Early-stage companies on the Seedrs‘ platform have enjoyed a surprisingly high fundraising success rate.
I asked equity fundraising associate Eduardo Cannizzo, “Why?”
How much of this is Seedrs selecting well versus how much of it is the Seedrs’ team and platform doing well?
What can we apply to our business whether or not we use Seedrs?
Eduardo is a fellow mentor at Founder Institut. He joined Seedrs after his company Anna Money had success on Seedrs.
Seedrs’ preselection (which is a “soft” preselection) is based on a decade-plus’s experience on what founders have been missing:
- Financial sophistication, or
- Interpersonal skills
Their successful companies tend to have at least 1 million pounds in annual recurring revenue and some environmental or societal impact story.
None of that is particularly surprising.
A big part of the assistance provided by Seedrs is on effectively using your pre-existing community. For B2C companies, that is primarily customers. This presupposes that you have a pre-existing community. So if you are going to equity crowdfunding later, you really need to be building that community well in advance. Eduardo suggests building that community by creating and distributing “valuable” content via social media and weekly newsletters.
Eduardo emphasizes that the quality of the presentation graphics, including the platform video, is critical and that professional assistance here is generally required. They have samples and case studies and provide critiques and suggestions. Seedrs doesn’t help create these materials but can refer you to vetted professional service providers.
On the B2B side, the pre-existing community is generally the founders’ personal connections. The additional investors on the B2B are in part drawn to the secondary market that seedrs hosts for stock bought on their platform. This is unusual in the industry and has been gaining industry attention.
Seedrs helps with many details and logistics that can otherwise be distracting, time-consuming and expensive. For example, Seedrs has a legal team available such that the startup does not typically need to get outside legal services related to the raise.
Seedrrs provides a collection of free educational materials at https://www.seedrs.com/academy/.