Inspiring entrepreneurs. Delivering growth.
It’s funny the things you remember when take time to think back! Hatty Fawcett was recently interviewed by John Cassidy-Rice and this reminded me her that she has been creating businesses and raising money since she was eight. She got distracted for a few years, but now she is back doing what she loves – helping startups to grow through equity investment. The podcast reveals all…
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Let’s face it, running a start-up (or any small business) is a roller-coaster. There are plenty of ups and downs, highs and lows. Maintaining motivation as a startup founder is challenging. You need resilience and persistence to cope when things aren’t going to plan – but also the ability to recognise and celebrate successes when they occur.
Managing your motivation as a startup founder isn’t easy. Running my start-up, I can vividly recall days when I was as high as a kite with a product breakthrough, a partnership secured or a revenue target smashed. But there were also dark, despondent days when it was all I could do to stop myself giving up and throwing in the proverbial towel. I ranted about how impossibly hard it was, I certainly cried tears of frustration and sometimes just sat, staring into space unable to even summon up the energy for emotion. Perhaps you recognise this?
Many of the startup founders I speak to recognise that maintaining motivation is part of the startup journey – and that you have to dig deep, and look in unexpected places for that motivation.
Founder and MD of Small Pharma, Peter Rands reflected
“At my lowest points the thing I got most pleasure from was reading stories to my daughters before bed, so getting back in time for bedtime became my north star. “
Alessandro Santo, Founder at Last Mile Ventures recognised the frustration of hours of hard work seemingly getting you nowhere but he pushed himself forward by
“being stubbornly optimistic and willing to show the world that sooner or later I will be right.”
Tom Rogers, Founder at MusicGurus recalled his lowest point was when his co-founder left the business but he kept himself motivated by
“focusing on short-term, achievable goals such as finishing a product. I also thought about the thousands of customers around the world that love MusicGurus and share our passion for learning music.”
Another founder, who wished to remain anonymous, was clear about his lowest point – but also about the surprising benefit that came from that
“Early on in our development, we had a conversation with someone who had decades of experience in our particular sector. He challenged us on every single point of our proposition, expressing a serious amount of doubt on our ability to pull it off. We left the meeting shattered, but then we took a lot of the feedback on board and pivoted to a much easier product to launch. It ended up being valuable feedback, despite the pain.
Having a true sense of our purpose has been our North Star. Committing ourselves to this goal (rather than a particular solution) has allowed us to adapt and pivot when it was required.”
Remember, your startup journey is a roller coaster so for every “low” there will be a “high” just around the corner.
Tom Rogers commented on how these “highs” can come from unexpected places
“A most unexpected high came from doing a boot camp in the rain and the mud with our partners from Rockschool (and aching like hell the next day!)”
Of course, you never know when the “highs” are coming – but you have to keep the faith that they will. In the last month I have had two conversations with one startup founder. During the first conversation the founder was close to giving it all up – cash flow was tight, everything was taking at least twice as long as planned and potential investors were sitting on the fence, seemingly unable to make a decision about investment. It was all a waste of time – or so the founder was beginning to think.
Just two weeks later that same founder rang me and was ecstatic, brimming with excitement and enthusiasm again. They had made a product breakthrough, signed a contract with their perfect partner for a trial and the investors had come off the fence and backed them. Like buses, the “highs” had come three in a row!
Next time you are experiencing one of the inevitable lows of your startup journey, remember it can all change in the twinkling of an eye.
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Hatty Fawcett offers one-to-one coaching for startup founders and maintaining motivation, getting business traction and accessing funding are common themes in her coaching. Find out more about coaching
Your business needs investment. You are out there networking and pitching like crazy but despite your best efforts investors remain elusive. It’s a familiar story. How do you get investors “on the hook”? The Allbright Academy which supports female entrepreneurs, approached Hatty Fawcett, Founder of Focused For Business and an AllBright Academy Ambassador, to ask her advice for finding, approaching and pitching to investors. Here Hatty shares her top tips.
Investors can be almost anyone. When I raised investment for my business my investors included customers, suppliers, professional investors and even people who knew me through a shared hobby. The point is, almost anyone can be an investor, so you need to be ready to pitch at any point.
Approach people you know first – people who see firsthand the hard work you are putting into your business. Why not approach friends, family, employers, suppliers to the business and even your customers. They can help you get an investment round started. It’s a lot easier to attract new investors when you already have your first few on board!
Professional investors – sometimes called Business Angels – tend to be busy people; it can be difficult to find these people and even harder to get their attention. You will need to have a short pitch (sometimes called an “elevator pitch”) that you can use – in either written or spoken form – to quickly give investors an introduction to your business, giving them enough information to pique their interest.
It is often easier to get a meeting with a business angel if you have a mutual connection to introduce you. If you have someone in mind that you’d like to approach, use your network (and LinkedIn) to try and find someone that can make that introduction. If you’re not sure who you want to approach, another way of getting started is to reach out to your network explaining what you are doing and asking for any suggestions they have as to potential investors.
A one-page executive summary of the investment opportunity (not of your business plan) is a key tool in your investor toolkit. Written well, this should give investors the information they need to make a decision as to whether this is an opportunity for them. Whatever you do, don’t send your pitch deck. A pitch deck should be presented and isn’t a standalone introduction to your business, save that for when you actually meet the investor.
