Curious about the untapped potential of holiday season fundraising? Tune in to our latest episode of Funding Innovation, where we chat with Netcapital CEO, Rob Burnett and answer questions from startup founders.
Gain fresh insights as Rob challenges conventional views on holiday fundraising and highlights why this season might be your golden opportunity. We also delve into the intricacies of list building and emphasize the importance of leveraging your personal network without hesitation.
Explore the dynamics of personal outreach and the strategic utilization of platforms like LinkedIn as we unravel ways to leave a lasting impact in the investment ecosystem.
If you're a founder with a limited network, don't worry! We've got practical tips and strategies to assist you in constructing a robust community and making a standout impression in your industry. Additionally, learn how consistent email updates can keep potential investors engaged and invested in your entrepreneurial journey.
Don't miss out on this insightful conversation filled with actionable advice. Tune in and elevate your fundraising game!
If you want to raise capital for your business visit us at https://netcapital.com/
Curious about the untapped potential of holiday season fundraising? Tune in to our latest episode of Funding Innovation, where we chat with Netcapital CEO, Rob Burnett and answer questions from startup founders.
Gain fresh insights as Rob challenges conventional views on holiday fundraising and highlights why this season might be your golden opportunity. We also delve into the intricacies of list building and emphasize the importance of leveraging your personal network without hesitation.
Explore the dynamics of personal outreach and the strategic utilization of platforms like LinkedIn as we unravel ways to leave a lasting impact in the investment ecosystem.
If you're a founder with a limited network, don't worry! We've got practical tips and strategies to assist you in constructing a robust community and making a standout impression in your industry. Additionally, learn how consistent email updates can keep potential investors engaged and invested in your entrepreneurial journey.
Don't miss out on this insightful conversation filled with actionable advice. Tune in and elevate your fundraising game!
If you want to raise capital for your business visit us at https://netcapital.com/
Kathy Kraysler:
Hi everyone and welcome to Funding Innovation with Nat Capital. I'm Kathy Craisler. I head up the marketing team here and today I'm speaking with Rob Burnett, our CEO, and we're answering questions from founders. Rob, our first question is from someone who wants to know whether he should put his fundraising off until the new year. He's thinking if he starts in December, it's about time because it's the holidays and people aren't going to have time for him. So how would you respond to that? What advice would you give him?
Rob Burnett:
What I'd say is that typically the holidays you get two types of people right. You get people who they're the people who shut off and say no, no, no holidays for family, I will not talk to you, go away. I'll talk to you when I'm back in the office. But then you get the other people and it's not an insignificant chunk who say, if the only time I ever get to open that email for my friend about that fundraising opportunity, or dig in or sit in my office and just kind of relax and sip hot chocolate and like read the stuff you sent me. And so I personally I guess I were running a fundraiser on this time of year I would run it through the holidays with the understanding that some investors are going to completely ignore me and I need to go make sure. I have a plan to retarget them in January. But there are some people who you're never going to get because they're so busy and the holidays are actually kind of the perfect time to try and snag them. And so as long as you go in with that mindset, I think they're really valuable.
Rob Burnett:
The one other thing I would say about the holidays for anyone or anyone who's thinking about running any kind of paid marketing, so digital ads, things like that, this is. This can be a really rough time to do that because you're competing against. You know every company and their mother trying to get attention for Christmas gifts and other things. It makes ads face really expensive this time of year. So my recommendation is typically, if you're good, if you do have a paid marketing campaign of some kind doing either just like a and Kathy might be able to tell me exactly the word for it but like a prospecting campaign, so campaigns designed to just get people to sign up for an email address or opt in to something, versus a campaign that's designed to get people to go all the way through the funnel to invest.
Rob Burnett:
Those campaigns tend to be a little more expensive, whereas just a prospecting campaign, where you're just collecting emails that you can email later about the campaign, that can be a little cheaper in a way that more cost effectively start building up a list without spending too much money at this time of year. Anyone who can. I actually just recommend getting live basically as soon as you can and then going from there and understanding that you know, sometimes it's really great to have a really good launch to your campaign and a really strong start. It's obviously ideal. But some companies really ramp up into it slowly, and that's okay too, as long as you're ready for it and ready to kind of commit to that longer process.
Kathy Kraysler:
Thanks, rob. Okay, so our next question comes from someone who's asking about list building. He says you often talk about the importance of list building and, starting with friends, no-transcript.
Rob Burnett:
Every company's got to. You know, the only way to raise money is essentially to build a list in one way or other. You never have to write it down. But, like, you got to go talk to people and ask them for money and whether that's in the form of emails or digital ads or phone calls or events, like some way you have to get out there and ask people for money. And so a lot of people get very nervous around this, right, because it's awkward to ask people for money. You know, if anyone's ever raised money for a charity, it's awkward. But hey, I'm running a five-day, okay, will you escort me? People will go, roll their eyes and go. I don't know.
