Lisa Ashford: Five Innovative Funding Tips
Here are five innovative ways to raise flexible and affordable finance from the community to enable groundbreaking initiatives to scale and grow.
As the UK prepares for the COP26 Climate Summit in Glasgow this November, all eyes are on governments and world leaders to agree on workable solutions to the climate crisis. However, all around the UK, there are small, community-led organisations that are working hard to find their own solutions. Whether it’s community-owned renewable energy projects, sustainable transport schemes or eco-friendly community housing schemes, these pioneering organisations are taking direct grassroots action against climate change and other issues affecting our society every day.
It’s clear these groundbreaking projects are vital to the well-being of people and our planet, but in order to succeed, they need patient funding to scale and alongside the various funds, grants and programmes available to community organisations, many seek to raise affordable and flexible finance through crowdfunding, offering investment raises to the growing number of people in the UK who are seeking to use their money to support businesses they believe in.
So, here we’re sharing our top 5 tips for a successful raise for any community-led organisation looking to raise funds from individual investors crowd:
1. Warm up your crowd
Your community organisation will already have a strong base of supporters and networks and ahead of any crowdfunding raise, it’s important to energise your base and let them know what you’re planning. Think about the people who interact with your organisation and benefit
directly or indirectly from what you do. Let them know you’ll be raising funds and give them the opportunity to pledge their investment first. These people will give you the critical mass you need for a successful campaign.
When you crowdfund, the hardest bit is often getting off zero. This is why early mobilization of your supporter base is crucial, putting in their money when the offer opens and encouraging other people to invest.
2. Do the paperwork
This can be the most time-consuming part of the process, however, putting together an awesome offer document and compelling business plan is really key to your success. People invest with their heads and their hearts! So your offer document and business plan needs to show you have a great business that can pay a return, the skills and experience of your management team and the positive impact this investment raise will deliver.
It’s important to remember that although impact is a great motivator, so too is a financial return. Think about the % target annual interest rate you can pay, what financial product you want to issue (bonds or shares) and how long before investors get their money back. The better the return, the quicker your offer will fill.
3. Think about timings
As with most things in life, good timing is key! It’s important to think about when you want your
investment raise to go live and for how long. If you’re looking at raising a relatively small amount then you could be looking at reaching your target in 30 - 45 days. However, if you are looking for a much larger raise, 60 – 90 days might be much more feasible.
Also, it’s a good idea to tie your launch into a milestone in your organisation’s development if you can. Are there key events that you want to align your offer to such as planning permission or an asset transfer?
4. Develop your strategy
Promoting your investment raise to the right audiences in the right way will need a robust marketing strategy. At Ethex, we work with organisations to plan great multi-channel campaigns that will reach the people most likely to invest in their offers with the right messages.
Think carefully about the kind of investors that your offer will resonate with and remember your campaign will go through several different phases – a launch when everything is new and shiny, a middle when initial interest can lag and where you might need to give your offer more of a push and an end where activity picks up again as people look to invest ahead of the deadline.
You will also need to take stock of what assets you have to promote your offer in the best way. Great photography, videos and branding are always a good way to get more interest and planning events, webinars and stakeholder outreach can make all the difference in getting your messages across to your target audience.
5. Focus on the impact
When you’re promoting your offer, remember to keep front of mind what it is that makes your organisation unique. The positive impact you create, whether it’s environmental, social or both is what will really draw investors in, so have your impact messages clear and forefront in everything you do. Visual marketing assets are a powerful way of conveying impact in a very tangible way. Whether it’s high-quality photos of renewable energy projects, families working the land in ecologically considerate ways or people using new low-carbon forms of transport – these are all great ways of engaging with potential investors. Videos too are a great medium and can communicate stories in a much engaging way.
So, get ahead of the game and make sure you’ve got a ready-to-go library of photos, testimonials, infographics, videos and impactful case studies to help tell your amazing story!
Lisa Ashford is CEO of positive investing platforms, Ethex and Energise Africa. With over 20 years of experience in energy and environmental markets, Lisa is a leading voice in the positive investing and social enterprise sectors in the UK. Passionate about positive investment, Lisa has led the Ethex and Energise Africa teams to raise over £100 million for projects that do good.