All investors are individuals – they have their own particular interests, focus and areas of activity. Professional investors (such as business angels, private offices and equity funds) will often not agree to meet you – or perhaps even to talk to you – until they have seen something of the opportunity first.
Hatty Fawcett
Don’t expect professional investors to back you after just one conversation. They will need to get to know you and your business. This is best done face-to-face so your initial aim should be to get a meeting or a skype session in the diary.
Professional investors are busy people. Don’t assume they will get back to you. You need to take the initiative and keep the conversation alive by following up with them. After every conversation, meeting or pitch, schedule time to follow-up with the people you have spoken to and get their feedback on your investment opportunity. Ask if they have any questions or concerns and – of course – whether they are interested in investing.
Professional investors back businesses that are going places, so you need to
demonstrate that your business is evolving and growing every day. When following up with a business angel be ready with a juicy piece of new information that demonstrates your business is continuing to grow. This could be news that you have secured a new contract, delivered a key partnership, or the results of a new marketing campaign.
Not everyone you talk to will back your business. Get used to hearing the word “no” and moving on. It’s better to know that someone isn’t interested in your opportunity than to waste time talking to them when they have no intention of investing. Move on!
Use every interaction as a chance to learn something. Ask everyone you speak to for feedback – even if they are not interested in investing. Their feedback can improve your understanding of how others perceive your business and can help you adapt your positioning, if necessary. Ask for help from the people you speak to too – who do they know who would be interested in this opportunity? Will they introduce you?
Raising investment is hard work. It can feel relentless and if you have a run of “nos” it can bruise your confidence. Do what it takes to stay positive and keep your energy up – take an afternoon off and do something you love to boost your morale. Then get back to it, refreshed, revitalised and believing good things come to those who persevere!
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If you would like further help in preparing for investment, Hatty Fawcett runs a series of online masterclasses designed to give you the tools and you need to raise investment from crowdfunding or business angels. The masterclasses are focused, practical and confidence building:
• How to write an executive summary that attracts investors
• How to find and win investors
• How to create a business valuation that gets your start-up funded
In many ways, raising investment is a confidence game. Not only will investors want to get to know the founding team and the business plan so that they have confidence in your abilities, but investors will look for external validation too. They may hold back on committing to investing until they see that someone else believes in the idea sufficiently to invest in it. Once you have your first investor – or your cornerstone investment – it becomes easier to raise the remainder of the investment. But how do you find your first investor? It can feel like a catch 22 situation! Hatty Fawcett of Focused For Business asked four founders who have recently raised – or are in the process of raising – investment how they went about it.
It can be a daunting task, wondering where you will find investors but these founders were full of practical suggestions.
Kevin Jackson, founder of Blueprints an investment platform for economic development projects, put it frankly
“All the years of experience and contacts have to be used. You have to go back to everyone. Everyone you’ve ever met – if they aren’t investors they will know someone who is, get that introduction too.”
Shon Alam, founder of Bidweg which offers a new way to exchange foreign currency, also left no stone unturned in his search for investment
“I tried all the standard stuff you would expect banks, business startup loans, family, private equity and crowdfunding.”
Marco Scotti, founder of Figaroo which allows members to book and share VIP tables in the best nightclubs worldwide, talked more specifically about the channels he used to find investors
“I used LinkedIn, I approached personal connections and asked for introductions, I went on financial TV shows, got into the financial newspapers and spoke at lots of events.”
All the founders agreed that LinkedIn was key, as were personal introductions. Ian Dibb, founder of Once I’ve Gone which ensures family members and guardians have access to vital documents, insurance policies and files once their loved ones have passed, put it like this
“A warm introduction really does make things easier, and will normally get you a phone call. It’s then up to you to get a meeting with them.”
Personal connections are useful not just in finding investors but in actually opening the conversation with them too. All the founders I interviewed had found key investors as a result of an introduction – Shon and Ian both found Chairman that way too.
Kevin stresses the importance of the phone in making first contact with investors, and he advises against relying on email.
“If you are passionate about your product, pick up the phone and do a good pitch. You will get there. It’s all about people connecting with people!”
Once you’ve made initial contact you will need to supply supporting documentation. Marco recommends
“Be investment ready! That means having a performing deck, a clear “ask” and valuation and being ready to explain how you will use the funds you raise to achieve clear goals.”
Shon agrees and suggests you also need a good dose of resilience
“You’ll need all the usual stuff – business plan, video, meeting after meeting. Tugging your forelock and walking around with a permanent grin on your face, trying to sound intelligent and trying to get investors to understand the concept, what makes you different, etc. etc. etc. Investors balk at anything and everything!”
But whilst the process of talking to investor after investor can try the patience of a saint, Shon urges keeping the faith – you never know when you will have that magical conversation that changes everything. For Shon it was recruiting his chairman
“Our Chair has been great at helping to raise funds. I meet him in Costa Coffee and within 30 secs he said “Yep got it.” – and we haven’t looked back.”
There is no doubt that the constant conversations with investors can feel like hardwork. You will need self-belief, persistence and energy.
I asked Marco what he found the hardest about the process and how he overcame this. His answer was simple and telling
“To overcome the amount of no. You just have to keep doing that”
Shon talks of having to overcome his shyness and to put aside being in awe – or afraid – of the people he was speaking to
“You can get intimidated by these industry leaders, but the goo goo eyes went after the second round of meets and you just accept it as a normal part of the day and business. Don’t be frightened, or they will eat you up! Remember they are only people.”
