Wednesday, 17 February 2016

Seedrs vs Crowdcube - who to chose when crowd-funding?

Having now raised two rounds of investment with the help of Seedrs.com, I often get asked for advice about which company I would chose (if I could do it all again).

Having not worked with Crowdcube, the question for me really becomes, would I recommend Seedrs and why?

Over the years I have always passionately defended Seedrs and my reasoning was on several different levels.

1. Values - I have heard and read some negative things about Crowdcube from an ethics point of view, relating to how little support small campaigns get and how they over-state the amount of money they helped raised to include funds raised by the companies without their help. Seedrs, from my experience, has values that are more aligned to ours at Rare Pink in terms of their integrity, authenticity and passion for helping each other succeed.

2. Due Diligence  - Comparing campaigns I have seen on Crowdcube and Seedrs, I think Seedrs are more diligent in terms of who they let on to the platform, making it harder for you to launch your campaign... and that's a good thing. You want to have the best chance of convincing investors and if someone can tell you what needs improving before you're investor ready, then I see that as value being added.

3. The Underdog - On a personal level, I wanted to work with Seedrs to help them to do well too. I think Seedrs has for some time been slightly smaller than Crowdcube (though not anymore it seems - now ranked number one in various categories of investment).

They both have similarly large number of investors. I believe you will have the same access to funding by working with either of them but I feel Seedrs try harder by having had to play catch up in the past.

What about the money?!

To be completely honest, I do feel that the most important thing everyone cares about is: "will the one platform help me to raise more, faster (or at all)?"

I can't answer this accurately. Crowdcube has had more high profile successes from what I have seen but I also feel like more campaigns are live at any point in time compared to Seedrs, thus diluting investor interest.

The secret no one tells you when you start...

So let me close this post off with a little secret. We got more value out of Seedrs in what they do after you raise than we got during.

This is not to say they did not do everything they could to help us raise... what I am saying is that there is enormous value in the admin and legal work they do that would otherwise have involved me spending hours trying to learn my way around what is a confusing landscape.

For two years we raised without the aid of paid legal counsel. I DO NOT SUGGEST THIS - we learned on our second round that it is important to get legal advice once your funding round starts to get more complicated (think VCs, accelerators, options, parent-child company structures etc.); and we now have legal counsel.

The benefit of having Seedrs as an ally was huge and as a first time fund-raising entrepreneur you can not know how complicated things can get and how much work there is around the closing of a round.

So yes, I would pick Seedrs over Crowdcube and give them a solid 10/10 in terms of how likely I am to recommend them.


Wednesday, 9 July 2014

Crowd-funding hacks for UK start-ups

We are very fortunate to be able to announce that we have raised £200,000 from over 150 investors, crowd-funding for our bespoke engagement rings business, RarePink.com

Tim Ferris, in his famous post on crowd-funding repeats over and over again that the secret to the success of a large and quick campaign lies in the preparation you do prior to launching.

For us, this meant:
- a business plan with forecasts
- a slide deck
- a video telling our story (for great start-up videos I recommend Sam)
- an email list of friends
- a close team of supporters ready to assist in any way they can
- investment from a few people you know prior to launching your campaign
- a press release about our raise and several others during the campaign
- an outreach strategy to crowd-funding blogs and journalists
- a killer social media campaign to get people excited before, during and even after the the campaign.
- a plan for who will take over some of my responsibilities as CEO.

This last point was a particularly painful lesson as I did not anticipate how much of my time would be needed. If you want to raise a round through crowd-funding expect about 3/4 of your time to be spent on this alone.

Once we launched the campaign I spent more time in the the next few months with potential investors than I did with friends and loved ones.

Some hacks I suggest from this experience:
1. Always ask investors how much they are planning to invest. Avoid meeting those who will invest less than the cost of the time to meet them (and the opportunity cost of meeting someone else).

2. Be careful how you answer questions publicly about your campaign. Tricky ones tend to be about how you can justify your valuation. Be firm in you belief that the company is worth AT LEAST as much as you say it is.

3. Do not get emotional about criticism. Your aim is not to convince everyone, 1% is enough.

4. Ask the people who didn't invest "why not?". Address their issues immediately. Tell other potential investors about the steps you have taken to improve upon these issues.

5. Such is the pressure that I suggest you take regular breaks away from it all to not be overwhelmed. This experience was not too far off from university exam stress, but with much more at stake.

6. Watch what other companies are doing who are competing for investment with you on the same or other platforms. Little tricks, their media features, how they answer questions – all these little insights will help you to adapt and improve your campaign as you go.

7. When asked about how you came to your valuation, you need to have an answer that is ROCK SOLID. Consult with an expert on this and learn your answer off by heart.

8. Post regular updates about your business and successes such as  media features, sales performance etc. Investors will talk to their friends about you more often if they have a cool story to tell. We published interesting themed bespoke engagement ring designs, like this Wimbledon themed one which got picked up by Elle and Glamour magazines.





Thursday, 10 October 2013

RarePink.com - luxury diamond jewellery retailer launches TODAY!

We are very excited to announce that we have launched the all new Rare Pink website today. Customers from around the world can now create beautiful and custom engagement rings and diamond jewellery from the comfort of their home. Please see the full press release for the launch of Rare Pink - Diamond Jewellery here.

To our team around the world and all the people who supported us, I would like to say a very BIG...