#executive-strategy
Thread
Hi all, Pat asked me to share a bit about our .
Background: This is our 4th crowdfunding campaign - we did 1 equity round with (€1.3m) and 3 to finance bougie 3 flagship stores (€1.2m total). We don’t have bank loans or credit lines, but we did also raise €1m earlier on from 18 angels/customers.
The campaign: Raise €500k to develop womenswear
• What: Bond issuance with 7% annual interested and we pay back in 1 tranche after 4 years. Our bank offered 8% interest rate, so this is cheaper.
• What: We launched it in January because it’s a slow month in terms of sale, CPMs are low, and engagement high.
• Why? To get signups for our new womens line, create buzz, and to finance it, of course. We will keep running until €1m raised.
• Setup: Eyevestor platform - there’s no fees and we do everything ourselves, so this is only a good choice if you already have an active community. Otherwise SEEDRS or Crowdabout now or something like that is better.
• Results: We sent 1 newsletter on Friday and posted organically on social. We didn’t know how popular it would be because close to 100% of our customers are men and this was about womenswear. But we got €342k over the weekend. It’s already transferred to our bank account.
• Feelings: We are happy with the engagement and see it as something that lifts the brand and builds goodwill, so all in all we would actually pay a higher interest rate to our customers than we would to a bank…
Thanks Kasper - super creative model!
Two questions come to mind for me -
1. I presume Eyevestor takes care of all of the payments back to these investors?
2. What was the typical investment size?
- Yes
- 2,900€
Thank you for sharing Kasper! We’re starting to think about how to raise bigger amounts in the next year and this is incredibly helpful. We also have a very strong community even though we’re pretty new in the game, and I love the idea of crowdfunding rather than going the VC route.
One question, I always hear that when crowdfunding you should have at least half the amount already committed by some angel/bigger investors before starting. Was that the case for you in your first campaigns, or was it all through the community?
I think it would work well for your brand!
We have always had 0% commitments before launching. Angels typically want much lower valuations than you can get in crowdfunding. It’s much easier for the platforms when you already have pre-commitments. But I see so many campaigns with 80% pre-commitments, that hope it will get the ball rolling, but then they don’t truly activate their communities and end up with very little additional funding on top of the angels. From the outside it looks like a nice round, but in reality it was just a normal funding round plus 20% extra from fans.
I think its better to do smaller and more frequent rounds, so there is always an event to look forward to for people on the investor waiting list. We hit the max funding of €1m within a week, so then we know the waiting list will be buzzing for when we 1 year from now send an email and say “for a limited time we open up for new investors” 🙂
Thanks Kasper super helpful!! I'm even more interested in crowdfunding now