Ian talks about the importance of personalising things where ever possible
“Any decent investors will receive 100’s of approaches each week from the next ‘Big Thing’, so it’s hard to get their attention. What we have found is that making the connection request on Linkedin really personal to the investor, will normally get the investor to connect. Focus on getting them interested enough to have a phone call or meeting.”
What Kevin found hardest was understanding exactly what investors were looking for. He started by stressing how quickly the business could scale but it turned out investors were more interested in what the business had already achieved. Getting the story right and stressing the facts of what had been achieved to date was the key to overcoming investors’ barriers.
Each of the founders I interviewed had an interesting – and sometimes surprising – piece of advice to offer for winning investors.
Kevin offered a practical suggestion which led to a surprising outcome. He instigated a weekly investor telephone get-together every Friday at 5pm. On one session he asked each investor to pick up the phone and speak to one contact explaining why they had backed the business and why they thought it would interest their contact. That exercise resulted in an investment of £150K that afternoon. As Kevin put it
“The right pitch to the right person will release the money.”
Marco agreed
“When you clearly present your company, with no ego, just as an excellent investment vehicle, investors will come to you and not the opposite.”
Shon and Ian both stressed that it isn’t just the money that is important. As Shon put it
“It’s definitely as much about the chemistry as about the money. If you can’t get on with your investor at this crucial startup phase, then you are in trouble.”
Ian agreed with Shon
“We have walked away from a couple of investors as we felt that they were not the right fit for the company. At the time it was hard, but we fully believe that it’s the right thing for the company in the long run.”
Finding your cornerstone investment – or your lead investor – takes hard work and persistence but making sure you are “investor ready”, reaching out to all your contacts and making personal requests are three key steps that deliver results. Good luck!
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If you want help in finding investors, building a relationship with them and closing an investment deal then take a look at the no nonsense online masterclass “How to find and win investors”. It provides
inspiration and practical step-by-step advice on where to find investors, how to get their attention and offers a proven process for building relationships with investors that deliver investment commitments. Read more about the masterclass
Anyone can come up with a “brilliant business idea” but it is quite another thing to put your money where your mouth is, take the plunge, give up your job and commit to making your idea a reality. For many founders of startups, taking the decision to leave your job – and a predictable salary – to commit to building your startup full-time can be terrifying. But it doesn’t have to be. There are steps you can take to prove you have a viable startup which reduces the risk, builds your confidence and makes it easier to attract funding.
David Toscano of Cin Cin Italian Bar & Kitchen did just that and Hatty Fawcett of Focused For Business asked him to share the steps he took to build his successful restaurant business – and what gave him the confidence to give up his profession as a lawyer to follow his passion for Italian food.
Hatty: How long had you been thinking about your business idea before you decided to take the first steps in getting your business off the ground?
David: About 10 years. I qualified as a lawyer back in 2001 but was bored of that career about two years in so I started to look for a way out. I spent a lot of time thinking I was not capable of doing anything else.
“I had always had a passion for food and when a friend left law to go into wine, it gave me that little bit of confidence that maybe I could have a second career in something completely different.”
Hatty: Who or what pushed you to take action in creating your business?
David:
“I just did not want to spend the next 20+ years of my life in a job I did not enjoy or care about. I needed to be putting my time and effort into something I had a real passion for”
Having grown up in an Italian family, food was always central to my childhood and something I had always felt comfortable with.
Hatty: What initial steps did you take and why did you choose these steps?
David: The very initial steps were saying yes to catering parties and dinners for family and friends in 2010, even though I had no chef training or experience.
“I did a lot of research about opening a restaurant and quickly discovered it was an enterprise with a high set up cost and high risk of early failure. Given I had never even worked in a restaurant before, this made the jump to restauranteur feel even more precarious.”
So in 2012, I bought a vintage Fiat van and converted it into a street food van which in 2013 I launched as Cin Cin, an Italian street food and event catering business. I started trading at festivals and fairs, as well as taking private bookings to cater weddings, parties, celebrations; all while still working as a lawyer in London.
“Testing my offering in this way was very low risk because I was not reliant on income from the new business to pay my bills and I had set up the business with my own funds.”
I was also aware that I was moving into a completely new sector that I had no experience in so I had no idea whether I would even enjoy working in food & drink. Thankfully, I immediately loved it!
“I spent 2013 testing the business in various street food and private catering events, doing all the cooking myself and calling on family and friends as staff.”
I was enjoying event catering and starting to pick up bigger events which meant I was turning some good profit but by 2014, I was sure that I wanted to open a restaurant so started to look for a chef to work with to put on supper club/pop up restaurant events. This was because I wanted to take the food beyond the limitations of the van and make the Cin Cin offering more refined. That summer I met Jamie Halsall, who is now my head chef in the business, and we started putting on supper clubs in Brighton, London and Kent. This step helped bridge the gap between the van business I had started and the restaurant business I wanted it to become.
Hatty: What did you learn by taking these initial steps?
David: These initial steps allowed me to test the development of the offering in low risk scenarios – I was still working as a lawyer so was not reliant on the income from the fledgling business to fund my lifestyle.
