Reach Out to Your Crowdfunding Investors for More Money
At some point after your initial crowdfund investing campaign has succeeded, you’ll likely find yourself thinking about tapping into this funding source again. You don’t want to do so too quickly; starting a new campaign a month after the first one ended demonstrates a serious lack of financial planning and likely won’t result in a repeat success.
But if a year or more has passed, and if you’ve done a good job communicating with your investors and you’ve turned their money into a revenue-creating company, you may be in a position to reach out to them for more support. In this situation, if you’re looking to raise more money, your initial crowdfund investors are a great place to start.
Plan out carefully how you’re going to reach out to them. You want to inspire confidence, not fear. As always, be honest and transparent with your investors (and yourself and your employees as well). Show them the successes you’ve had since the first funding round closed — milestones reached, revenue created, investor ROI. Lay out why you need more money and, just as you did the first time around, your sources and uses of funds.
Before posting your campaign pitch for the world to see, send out a communication to your investors to test the waters and see how interested they’d be in investing more money in you and your company. Your investors will likely have a series of questions that they want answered. Answer these questions sufficiently, and then use the answers to craft your new crowdfund investing campaign.
Your second crowdfund investing campaign should be much smoother than your first. That’s because your initial traction is crucial to the eventual success of your campaign.
If you can get all or most of your existing investors to reinvest in your company as soon as your project goes live (by encouraging them to invest by a specific deadline within the first few days after you go live), you’ll benefit from some terrific online visibility. More visibility should equal more investors and more money.
What happens if you reach out to your investors to test the waters and they aren’t interested in investing more money? In this case, you need to reevaluate your plans. If you go forward in launching a new campaign and people see that the initial investors aren’t lining up to reinvest, the potential investors will think (and rightly so) that there’s a problem either with you or with your business.
If there’s some other valid reason why your investors don’t want to give you more money, you need to communicate this reason clearly in the campaign pitch so potential investors won’t be scared off.