Rob Burnett:
And so you know my pieces of advice there are twofold. Like. One is you know, certainly don't ask anyone who you know. You can't, quote-unquote, afford to ask, right, if it's someone whose relationship you could ruin because you asked them for money, don't do it. But I recommend entrepreneurs take as much of a this is an opportunity, not a charity request mindset as possible. Because, to be honest, if you're not willing, if you don't believe in nothing in your company to have your aunt or uncle or cousin or, you know, friend from grad school invest even a little bit, or you're not willing to ask them or even just say hey, just so you know I'm doing this thing if you want to get in. If you're not willing to do that, then you know that casts here. Then if you're a big investor, why would some other person who's never met you trust you with their money if you're not willing to ask the people who you know for money? And so you know different members of founding teams are going to have different levels of comfort there and you know they don't have to share their lists amongst each other.
Rob Burnett:
But I do think it's important that companies go through the exercise of doing that list building Because you know it might seem like you know if I need to raise a million dollars on the capital, that probably means you need about a thousand investors. So it seems silly to have like four friends invest. But those early investors compound really they're really important, and they're important for two reasons. The first reason is simply kind of monetary. Getting those first dollars in is harder. Right, the first hundred thousand on your way to a million is way harder than the last hundred thousand, like ten times harder, fifty times harder, and so every dollar counts as you get through that first five, ten, fifteen, twenty-five, fifty percent of your raise. Those dollars count so much more than the last half, and so even one or two people. It's important to get it done.
Rob Burnett:
And then the other thing that I think is really important, that I think is underappreciated in the founder community, is that in general, we're bad at pitching our business, and I know some people might think, no, I got it, I got it down. But in general we're bad because and we're geared that way, because as founders of companies, we're inherently a little bit out of step with reality. And I say that with like all the love in the world. But in order to start a company that no one else has started before, you have to kind of have a vision and see something that the average person does not see. And so when we talk about our businesses, we tend to make leaps in logic, we tend to not really nail down and we live it every day right, so we don't tell the story quite as well.
Rob Burnett:
And so the reason why I say all that is that when you talk to friends and family, people who know you, if you're brave enough and if you're kind of organized enough. You can ask them no, no, no, seriously, what's the real feedback you have on my pitch? Do you like it? Where am I losing you? You might invest anyway because you like me. You might not invest either way, because there's nothing I could say to ever convince you, because this isn't your thing.
Rob Burnett:
But what about my pitch? Is getting you excited or not? Where am I losing you? And the founders who do that five, 10, 20, 20, 50, 100 times? They just get better at talking about their business and it's subtle and it's insidious and it just happens. And so when they end up in rooms talking about their business or they end up running ads on Facebook, their messaging is just better. And I've seen that over hundreds of fundraisers the companies that are willing to spend a little bit of time on someone who's going to invest $100 as the $25,000 checks they're getting from the local angel group those founders are just better at closing capital. Okay, so that was a lot.
Kathy Kraysler:
No worries, that was really helpful, I'm sure. So our next question has to do with a person who wants to raise funds on an equity crowdfunding platform like net capital, and he wants to know when you should start the process of talking to people. Are you allowed to start telling them about it before you launch?
Rob Burnett:
Great question. So I think there's a couple of things here. So what I recommend everyone do is you have to be a little careful here, because there's some rules around how you can advertise. You shouldn't do any general solicitation before your fund raise starts. So no mass emailing, no webinars. Don't go speak at a conference and then say, hey, everyone, I'm gonna raise on that capital in three weeks, just kidding, then don't do that stuff.
Rob Burnett:
That being said, what you can do is have one-on-one conversations with people you already know. So if you have and I keep saying like aunts and uncles or cousins or brothers and sisters, if you have family members or close relatives or close friends who you already talk to about your business, I recommend talking to them as early as possible. Doing exactly what I said, hey, but frame it as questions and advice. Hey, I'm thinking about raising money. If I did, would you invest? Well, I don't know, maybe. Okay, can you talk to me about what you would need to hear from me to invest? Right? Oh, I would want to hear this, this and this. Great, can I pitch to you? Yes, so working that is really, really helpful and doing that as early as possible is great, because then, even if it's five or 10 people, you get them keyed up and then when you launch, you go call them up to hey. You know how you said you were gonna do it. Now's the time, please get in. So doing that early is really good. Second piece of advice I have is if any of you have larger email lists so that could be 100 people who follow your business it could be a customer list of we've seen people with customers as much as 100,000 people or more those lists you should start warming up, and what I say by that is not telling them a fundraise is happening, but start sending them stuff. Not overwhelming them, but hey, just wanna give you an update on the business. Hey, you know I'm gonna be at this conference next week. If anyone's around, hit me up. Hey, we're gonna host a product demo online. Sign up here on Zoom, doing those things to warm up people and get them used to seeing you and used to seeing you have progress.