“I still approached each event with the aim of making a profit, but at that stage it was more about getting feedback on what customers wanted and expected from a new restaurant and more importantly, their feedback showed me that there was a gap in the market that we could fill.”
Hatty: Was there a specific event or turning point that gave you the confidence to commit working full-time in your business?
David: In Spring 2015, the business had grown to the point where I no longer had enough leave days from my job as a lawyer to cater all of the events I was being offered.
“I was turning down work and was extremely tired given I was using all my leave for events. So I made a plan to quit law at the end of 2015 and chase my restaurant dream full time. I have never looked back.”
Hatty: What influenced your decision to raise investment?
David: I opened my first restaurant in November 2016 with my own funds. It was a small 20 seat restaurant, all housed in one room which meant the set up costs were relatively low. By Spring 2017, we were constantly full so I began looking for a second larger restaurant site.
“I needed the investment because I could not grow the business without it. While there was cash in the business given the success of the first restaurant, I did not have enough to build and open the second larger site so I raised finance through a mix of bank finance and asset finance on the new kit we needed to open the new restaurant.”
Hatty: Did the steps you had taken to prove your business model make it easier to raise funding for your business?
David: Absolutely. As above, I used the Enterprise Finance Guarantee [EFG] scheme to access bank finance because the business did not have fixed assets to borrow against. In order to access that finance, I had to submit a business plan with costed financials to show that this step to growth was sustainable.
“All of the testing of my business model and offering went into that business plan and was a key part of the data that convinced the bank and asset finance agency to lend me the money I needed.”
Hatty: Do you have any advice or tips for entrepreneurs thinking about starting their own business?
David: Lean testing – there are a lot of ways to try out what you think you’d like your business to be without risking your personal finances with a loan or spending a lot of your savings. But just as important is that it’s also the best and least risky way to get feedback from potential customers about whether your business model and offering is actually what people want. Be prepared to listen and adjust your offering to suit the market.
Passion – I worked hard to become a lawyer but never had a passion for it. Working on something you do not care about is a recipe for mediocrity or even worse, failure.
“So if you are going to start a business, make sure there is something within it you are passionate about. That passion will drive you through fatigue, disappointment, and little failures while also making success all the more sweet as you’ll have created something you can be proud of. And isn’t that why we become entrepreneurs in the first place?!”
Do it now – you can come up with a million reasons why you should not to take a chance on starting your own business or pushing it forward. I spent the best part of 10 years telling myself I could not do it. But rather than saying ‘I wish I’d done it earlier’, I have always just tried to grow the business day by day and make decisions for growth as promptly as I can.
“There is no point waiting around wondering whether you could be great at something. Do it now.”
Read more interviews with Founders
**** Book a free Funding Clinic with Hatty Fawcett and gain practical, tailored advice on the funding options open to your business. BOOK A FUNDING CLINIC****
So the kids have broken up from school and the sunshine has put everyone in holiday mode. Perhaps it even feels like you are the only person left at your desk working!
Let’s face it, founders and entrepreneurs are hard workers. Running businesses isn’t easy and we get used to thriving on problem solving and stress. This probably also means we are a group of individuals that most need a holiday. But, perhaps like me, you are thinking “can I really spare the time?”
I asked three founders whether they thought holidays were worth it and what they do to “switch off” when on holiday. All three had a different approach to holidays and offered interesting tips and advice on how to relax. I hope these will give you the break you deserve.
Laura Meehan, Founder of Squijit recognises how hard it can be to take time off, but she also knows it is important. Speaking about holidays, she said
“They give definition to time. When you work for yourself time ‘merges’ into one – by having a ‘holiday’ it forces you to ‘allocate time’ to not working! Or at least trying to not work!”
Perhaps unsurprisingly, Ildiko Scurr Founder of Life Retuning thinks holidays are vital.
“It is important to give our systems a chance to de-stress from the busy, ‘doing’ lives that many of us lead. Getting away from the overload of information and outside stimuli gives your mind a chance to clear down, which has a direct impact on re-balancing the stress hormones which are likely to be flooding your body in your day-to-day life.”
Ildiko also believes holidays offer you a fresh perspective
“Being in a different environment can give you a chance to reassess what is really important. Getting away from it all, allows you to regenerate, review and relax”
Robert Smallwood, founder of of Job N Part recognises this too but goes further. He believes holidays provide important benefits for your business – as well as for you. Holidays offer
“The chance to recover and think. Often the best ideas come during time off. When you are in the midst of everything, typically you get too close to the nitty gritty – getting a bit of distance creates perspective and opens your eyes to new ideas and provides insight into what previously appeared to be insurmountable problems.”
“Switching off”
If you are anything like me, in the weeks running up to going on holiday you work twice as hard to clear your “To do” list so you can leave things with a clear conscience. The trouble is this can mean you start the holiday exhausted and find it hard to relax and “switch off”. By the time you have finally relaxed it’s time to go back to work!
Laura recognised this behaviour and admitted she found it very hard to “switch off” but was trying to
“Be more ‘mindful’ of the here and now – especially with regards to time with the kids. They’re not kids for very long!”
Robert also finds it hard to do nothing.
“The idea of sitting on a beach is an anathema to my slightly hyper active nature!”
Instead, he looks for displacement activities such as
“site seeing, taking part in some reckless sport or simply spending time with family and doing what they want to do…anything so long as the activity is all consuming.”
