Pavegen announced their first ever crowdfunding round, there was a mutual sense of anticipation amongst the team. Unlike a regular investment round, crowdfunding is completely unpredictable in its outcome.
Some companies do extremely well and overfund past their original target, whilst others with equally innovative products never successfully reach their target. According to Crowdcube, 52% of businesses successfully crowdfund on their platform; it’s very hit and miss, in some cases.
We settled for a £750k target on Crowdcube, which we ended up reaching in just 59 hours. The success of our achievement had Pavegen acclaimed the fastest grossing clean-tech company on the platform.
Our campaign ran for 45 days, in which we managed to reach the £1 million mark in under a week, closing the round with £2 million secured in investment (275% more than our initial target) and 1555 investors backing our technology.
Founded in 2009, the company has raised in excess of £2.5m in revenue worldwide. The crowdfunding round will help shift Pavegen from smaller, experiential projects to large-scale, permanent installations in the public space. We learned several lessons through the duration of the campaign:
Consider all your options fully, including other crowdfunding websites
This really depends on your market and intended financial targets. For us, Crowdcube was ideal because of their extensive network of investors. Additionally, the platform seemed to have a positive track record with technology start-ups; which definitely worked in our favour.
But we carried out a huge amount of research before we reached this conclusion. Crowdfunding isn’t for everyone. There are companies that work better with a select group of investors backing their product or service. We decided to harness the power of the crowd to help us reach the next stage of development – in the same way our tiles harness power from the crowd’s footsteps to generate renewable electricity. Communities are an integral component in our product; so why not include them in all stages of our growth?
Setup mission control for the duration of the campaign – all your efforts should go into this
When crowdfunding, you need to be aware that the eyes of the public will be on your business. You need to know that they could ask you anything, to which they expect a suitable, informative response. We went into our Crowdcube campaign with a huge amount of energy, adding to the hype of our first venture of this kind with fresh ideas and innovations.
>Related: EU ponders applying VAT to crowdfunding
We created ‘mission control’ in our office; a team focused entirely on Crowdcube, answering queries and updating the forum as frequently as necessary to keep the investors hooked.
Keep the momentum going
We launched our investment round alongside our first installation in the financial district. 10 tiles in the heart of Canary Wharf demonstrated the potential of footfall energy in the public space. This installation, in partnership with Canary Wharf Group, not only spearheaded our fund raise but also gained us the initial boost we were hoping for – we were featured in several publications and live broadcasts, reaching our £750k target in 59 hours.
I found that the trickiest part of the campaign was maintaining this momentum. After the initial launch, the crowdfunding aspect itself becomes old news. To combat this, we collaborated with some of the greatest brands in the world, including Formula E, Sunglass Hut and Engie (formerly GDF Suez).
Additionally, we created an entire marketing plan, ensuring that every piece of content that left the company didn’t go unnoticed. Our CEO and Founder also participated as a guest speaker at a variety of events, including Bloomberg Smarter Cities, TED, NBC Universal Technology Event, British Retail Consortium and Superyacht Design Week. Each opportunity helped spotlight the company, raising awareness for potential investors.
‘Seed’ the round
It’s important to gain investors and commitment from your network group before actually launching the campaign. We hosted an ‘investor evening’ and seeded the round with £350k, which allowed us to hit the ground running and build on investor-company relationships at an early stage.
Online profile is very important
It’s imperative to maintain a positive profile across all the online channels; not only the company accounts, but personal accounts as well. Investors can carry out a huge deal of research before committing to a company, so a friendly, approachable online persona is vital. Answer queries as soon as you can, and make sure your enthusiasm and support for your own business is crystal clear for everyone to see.
Further reading: Can you identify the genuine crowdfunding campaigns?