The First 100 New Investors in Your Capital Raise
Why 100 New Investors?
Unlike private capital raises that require very few investors to drive success; equity crowdfunding raises are unique in that they require leverage from “the crowd.” Regulation CF and Regulation A+ raises will especially thrive the most when looking for investments from three key communities: 1) your community, 2) the platform’s community, 3) and those who are unfamiliar with both yourselves and the platform. Because companies within equity crowdfunding tend to be at earlier stages of growth, many of these investors often become future customers, or even loyal brand ambassadors – cheering companies on from the sidelines, hoping that they become future success stories.
As a registered funding portal, StartEngine is required to treat every Reg CF raise on our platform equally – we cannot highlight any raise over another. However, due to Rule 402 of Regulation Crowdfunding (the Conditional Safe Harbor Rule) – StartEngine is permitted to identify particular issuers or offerings based on objective criteria where the criteria are reasonably designed to highlight a “broad selection” of issuers offering securities.
As StartEngine seeks to expose our community to relevant offerings that each investor is likely to be interested in, we grant additional features to companies who have demonstrated their offerings are backed by a certain level of social validation. We’ve found that obtaining 100 new investors is a good metric to validate offerings, and consequently, have designed a standalone email feature to showcase campaigns who meet this objective criteria.
Being able to bring 100 Net-New Investors within the first 30 days of a campaign will grant issuers a standalone email to our wider community (versus other emails that might go out to a subset) – and is one of the earliest most impactful touchpoints that issuers can take advantage of on StartEngine.
Who Counts As a New Investor?
A Net-New Investor is defined as someone who has never made an investment on StartEngine’s platform. In order to qualify for the 100 new investor email, you need to receive 100 first time investments within the first 30 days of your launch.
For example, if Person A has invested in another offering on StartEngine prior to investing in your raise, they will not count towards your goal of 100 new investors; however, if Person B creates a brand new account and then invests in your offering as their very first investment – then you can expect to see Person B included in your Net-New Investor count once their investment clears.
How Can My Company Achieve 100 New Investors?
While we wish there was some sort of cut-and-dry cookie-cutter approach to this, there simply isn’t. It won’t be easy, and will almost certainly require time and effort; but there are, in general, best-practices that can be followed in order for your company to bring in 100 net-new investors from your community. The strategy can start even before the campaign launches, by way of Test The Waters (TTW) Messaging; with outreach going into high-gear once your raise is live.
Best Practices
1. Phone Calls
Talk to the people in your network who know you best, and have members of your executive team do the same. We often find a team of five people can reach 100 new investors in as little as 80 calls each. Personal outreach can be powerful.
The people who are in your rolodex and are closest to you might just be your biggest supporters. Those people might also know people – and when you get to talking over the phone rather than over an email – they might just say “Well hey, this is really interesting – I know someone who also might be interested.”
2. Emails Lists and Email Captures
Before you even launch, you can start garnering interest from prospective investors by implementing an email capture field on your website.* Email lists and leads and captures are beneficial because they will help you have an audience to go out to directly when you launch. You can also leverage these audiences with perks like loyalty bonuses – to further encourage them to invest earlier on. In addition, you can segment out emails between potential investors, friends and family, and more generalized interest parties (i.e. customers and other groups).
The more emails you can secure, the greater the opportunity for you to be bringing actual net-new individuals; which is the only way to count towards the 100 net-new investor standalone emails (past StartEngine investors do not count). If you are coming from another equity crowdfunding platform then you should definitely make use of any email lists that you have on hand since there will likely be a low amount of overlap in users.
3. Conferences and Networking Events
Networking Events and conferences are one of your biggest allies. Not only does it allow you to gather that list of contacts to call – it gets you face to face with prospective investors who can ask questions and get a better understanding of who your business is and why they should invest in you.
If you live in a major metropolitan area (think LA, Miami, Dallas, New York, Detroit, Atlanta, etc.) chances are you have a thriving set of opportunities to attend networking events. Even if they aren’t necessarily in your industry – you might meet someone there who finds your business interesting enough to invest. You can even attempt to host your own event and invite people in your network, asking them to invite people that they know. Think of it as a more personal webinar.
4. Content, Content, Content (i.e. TikTok, Instagram Reels, YouTube Shorts, and more)
Content is king – and according to Ad Age, the average attention span for consumers is roughly 8 seconds. It’s important to be able to reach people while they are scrolling, and capture their attention enough to make them stop and watch.
Graphics are key – especially if you want to stand out from the rest of the noise. Try and pay attention to digital trends as well – using the latest “audio clips” or trending/relevant hashtags Post regularly – even if it’s just you talking to the camera talking about what your company has been doing as of lately. If you have any products, use this as an avenue to show those products off.
You may recall a a YouTube channel from the early aughts, called “Will It Blend.” Here Blendtec would post videos of their pilot blender – actually blending regular household products like Iphones and Rake Handles. Similarly, Gary Vaynerchuck made his fortune in part from selling wine via daily vlogs on a channel called “Wine Library”
It’s all about eyeballs. And the more opportunities for people to see who you are and what you do, allows for more ways for people to say “I want in.”
