The Art to Closing Crowdfunding Investors
Closing investors is never easy. In the past, it required facetime with each investor and a lot of chasing to eventually get the money wired into the bank. Crowdfunding has moved investing online, which introduces an entirely new efficient way to close investors.
Below are the 5 techniques you should incorporate into your strategy to successfully raise money through crowdfunding:
Build a Powerful Crowdfunding Campaign
Make Yourself Available Immediately
Pitch Game On
Crowdfunding Perks
Create a Sense of Urgency
Build a Powerful Crowdfunding Campaign
The beauty of crowdfunding is that investors now have access to all the information they need to invest instantly online. The first step to closing investors is creating a comprehensive crowdfunding campaign that tells a compelling story to attract investors to your deal.
It is important to distill down your value proposition in a clear and powerful way to grab the investors attention instantly. The most compelling way to do this is through a lead investor who has validated the terms of your fundraise, which provides immediate social proof for your deal. Investors can then follow-on at the same terms of that investor who has already done their diligence on the company.
You then need business traction to justify the terms of your fundraise and the right team to execute on the mission. Lastly, you will need to have the necessary deal documents in place like a term sheet and investor pitch deck to execute the crowdfunding campaign. Once you’ve nailed the value proposition and have all the key elements in place you are then ready to take your deal to the masses through crowdfunding.
Make Yourself Available Immediately
Give your investors VIP treatment since they are an integral part in achieving your crowdfunding and business goals. Don’t wait any longer than 24-48 hours to respond to investors once they show an interest in your deal.
Offer to do a phone call with that investor to signal that you value their interest and are willing to go the extra mile to close them. On that call, be prepared to answer any and all questions as it pertains to your business, especially your metrics. If you make yourself immediately and are able to nail all the investors questions, you’ll be in a great place to close any investor.
Pitch Game On
Pitching investors is a skill that takes time to master. It starts off with a well designed pitch deck that covers everything an investor would need to know before wiring the money. Check out this pitch deck template to get you started on the right track.
Once you have the pitch deck in place, it is important that you pitch to both the rational and emotional side of the investor. The rational side will come down to the metrics and if they add up to a winning business. The emotional side is critically important as investors invest in people and companies that solve real world problems. They will need to connect with you and believe in your idea and mission. Make sure to craft your story to touch on both the rational and emotional side of the investor to guarantee success.
Crowdfunding Perks
Perks can make a crowdfunding campaign unique and help convert investors into your deal if they are compelling and valuable. It’s important to think creatively and offer experiences that money can’t buy. The experiences should be connected directly to your business. For instance, if you are launching a wine venture, offer a private wine tasting dinner with the winemaker. If you are launching a software product that helps consumers learn how to play music, offer a private studio session with a well established music producer. Perks are a powerful way to help close investors into your deal, or have them level up to a higher investment level to get that perk experience.
Create a Sense of Urgency
Even if you have the best perks and pitch deck out there, you won’t close investors if you don’t provide a sense of urgency. If an investor believes that there is a very small window to get into a deal they will act swiftly to ensure they get into the deal. No one wants to miss out on the opportunity to invest in the next Snapchat or Facebook. Use this to your advantage when pitching investors and give hard deadlines to convey that there is limited space in your deal. If you’re able to create a sense of urgency, you will tip the scales in your favor.
Closing investors is an art, not a science. You will always be pivoting and reworking your pitch and gauging each investor individually but if you follow the steps outlined above, you will be on your way to closing every investor that comes your way.