Rob Burnett:
It's a great thing to do on LinkedIn as well. Just start to get more active. Just put yourself out there. Say hey, talk about what you're building. All that warmup happens so that when it does come time to start asking people for money. They're not like who is this person who's asking you for money? They're like oh, I've seen them like 50 times and they've got a cool product. They're raising money. Maybe I should take a look. That warmth is really helpful. It makes it feel much more authentic and it makes them connect with you as individuals. Right, you should really put yourselves out there. You want people connecting with you as individuals.
Rob Burnett:
A founder, ceo, executive team member however you're situated in the company. If you're just a kind of faceless company asking for money on the internet unless you're really cool or like really have a great brand or a really strong presence, it's going to be hard, okay. So number one is talk to friends and family. Number two is start warming up your existing lists. And then my third piece of advice there is once you're alive, I like to think about outreach strategies in the form of concentric circles. So if you think about the people closest to you, you want to.
Rob Burnett:
So what I've seen a lot of founders do is they've got friends and family and they've got customers and they've got a Facebook campaign and they've got like a list they bought and on day one, they'll just hit everybody at once. They'll just fire away and the problem with that is the people who are farthest away from you, both physically and kind of metaphorically. If they come to an offering page with like $1,000 raised on it, they're just not going to convert very well, whereas a friend and family they might know, hey, this is certainly on. I want to be the first to give. So start with the people who are close to you, right On day one, and say hey, you agreed to invest, you want to support me? Here's how you can do it. Please do it, and for each founder it's going to be different.
Rob Burnett:
But take time to work your way all the way through that group, right?
Rob Burnett:
Call them a couple of times, chat with them, get them in right, that might get you to 50 bucks, that might get you to $500,000, but that you know.
Rob Burnett:
Get through that list, then move on to the next one.
Rob Burnett:
Okay, now it's like my list of 200 people who are company insiders and I'm going to post a little on LinkedIn and do that for a little while and get them in as much as you can. Okay, then I'm going to go to my customer list, which is like a 10,000 person list, right, and I'm going to start hitting them up and I'm going to host 11 hours for them and I'm going to do that stuff, and then I'm going to go run a Facebook campaign and then I'm going to, you know, go get on a podcast or whatever. It is right, but you can see how, if you stack it that way, you'll increase your conversion rate all the way through your funnel and all the way along your fundraise, whereas if you start with a hundred thousand person list on day one and you're not an expert at it and you don't have this people super warmed up and committed to you, you'll send a hundred thousand emails and there'll be crickets and then you'll sit there and go. I don't know what to do now.
Kathy Kraysler:
That makes sense. Yeah, thank you. But we also have a question from a founder who says he, you know he doesn't have a lot of friends or family to speak of, and you know where does he start. How can he go about building a list?
Rob Burnett:
So, yeah, a lot of founders end up in that position, so you're not alone by any stretch. I mean, my first piece of advice is, like, take it one at a time. Like if it's a spreadsheet that's got one name on it, it's better than none, right? So, literally one at a time. Second thing I would recommend is now is your opportunity to start building a name for yourself in your industry. So industry is where you're going to find the best communities. So, like I would be one, I'd be starting to post on LinkedIn, tagging people in the industry, things like that. And this is a bit of a court not a court, but a kind of funnel trick. But what I would do is, whenever you do post something on LinkedIn, ask a question, get people to engage with you. Then what I would do is I would, on if you have a landing page or a homepage on your website, I would create. Any simple website builder will have the opportunity for you to build like a pop-up. Like you've all seen this a million times when you go to e-commerce stores where it's like, hey, sign up and get 15% off, you should put that on your website, like sign up to stay in touch with all my latest news. Right, that's all it needs to be. But start creating an email list that way. So post on LinkedIn link to that page. Get people moving that way.
Rob Burnett:
The other thing I would do is I would do similar things in any kind of forum. If there's a Reddit group for that, if there are websites that are specific. There's trade publications that have a lot of trade publications these days. Do online conferences. Go to those, see if you can get the email lists of those conferences, things like that, and start to introduce yourself On LinkedIn. There's really powerful search and I'd search for people who are investors or angels and I would reach out to them personally, one-on-one, be a LinkedIn messenger and just say hey, I'm working on this.
Rob Burnett:
You start up, can I pick your brain, or would you be willing to sit down and do a virtual coffee with me? And so you're not asking them to invest, you're not asking them to do anything. You're just asking them to get caught like a virtual coffee with you or chat with you for 20 minutes on the phone. Come up with a couple of questions for them. You can use the same ones for everyone who takes you up on it, but at the end of those call. You know, ask them what your questions. Hey, I'm doing this. Any advice? Anyone I should talk to get introductions to new people to talk to, and then say, hey, would you be willing I've got an update email list that, just to keep people updated on my progress Can I put you on the list? They'll almost certainly say, yes, put them on the list. And then you can update people every week with here's my progress, here's my progress, here's my progress. And then, before you know it, hey, I'm fundraising. Who's interested?
Kathy Kraysler:
Yeah, those are some great tips. Thank you, rob. That's all we have time for this week, so thank you everyone for joining us and we'll see you at the next funding innovation with that capital.