When you’re crowdfunding a small business loan (with Honeycomb Credit, perhaps), it’s important that you’re putting in a bit of work to reach out to those who might want to invest in your business.
The good news is that this isn’t nearly as intimidating as walking into some board room with a slide deck asking for investments for your start-up. It’s more like letting in your family, friends, and customers on a really exciting opportunity for both you and them.
We talk a bit about the importance of promoting your crowdfunding campaign in another blog post, but here we want to talk a bit about what exactly you need to communicate to your potential investors to get them on board and invested in your crowdfunding campaign.
What should I be telling investors?
Because regulation crowdfunding is such a new concept to most people, it’s important that you’re very clear about what it is that you’re offering when you reach out to people for investments in your business. Here are some themes you should be sure to touch on when talking to people:
It’s an investment, not a donation
One of the biggest misconceptions that people have about crowdfunding is that it’s “digital panhandling.” People think about platforms like Kickstarter that are essentially donation tools, where people put money they don’t expect to get back.
With a loan crowdfunding campaign with Honeycomb, your investors are getting their money back, plus interest. This creates an ongoing relationship between your business and your investors, many of whom are probably your customers and will continue to be your customers long after your repayments are done.
It’s an investment, so be prepared for some risk
As with any investment, there’s always the risk that you might not get back all of your investment - or even any of it. The small business world is unpredictable, and many solid businesses have been unable to meet their requirements.
This is just something you need to say to be able to make your community aware of the risks and responsibilities of investing, because for many people this might be their very first time investing!
You can invest for as little as $100
This is especially useful to share with investors who might be interested in investing in your business, but are concerned about the cost. After all, the cultural image of investors are often large ballers dropping thousands of dollars at once. That’s not the case with Honeycomb - our whole idea is that anyone can raise capital, and anyone can invest in a business they believe in.
You can also share with them this video
For an easy way of explaining Honeycomb to people who might not understand loan crowdfunding yet, try using this video!
What channels should I use to reach out to investors?
The beauty of crowdfunding is you get to be creative about how you reach out to people to ask for investments. Here are a few ideas of ways you can communicate your campaign out to people interested in investing in your business.
Your email marketing list
If your business already has a solid email marketing list, this is a great place to start when reaching out to potential investors. If someone is on your email list, there’s a possibility that they like your business a bit more than the average social media follower and will be more likely to hear you out on your investment pitch.
Find ways to incorporate your campaign into your usual newsletter - include links to your campaign page, embed your campaign video, you can even offer incentives for people to invest, such as an email marketing list-only t-shirt for investing.
Social media is what crowdfunding is founded upon. It truly is one of the best ways of reaching out to a large number of investors all at once, and gives you a number of creative ways to pitch your crowdfunding campaign to the public.
We recommend at least two posts a week about your campaign during its duration - most people need at least 7 touches before they consider making an investment in a campaign. You don’t have to just stick to posting though - consider doing Instagram or Facebook Live pitches, or posting about it on your Story.
In your place of business
Having physical collateral about your crowdfunding campaign on hand at your physical location (if you have it) is an excellent way of reaching out to investors. Print out some flyers with a QR code linking to your campaign page - or if you have TVs in your business, put it up there as part of a slide deck!
This is especially effective if, for example, you’re looking to renovate or expand into a bigger, better place. People can see where you are and where you’re headed with your crowdfunding campaign. For example, if you’re trying to move out of your farmer’s market booth into a brick and mortar store, keep a stack of collateral at at your booth - people will get excited about your upcoming growth!
Start reaching out and let your community build you up!
By running a Honeycomb campaign, you’re building up your business and your community at the same time by inviting investments in your business. Learn more by filling out the form below!