Ildiko is strict with herself
“I leave my Mac behind and only look at my phone at designated times that I set for myself. I also make sure that I do not open any emails, files or projects on my phone while I am on holiday and that I focus fully on the people I am with. A great way to make this easier, is to learn how to listen intentionally. That means intending to make any conversation you have with someone, or anything you are reading or watching, the sole focus of your attention. This in itself is a holiday for your mind, which helps your body to relax and switch off too.”
How to make time for holidays
If you are still wondering whether you can spare the time for a holiday this summer, take heed!
If, like Laura, you find it difficult to take a proper break then, at least, plan is some downtime
“If you really need to, you can plan what work is do-able on holiday. Be careful to select work that won’t affect your enjoyment of the holiday too much.”
Ildiko also recognises how important it is to plan a holiday into your schedule, she recommends
“Book out ‘me time’ for a holiday in your diary and recognise that it is vitally important for your personal maintenance. It is not a luxury. It is a necessity for your well-being in the long term. Most of us consider it important to book our car in for a service, so isn’t it even more important for the driver to be in top shape too?”
Robert is more adamant still
“Nothing is really more important than your health – relaxation and stress relief is key to maintaining your health. A holiday can be a day, a weekend or longer. A successful business is not much use if you are dead or too sick to enjoy it.”
If you are still believe a holiday is not worth having because you won’t be able to switch off, then you could always find out more about Ildiko’s Re-Minding process, and book a “Beyond MindFULLness” masterclass which teaches how to put your thoughts into silence so that you really can “switch off”.
Matt Dyson Co-founder and CEO of Rockit knows what successful crowdfunding takes. He and his team beat their crowdfunding target and overfunded to raise £253,000 in May 2018. It’s been quite a ride. Rockit only launched in October 2017 and to beat their investment target within eight months of trading is testament to the efforts of the team.
Hatty Fawcett of Crowdfunding Accelerator asked Matt what he thinks made the difference to Rockit’s successful crowdfunding campaign.
Hatty: What attracted you to crowdfunding for your investment raise?
“Crowdfunding is a fantastic opportunity to increase exposure at the same time as raising investment.”
Matt: Ever since we launched Rockit, the portable baby rocker, in October 2017, its been creating a real buzz. As we started thinking about raising investment, we had already built up quite a following amongst parents both in the UK and abroad. Crowdfunding seemed a perfect match as we could access a large pool of potential investors whilst simultaneously building a group of Rockit brand advocates. It was a fantastic opportunity to increase our exposure at the same time as raising the investment.
Hatty: Many early-stage businesses with a strong product start with reward-based crowdfunding, why did you choose to do equity crowdfunding?
“Our investors will benefit from the success of the business as a whole, not just a single product.”
Matt: We had already launched Rockit and it was gaining traction in the market. The team were working on a range of follow-up products to solve various child sleep issues. We chose to focus on equity crowdfunding to raise capital to bring these new products to market as quickly as possible, but also to increase marketing spend both in the UK and overseas. Our investors will benefit from the success of the business as a whole, not just a single product.
Hatty: What do you attribute your successful crowdfunding campaign to?
Matt: The appeal of our product has to be a factor. Rockit itself certainly caught the eye of investors as there is nothing quite like it on the market.
Thorough preparation for the campaign was another key attribute.
“We spent several months planning and preparing the video, pitch deck and financial forecasts. Several serial investors commented on the attention to detail and the fact that we supported our assumptions with detailed explanations.”
Hatty: A lot of crowdfunding platforms won’t accept you on to their platform until you have secured some of your investment target. Did you have a “lead investor”?
“We managed to reach 40% of our funding target prior to going live…that pump-priming meant the campaign got off to a flying start.”
Matt: I agree that securing some of your investment prior to putting your campaign live is important for successful crowdfunding. We managed to reach 40% of our funding target prior to going live on Crowdcube so we had primed the pump but we didn’t have a single lead investor. Instead we were backed by a number of smaller investors who had followed our progress over the previous months. This, coupled with the fact that we still had some SEIS allowance for the early investors, meant that the campaign got off to a flying start.
Hatty: What promotional activities did you undertake to bring “the crowd” – those you didn’t know prior to crowdfunding – to your pitch?
“Our PR drive was probably the most effective way of engaging with the crowd as it snowballed organically and drove lots of potential investors to our campaign page.”
Matt: We promoted the raise on all our social media platforms, posting regular updates about the campaign but also about key successes within the business generally.
Whilst we were live we signed several distribution deals including one in the US. We also won several design and consumer awards. These successes were very timely and we certainly found it encouraged investment during the campaign.
We were also lucky to be featured on ITV’s ‘This Morning’ and that generated additional press interest. This PR drive was probably the most effective way of engaging with the crowd as it snowballed organically and drove lots of potential investors to our campaign page.
Hatty: What advice, tips or successful tactics would you offer to anyone preparing for crowdfunding?
“Start planning 3 or 4 months prior to the launch of a campaign. That may seem like a long lead time but preparation is key!”
Matt: This gives you time to identify all the potential investors in your various networks and start conversations with them.
Another tip is to get feedback on all your campaign materials – video, deck and pitch page before finalising them. This is something we did repeatedly with both the Crowdcube team but also via feedback from experienced investors within our personal networks.
Hatty: Many founders who successfully crowdfund tell me it is very time-consuming. What do you recommend for maintaining your motivation and commitment when crowdfunding?