5. Podcasts, YouTube Interviews, and More
There are 383.7 million podcast listeners globally as of November 2022. People turn to podcasts and YouTube for education, entertainment, and more.
Podcast and YouTube interviews are great ways to gain the ears of longtime listeners (potentially first time investors). While your raise pitch may not be the first thing that a user hears when they listen to the podcast, the individuals who stick around until the end of the show are much more likely to be the ones to invest.
Look for podcasts that are done local to where your business is headquartered. Cold emailing or Direct Messaging people on social media are easy ways to get in touch with hosts. They may not immediately answer, but if your message is appealing or interesting enough, they might just have you onboard. Try to keep things segmented based on your industry for a more hyper-focused approach since those listeners are more likely to be interested in your investment opportunity.
At the end of the day, this is exposure for your business, content for the host, and a win-win situation for everyone involved.
6. Leveraging Your Connections and Board Members
The people closest to you – your friends, family, and board members – all want to see your raise succeed; and asking them for help in spreading the word about your raise is all a part of leveraging the crowd.
This is the easiest form of networking, and these are the people who believe in your business the most. These individuals can invest, tell their friends and contacts to invest, and perhaps even get friends of friends to invest. This is also how larger investments can be secured – through people who believe in your business talking about it to others who believe in your mission. If any of these people happen to attend networking events or seminars and strike up a conversation about your raise, this also extends your reach to a larger group of people with ease.
For all you know, that extra word of mouth opportunity might get the attention of a large celebrity who decides to tell the whole world about your business!
7. Brick and Mortar Outreach
If you have a physical location, leverage that to your advantage! If it’s a tap-room or bar, try giving out coasters with scannable QR codes. If it’s a restaurant – hand out flyers to people or put a banner in front of your location (one past issuer Honey Bee Burger actually added a billboard in front of their location which helped their raise tremendously). If it’s a store (or if you sell consumer goods online) include items with your packaging that people can scan to learn more about the investment opportunity.
This should be low hanging fruit because it’s people who are already aware of your brand or business! If you have repeat purchasers or loyalists this is especially important!
Don’t think it can be done? Here are five fellow founders who reached 100 new investors:
1. Pencilish
This issuer leveraged their prior WeFunder investor list to the best of their abilities and managed to bring in 100 Net-New Investors in just two weeks. This issuer also hosts a podcast and sends out newsletters about their business, using those avenues as ways to promote the raise as well.
2. Popcom
This was not PopCom’s first raise on StartEngine – in fact they have had several raises on StartEngine – so securing Net-New Investors was no easy feat for them. Despite the odds, they were able to do it. They hustled and helped put on large scale events (including one attended by P-Diddy), as well as managed to get themselves onto a SiriusXM radio show, where they discussed the opportunity to invest on national airwaves. This is a great example of how repeat raisers on StartEngine can still find unique and creative ways to reach new people and still qualify for the standalone email.
3. DroneDek
This issuer leveraged a Test The Waters list of 500+ people – allowing them to secure a large list of individuals interested in investing before the raise went live. They also sent emails to past investors from their WeFunder raise.
4. The Coffee Class
This issuer leveraged their brick and mortar locations to help spread the word about their raise. They also used their list of contacts at their disposal to call and email people closest to them and allow those investors to learn about the investment opportunity.
5. Phizzle
Prior to launching, this issuer put together a list of loyalty bonus eligible investors and sent them consistent emails and phone calls. The loyalty bonus added an extra incentive for these people to invest. Their board was also very involved in terms of making sure that they saw the success of reaching the 100 new inventors goal.
It’s Going To Be Difficult, But Don’t Give Up!
Bringing in 100 Net-New Investors is a reach-goal for a reason – and unfortunately not everyone is going to achieve it. Setting yourself up for success in advance is key; and being confident that you’re up for the challenge is important.
Oftentimes issuers who do not meet the 100 new investor criteria waited too long to start securing investors, or gave up on the outreach, losing hope that they would receive the email feature. Other issuers may have tried to run paid ads to secure 100 Net-New people rather than doing the hard work by reaching out to those close to the company or executive team on a more personal scale, but the difficulty there comes with validating your business to people who oftentimes don’t know who you are or what your business is. Remember: an advertisement is much less effective than an IRL (In Real Life) interaction.
Most importantly, even if you don’t meet the criteria for the 100 Net-New Investor email – it’s not time to throw in the towel. As long as you follow the best practices outlined above, you still have a real opportunity to hit your raise goals. Whether or not the email goes out, doesn’t change the fact that you will have laid the groundwork for a successful raise. Remember: stay positive, and good luck with all of your outreach!
*Please note, that the TTW Money Legend is required on the page – indicating that this is not a solicitation but an indication of interest (see below). A screenshot of the form on your website will also then need to be included in your Form-C when you launch – something your Onboarding Manager can assist you with.
TTW Money Legend:
NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED, AND IF SENT IN RESPONSE, WILL NOT BE ACCEPTED. NO OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED UNTIL THE OFFERING STATEMENT IS FILED AND ONLY THROUGH AN INTERMEDIARY’S PLATFORM. AN INDICATION OF INTEREST INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND. “RESERVING” SECURITIES IS SIMPLY AN INDICATION OF INTEREST.
