Crowdfunding is the hot topic du jour. The internet has made it fast and easy to communicate with thousands of potential investors at minimal cost. A business can be pitched to investors entirely online, with no need for frustrating meetings with bank managers or constantly trudging around seeing angel investors. However, as I’ve discovered, you have to work hard to attract the public to invest and by far the most important aspect of your pitch is the short video outlining why people should put money into your company. Here’s what I have learned:
First up, you will be making a sales pitch. Producing your video is a central part of this pitch on any crowdfunding platform, but there is a subtle twist. You must remember that you are selling an investment opportunity. You are not selling your product or service, neither are you selling yourself or your company. You are simply selling the opportunity to invest. This means that most of your audience will be interested in one thing: how they can make money from investing in you.
That’s what you have to persuade your audience of, albeit with some risk warnings. So the key questions you have to answer are:
Why should this investment make me money?
How much might I get back?
Before you answer these questions, you will need to talk about the problem that you are solving, how you can solve it, the size of the market and how your company will get profitably paid. Way before anyone touches a video camera, you need to think of a way to get these points across and then put them into a script.
However, if you have something more fashionable that does real good for the world, then there is an alternative: you can pitch the investment on the moral case for the business. If you can get a celebrity endorsement, then it’s more likely to succeed. But this doesn’t apply to most startups and even the richest potential investors will need a clear story on how they will make money.
Having worked out a script, you will then need to decide who will take part. You need one or more people who not only look good on screen but have ace presentation skills. The choice of who would participate was simple for us – the star had to be my younger, more photogenic business partner.
Although I wrote the script, my part on-screen was just to talk through the financials. My white hair and a few wrinkles possibly made us more credible. We also lined up some of our customers to explain our proposition. This worked well.
The whole thing was shot by a videographer and producer who had worked with us before. He was brilliant and cost around £1,500, which was not too expensive. Good but reasonably priced people are hard to find, but with effort it is possible to locate them. Of course, you could shoot and edit things yourself, but our strong feeling was that getting a professional in was money well spent.
Although we had a script, we didn’t stick religiously to it, and we shot much more material than we needed (the ideal video length is up to five minutes). This left our video guy with the editing job. That meant that we controlled the broad themes, but he was able to use his experience to make it punchy and interesting.
The end result
Of course, the proof of the pudding is always in the eating. Over 12,000 people viewed our pitch and we ended up with 159 investors putting in £584,870. It’s not often that hard numbers can definitively say whether marketing has been successful or not, but in the end we feel these figures tell a very positive story.