Matt: It’s certainly challenging running a crowdfunding campaign whilst also maintaining the day to day running of the business! Our days were long and we often found ourselves emailing responses to potential investors late into the night.
“There were times when the investments were slower to arrive than we would have liked and it was really useful having a plan to promote the campaign using different channels to increase engagement on these quieter days.”
Hatty: Have there been any surprising outcomes from your successful crowdfunding?
Matt: Yes! Crowdfunding has certainly raised the profile of our business, not just in the UK but overseas too. We are following up some leads from potential international distributors who became aware of Rockit through the Crowdcube campaign. We have also had some investors offer expertise and advice on a voluntary basis as we move forward. All in all it’s been a very rewarding experience.
Read more interviews with Founders
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Jason Kirk co-founder of Kirk and Kirk, an upmarket eye-wear brand, is a very credible founder and business owner. He and his business partner Karen built and sold a successful business prior to starting Kirk and Kirk, they both have over 20 years’ experience in their industry, their latest business has made good progress and they have raised investment before (for their first business). You might think that they would find it a breeze to raise investment. And yet, when they were looking to raise investment for Kirk and Kirk they sought external support and advice. Hatty Fawcett of Focused For Business caught up with Jason to find out why.
Hatty: You decided to raise investment from business angels rather than any other source, why was that?
Jason: We didn’t need a huge amount of money, about £150,000. We were eligible for SEIS (Seed Entreprise Investment Scheme) which I knew would make us appealing to angel investors so it felt like a logical place to start. I was also interested to see what sort of angel we might attract and whether they might bring additional value to the business in the form of contacts or skills, as well as their money.
I’d also decided against going to the banks because they tend to be slow and expensive. The amount of work involved measured against the amount of support you end up with from the banks is, at best, frustrating.
Hatty: You had raised investment before, for your previous business, so people might assume you knew what was required. Why did you decide to get external support in preparing for investment?
“I really want to ensure I was speaking investors’ language. I know how time consuming raising investment can be. I wanted to get it right first time and avoid going backwards and forwards with investors and spending too much time on it.”
Jason: Yes. I’d raised investment before but this was a different business. Enlisting the help of someone who knows how to tailor a document to the needs of a specific audience is very time efficient and should lead to better results. I really want to ensure I was speaking investors’ language. I know how time consuming raising investment can be. I wanted to get it right first time and avoid going backwards and forwards with investors and spending too much time on it. Raising investment can be a big distraction from the day-to-day running of your business if you’re not careful!
Hatty: You’re right. Raising investment is a full-time job – on top of the full-time job of running your business! Raising investment gets an awful lot easier when you have a lead investor, someone willing to back your business and say why they are doing so. How did you go about finding a lead investor?
Jason: I didn’t have a huge network of investors so I admit it was daunting knowing where to start! But having worked on what I need to say to investors with you, it gave me confidence to go out and start talking to people. I remember you encouraged me to talk to everyone! Telling them about the business, what we had achieved and what we wanted to do next. I spoke to so many people I began to get board of the sound of my own voice!
“It’s definitely easier to attract other investors once you have a lead investor.”
But it paid off, one of the people I spoke to – looking for their feedback, I wasn’t actually asking for investment – was an active angel investor and he liked what we were doing. He agreed to be our lead investor. It’s definitely easier to attract other investors once you have a lead investor.
Hatty: That’s very true. A lead investor really gets things moving. I know it worked for you and, with the support of your lead investor, you were able to complete the investment round. Thinking back on the process of raising investment, what advice would you offer to anyone preparing for investment today?
Jason: I’d use an experienced pro to help you prepare the documents and figures you need because it saves a great deal of time and makes your investment look more attractive to potential investors.
Hatty: Have there been any surprising outcomes from raising investment?
Jason: The investment has allowed us to make significant progress in a relatively short time frame. In fact, we’ve achieved the milestones we set and are ready for our next round of investment!
Jason worked with Hatty Fawcett of Focused For Business to prepare for investment, with the specific objective of developing a strong summary of the investment opportunity (in the form of a one page executive summary) and a credible business valuation.
If you would like help preparing for investment, book a free funding clinic with Hatty Fawcett or attend a live and interactive, online masterclass that gives you the tools to prepare yourself for investment.
Kellie Forbes and Gill Hayward, Co-Founders of YUU World, know what it takes to raise investment. They survived “Dragon’s Den” (TV programme) receiving offers from all five dragons and going on to raise investment from Peter Jones and Deborah Meadon. Then, in 2016, they raised £210,000 from a number of business angels. In 2017, with the business doing well and a new product to launch, Kellie and Gill turned to crowdfunding to raise investment to launch the new product but, more importantly, to test demand for their latest creation, YUUGo a GPS tracker backpack which provides parents with everything they need to keep their kids both entertained & safe on-the-go.
Their crowdfunding campaign didn’t raise what they hoped but they still feel the campaign was a success and that crowdfunding was very worthwhile. Hatty Fawcett of Crowdfunding Accelerator caught up with Kellie to find out why and to discover what they’d learnt in the process.
Hatty: What attracted you to crowdfunding for this investment raise?
Kellie: We were attracted to crowdfunding to launch our new product not just because of the financial support, but because we thought it would be a great way to test the desirability of our newest product. We also wanted to gain some valuable insight on how to improve our product along the way.
