Using Crowdfunding as a Marketing Tool

crowdfunding as a marketing toolCrowdfunding is not only a platform for raising money, it can also be used as a tool to spread awareness for your brand
It was a campaign for Chapel Down on Seedrs, the UK-based crowdfunding platform, which caught Collider's interest. They had orchestrated a community of strangers to participate in their mission and vision – and people had responded by investing in their campaign. We wanted to do that for the Collider Class of 2015.

One of the things we take pride in at Collider is investing in smart people with smart tech - but only with the smartest money. Our investor portfolio has some of the biggest names in MadTech behind it: Richard Fearn, Andy Porteous, and Deb Hennessy to name a few. But we wanted more. We wanted not just specialist angel investors but the whole ad community to get behind Collider. How could we do that? Seedrs was the answer. One of the more interesting things we found was the ability to use our campaign as a marketing tool.

Crowdfunding is a tool, not only a platform

First off, it’s perfect for market validation. As Dr. Phil Windley notes in this Forbes article, “The big payoff [to a crowdfunding campaign] is the information about the potential market we’ll get.” The Seedrs campaign showed us the sheer depth of enthusiasm for new digital marketing tech. MadTech is working for advertisers and marketers; the community not only wants more of it but also wants to support it. In only 13 days we were able to raise 100% of the funds. By the time the campaign closed, in a following 14 days, we were almost £100,000 over capacity and had over 100 investors from across Europe.

Secondly, the Seedrs campaign allows us to better relate to and reach our investors, brands and startups. The campaign embraced a new and innovative way of doing business, just as we encourage our brands to do with the startups. What better way to support innovation than to embrace the same values we teach to the startups?

Finally, it is an interactive addition to traditional press. It allows people to become a part of your greater marketing strategy by letting them participate in a small part of it. Philips used a crowdfunding campaign to actively engage with their customers through competitions, and we want to get the marketing and advertising community just as engaged with our startups by having a small equity stake in them. It was a risk to take on a crowdfunding campaign as a means for investment. There’s no testing to be done to figure out if it will work – no A/B testing, no focus group options.

In retrospect:

Calling the process stressful would be an understatement. After our campaign reached around 58%, we had a completely funded campaign within 25 hours. It was mental not being able to keep up with all of the investment coming in. Within 13 days we had exceeded our £330,000 goal – less than half the average time of a crowdfunding campaign. There were scary moments where things didn't look to be moving at all. But we kept pushing forward and being proactive to make things happen.

Crowdfunding Complete for the Class of 2015!

It’s been quite a week here at Collider – never a dull moment! As the excitement from Ad:Tech London cooled down, it was time for the Collider team to pull together and begin filing through the applications for the Class of 2015. Applications for the programme are open until November 10th, make sure you get your applications in before the deadline (and even share with your friends now)! Seedrs campaign

In other news, our Seedrs campaign has come to a successful close! As of Wednesday evening, only 13 days after launch, the marketing and advertising industry pulled together to collectively raise over £330,000! Investments ranged from £100 to £55,000 per person and over 60 individuals participated.

Investors of note include media guru Mat Morrison and CEO of Havas Media, Paul Frampton. Senior advertising executives from Ogilvy and WeAreSocial also invested in the Class of 2015. Some investors will further be actively involved in the mentoring process with the startups during the programme. They will also draw on industry connections and expertise to further supercharge the startups.

“The response from the marketing and advertising professionals has been overwhelmingly positive,” Rose Lewis, Co-founder of Collider said. “We’re encouraging them to invest in the future of their industry through startups, and they jumped at the chance.”

Each of the 10 startups will receive £50K in exchange for 11% equity. A hand-picked 5 of the 10 will receive £100K follow-up funding for a further 11%. Half of the funds from the Seedrs campaign will go towards the first round of funding and the other half will go towards the second round, with all of the investors’ money being distributed evenly between all the startups.

In short, high praise goes to the marketing and advertising industry! They took the challenge head on and took an active role in shaping the future of their industry through emerging tech - their efforts paid off! The Class of 2015 has a group of mentors and investors behind it this year who have an envious track record, with even more brands signed up to help transform these products by acting as first market validators (more on this later). Things are moving quickly – this year will be bigger and better and we’re waiting impatiently to getting this race going…