Crowdfunding is a popular and often successful funding route for startups – but is it right for you and your business? On a recent episode of our Seed Stage podcast, we spoke to three experts who know what makes a great crowdfunding campaign.
Betmate is a startup on a mission to make betting fairer, more responsible and ultimately, more fun. It’s a social betting platform where players bet against each other in low-stakes, free-to-play games, challenging the typical format in which players bet against huge betting organisations.
Founders Ryan Lawrence and Declan Dowling, and Global Head of Partnerships at Seedrs, Emily Fitch-Deeley, joined us to talk about the crowdfunding journey, and how founders can get as much as possible from raises of their own.
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Why was crowdfunding right for Betmate?
The success of disruptor brands Declan and Ryan admire, like Brewdog and Revolut, inspired them to try crowdfunding.
Declan explains: “we are quite anti-[betting] industry; we don’t offer slots or casino-style games, we don’t have instant wins, and even if [customers] wanted to spend large amounts of money on Betmate, they physically couldn’t. We’re really against that stuff; we want to be a betting brand that disrupts the industry and makes it fair.”
What do Seedrs investors look for in businesses?
As the world’s leading private equity platform, Seedrs facilitates investment in companies looking to raise money in exchange for equity. Founders can bring in money from customers, community and Seedrs investors to widen the pool as much as possible.
Emily explains that what investors will look for depends on the stage and type of the business. If you’re quite early stage, investors are going to look at the previous experience of the team. Have you worked in the industry before, or successfully run another startup?
If the business is at a later stage, investors will ask questions like:
- Have you got backing from venture capital?
- What’s your revenue to date?
- What’s traction like?
- What are the metrics behind you?
Emily also highlights the importance of a great pitch to win over investors.
“It’s important to make sure you’re telling your story through the crowdfunding video and your pitch, highlighting the things that are relevant to the stage you’re at. Our investors on the Seedrs platform are quite sophisticated so they look for more traction, so Series A or seed works really well.”
How did Betmate secure crowdfunding?
Ryan identifies that milestones Betmate had already achieved helped them to secure the next round of funding.
“Our customer acquisition cost was about 20 times cheaper than the industry average, and we’d just been one of the Tech Nation Rising Stars regional winners. We also had information like the number of bets processed and the amount staked, and were able to show 20%+ month-on-month growth over eight or nine months”.
Declan adds that the timing of the crowdfund was also a big factor in their success.
“We specifically chose to do our crowdfund during the World Cup [2022] because the hype around football was already huge, and we knew that we were going to do well in terms of growth during those months”.
How can crowdfunding help not just with fundraising, but with marketing too?
Emily recalls that when she crowdfunded, she had 150 investors on board supporting her not just financially, but as unofficial brand ambassadors. “They’re an extension of the team, real people who have a belief in what you’re doing”.
Betmate have also connected with advocate-investors through Seedrs. “We had a guy from a marketing agency who put a couple of thousand in, and offered to do stuff for us at cost or at less than cost just because he really liked what we were doing. And that’s something we probably wouldn’t have had without the Seedrs crowdfund”.
Ryan and Declan add that inadvertently, the crowdfund has generated marketing material, too.
“Our video cost us around £7000, and the three minutes took about 12 hours to film. But the company sent us the outtakes afterwards which ended up being funnier than the video itself. We’re now putting clips from those outtakes on our new website, because our industry can be a bit faceless and we wanted to bring more personality”.
How can founders get their pitch right?
Emily highlights that you get from crowdfunding what you put in. “If you make your video on your phone thinking you’ll just put something up and see what happens, nothing will happen!”
She adds that to impress investors and gather momentum, founders must demonstrate long-term vision as well as just the next stage:
“People don’t want to just buy into a company that will have steady growth, they’re looking for the next unicorn! So it’s about appealing to people’s hearts and minds. The minds are the revenue and metrics, and the heart is the marketing, the video, the angle”.
What does the journey look like before the raise?
Emily says your Seedrs crowdfund should start as early as possible, as the Seedrs process is comparatively short.
“The Seedrs process is two to three months in total. You have one month working with our investment team on due diligence, writing your pitch, and making your video. Then we have a private stage where you get investment from your network, so you’re not at 0%! Then you’re live for 30 days on the platform.”
Declan and Ryan agree that starting early is good advice to founders looking to crowdfund.
“We only started the process with Seedrs four weeks before going live, and it was crazy stressful! We rushed because we wanted to be on the platform for the World Cup, but it would have been nicer to have a three-month lead time. You want to have enough time for things like the community, your ‘launching soon’ page, your outreach”.
Declan adds that preparation also includes getting ready to defend your business idea. “You will be picked apart, and you need to have answers ready. So if someone asks about a competitor, or has opinions on your business model, you need to answer those questions. And you’re not just answering to them, you’re answering to every other prospective investor”.
What are your top marketing tips for promoting rounds?
Ryan’s top tip: a great video. “People engage with it straight away, and as a consumer or an investor, you can learn so much from a video about the brand’s values, and its future. So it’s a very powerful tool”.
Declan seconds a strong campaign video, and adds that your community and network are your strongest asset.
“It’s about authenticity and transparency, because people can see through something that’s not authentic. Your audience can buy into you, and turn into brand ambassadors, who put money into your business because they believe in it”.
Emily’s advice for promoting your funding round is to get creative, and don’t be afraid to be different. “Think outside the box with how you’re doing your campaign. I’ve seen some great pieces of guerilla marketing with really cool engagement pieces. Think about how you’re communicating your campaign, the people you’re communicating to, and can you tie into themes or trends. Think of it as a marketing campaign as well as a way to raise money”.
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