Hatty: What influenced your decision to do reward-based crowdfunding (rather than equity)?
Kellie: YUUGo is a tech product (it uses GPS/Wi-fi tracker to allow children to track their journeys whilst giving parents the ability to see where their kids are). We noticed that “wearable tech” performs particular well on reward-based crowdfunding platforms. It seemed a good way to reach out to new customers beyond those who already love our core product. Nothing is certain in crowdfunding – and we had some concerns – but we wanted to give it a try.
Hatty: How did you decide at what level to set your crowdfunding target?
“I would urge anyone considering crowdfunding to think very carefully about their crowdfunding target…setting this at the right level is more complex than you might think.”
Kellie: I would urge anyone considering crowdfunding to think very carefully about their crowdfunding target (the amount of money you want to raise).
We reviewed a lot of crowdfunding projects before launching our own and, in many cases we saw the percentage reached outshining the actual target. When this happens “the crowd” tends to be encouraged by the initial response and join in backing the project causing an over-funding situation. This is very exciting when it happens but it can also be misleading. You have to deliver your promised rewards the minute you hit your (minimum) target, even if you are planning to go on and over fund. We considered setting a lower target (so that we were seen to achieve our target quickly) but we were concerned that if we set our minimum target too low we would not raise sufficient funds to meet our minimum order quantity with our factory, leaving us needing to deliver rewards without the minimum order quantity economies of scale. That would have cost us money!
I guess what I’m saying is that setting your crowdfunding target is more complex than you might think. You’ve got to think about what you need, the costs of delivering your promised rewards and recognise that there is human psychology at play too.
“It is dependent on you to get the first 40-50% (of your target) pledges in – and you need these pledged in the first few days of your campaign. I cannot stress this enough”
Hatty: Had you lined up some initial investors to support your crowdfunding pitch when it went live?
Kellie: I cannot stress enough how important it is to do some in-depth prep and ground work on lining up initial investor pledges. I’d recommend lining up initial pledges that account for 40%-50% of your target – and you need these pledged in the first few days of your campaign to get the traction your campaign will need to reach “the crowd” (people you don’t know).
We’ve found there is a difference between American and UK consumer behaviour on crowdfunding sites. We found that our campaign received good numbers of visitors but the conversion from our Facebook advertising and our database was not what we had anticipated. People can be scared off, or simply be confused about what they are there for, if they have not made a crowdfunding pledge before. I’d recommend providing a clear, short explanation on your pitch page explaining how crowdfunding works. UK consumers, in particular, seem less familiar with crowdfunding compared to, say, the USA.
“I wish we had worked with somebody independent to our campaign and company so that we had another perspective and view.”
Lastly, and I feel this sincerely, I wish we had worked with somebody independent to our campaign and company so that we had another perspective and view on how to approach our campaign. In my experience, you cannot cover enough angles when preparing for your campaign!
Hatty: Have there been any surprising outcomes from your crowdfunding campaign?
Kellie: Yes! it was disappointing that we didn’t hit our target but we have learnt so much and had such useful feedback we feel the campaign has delivered – just not in the way we expected.
We now know that we were not focused enough on finding that first 30% (of our target). It was dependent on us to get those pledges in and, whilst we believed we had these teed up, it took more than we anticipated to bring them home. The first two days of the campaign were exhausting, asking friends and family to pledge. If we had understood the importance of this better, we’d have prepared more pledges before going live.
That said, we’ve had amazing feedback regarding the new product. That’s been insightful. We know we have a desired product, but we now realise there is another way to deliver this – as an add-on option rather than a bespoke product. We had considered this before but had opted to make a stand alone product. It was feedback by via the crowdfunding campaign that has caused us to re-think this decision. We have a better product as a result.
Another unexpected outcome has been the amount of exposure our business has received and the impact this has on sales. We’ve had some lovely PR which has been brilliant (including a spot on BBC Business Breakfast). Better still, we’ve seen this exposure directly impact on sales. Our sales are up almost 20% which is thanks to the crowdfunding campaign exposure. Experience tells us that this will also bode well for the all-important Christmas sales period too.
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Schumacher College in Dartington, South Devon seeks to inspire, challenge and question people as co-inhabitants of the world. They are an international centre for nature-based education, personal transformation and collective action. They offer a range of residential courses on ecological themes and transformative courses for sustainable living.
A number of co-creators from the college developed the Deep Time Walk App which provides a walking audio history of the living Earth, giving people a detailed and dramatised experience of the planet’s 4.6 billion year history. During this educational walk, people walk a distance of 4.6 kilometres whilst listening to the Earth’s story (via the app) and are encouraged to connect their own short-lived experience of time on Earth with the vast expanse of geological time.
The college needed funds to complete development of the app and with revenue generated from the sale of the app hopes to raise sufficient investment to fund a number of bursaries for the college. On World Earth Day in April 2016 they set out to raise £21,000 on reward-based crowdfunding site, Crowdfunder.co.uk.
Hatty Fawcett, experienced crowdfunder and Founder of Focused For Business and Crowdfunding Accelerator, asked Robert Woodford to share what he learnt from this crowdfunding campaign and to offer advice to others thinking about doing crowdfunding.
“Schumacher College has a strong alumni who share the Deep Time Walk ethos and vision for the world…it was a project born out of the work of the college and it was natural for us to reach out to this pre-existing community for support”
Hatty: What attracted you to crowdfunding?
Robert: Schumacher College has a strong alumni who share our ethos and vision for the world. Many of our alumni had undertaken the physical Deep Time Walk at the College (from which this project arose) and so had a strong affinity for the project. It was natural for us to want to talk to this pre-existing “crowd” (via a mailing list of 17,000 people) and share our vision. Crowdfunding enabled us to turn a shared vision into a tangible financial commitment of support for our project.
“It proved crucial to have advice upfront …we would have missed out if we hadn’t had all the elements of the campaign lined up well in advance.”
Hatty: How did you approach your crowdfunding campaign?
Robert: We did a wide review of best practices associated with crowdfunding and spoke to a number of people that had already managed a campaign, including yourself Hatty – your advice helped us think about the common pitfalls involved in the process of crowdfunding. The team at Crowdfunder were also a great help in providing support and advice both before and during the campaign. It proved crucial to have this information and advice upfront because, once live, the campaign moved very fast and we would have missed out if we hadn’t had all the elements of the campaign lined up well in advance.
I have to say, it was tough work and enduring attention to detail was needed in the weeks up to launch and then constantly throughout the campaign. Gruelling but rewarding!
“Crowdfunding takes longer than you might think. It’s gruelling but rewarding!”
Hatty: How long did it take to prepare your crowdfunding campaign?
Robert: We starting thinking about our campaign six months before we went live, and then planning started in earnest three months before. Crowdfunding takes longer than you might think. We’d expected to launch about a month before we actually did. It was the right decision to delay the launch as it meant we had everything lined up and, importantly, we secured upfront financial commitments which ensured the campaign was a success.
“The biggest challenge was getting the timing of these pre-pledges lined up with the actual day our crowdfunding campaign went live.”
Hatty: How much of your campaign target had you had promised by the time you put your crowdfunding campaign live?
Robert: We had about 20% ready to be pledged before we went live. The biggest challenge was getting the timing of these pre-pledges lined up with the actual day our crowdfunding campaign went live, and then timing the push out to the wider support base after this.
“One thing that worked really well for us was having incentives that were, effectively, limited edition.”
Hatty: What advice, tips or successful tactics would you offer to anyone preparing for crowdfunding?
Robert: Planning is essential – I can’t stress that enough– as is keeping the momentum going throughout the campaign.
One thing that worked really well for us was having incentives that were, effectively, limited edition. The rewards were also of high value to our target base for support. We made exclusive audio recordings with Satish Kumar, Martin Shaw and Stephan Harding, and provided an set of lectures which totalled over 4 hours. We also have put in the effort to produce an exclusive book and audio cd, which was attractive to potential supporters. And, we would only release a certain number for each reward category and when these were taken, that was it, they were gone. This encouraged people that visited our crowdfunding campaign to pledge, there an then, whilst they were on the site. If they’d waited the reward might have run out.
We used several tactics here:
1) We kept the number of each reward low so that people were encouraged to pledge before a reward ran out.
2) We offered an incentive that the first 50 people that pledged would receive access to an early version of the product, which really helped bring in the early pledges.
3) Half way through the campaign, we launched a match-fund campaign, which brought in a substantial mid-boost to our crowdfunding campaign. It worked so well it enabled us to add stretch targets which provided further momentum to the project.
“We launched a match-fund campaign…and what started as a £1,000 commitment became an £8,000 investment.”
Hatty: How did the match-fund incentive work?
Robert: Essentially, I got three donors in place who each promised to contribute a relatively large sum if we raised matching funding through the crowdfunding site. It was difficult getting the first major donor but, once we had one on board, it was easier to encourage others. The first donor offered a commitment of £1,000 if we could match it through the crowdfunding site. I then got a commitment of a further £3,000 from another two donors. This created a theoretical match-fund pot of £4,000. All we had to do was raise the same amount of money through our “crowd” and that would trigger the match-fund investment. Our wonderful “crowd” came up with the goods on the same day we told them of the initiative! So, what started as a £1,000 commitment became an £8,000 investment. In fact, we actually went over the target amount before the match-fund was pledged and so we pushed on to reach towards our stretch target. Originally we’d hoped to raise £21,000 but we actually raised over £26,000.
Match-funding really incentivised our crowd and our match-funders were excited by it too. They felt they were doing something special which boosted support generally.
“We’re no longer a team of eight, but a community of 267 with a common passion and commitment to the project”
Hatty: Would you do crowdfunding again?
Robert: Yes, it’s an exhilarating if sometimes stressful ride, and it was wonderful to be part of a project that not only delivered the investment, but also has the potential to change people’s perspective on their place in the cosmos and how Earth formed over 4.6bn years.
Perhaps even more importantly, we’ve created a growing community around this project. And that’s more compelling than the app on its own. We’re no longer a team of eight, but a community of 267 with a common passion and commitment to the project and it’s potential to give anyone, anywhere on the planet a perspective of deep time and where they came from”. If we nurture this relationship there are lots of opportunities down the line to do other things. Now, that’s exciting!
To find out more about the Deep Time Walk, visit deeptimewalk.org or join them on their facebook page at www.facebook.com/deeptimewalk
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Crowdfunding Accelerator is an eight week online programme that makes it quicker and easier to be successful at crowdfunding. Find out more