Wriggle Founder Rob Hall Reveals What He Has Learned From Crowdfunding on Seedrs

Following the launch of Wriggle’s second crowdfunding campaign, founder of the startup Rob Hall revealed the five things he’s learned from crowdfunding on Seedrs.

Hall shared:

wriggle“Here we are, 18 months down-the-line on Wriggle’s journey. As the Wriggle team prepares for phase two of growth, we’ve returned to Seedrs — the crowdfunding platform where it all began for us.

“When I founded Wriggle, as a new entrepreneur, I imagined crowdfunding was a tool for the first investment package. Just a first port of call. But the market has changed. Crowdfunding has come of age. Platforms such as Seedrs and Crowdcube are now legitimate players; accessing serious raises. It’s long been the plan for Wriggle to close out this round on Seedrs.”

He revealed why he is convinced that turning to Seedrs makes strategic sense for the company:

  • wriggleFilling the Tricky Funding Gap between £150,000 and £1m: “There’s a headache funding gap for startups to negotiate between heavily incentivized SEIS funding (up to £150k), and the Series A stage — which seems to be moving later-and-later. Crowdfunding is an excellent tool to help startups manage this gap.”
  • Leveraging the Private Investment: “The plan was to raise the first portion of the round privately. We ensured a sizeable chunk of the round was committed privately (through Creative England and a number of Angels) at the same valuation. With that in place, crowdfunding becomes an excellent tool. By directing their money through Seedrs, we demonstrate their commitment and belief in Wriggle to the crowd, to attract their investment too.”
  • Marketing: “Wriggle is a consumer-facing product with a broad customer-base. The crowd fundraising process puts Wriggle in front of a wide audience of potential customers, and give our existing “Wrigglers” the chance to own a part of the brand.”
  • Seedrs has matured: “Crowdfunding is a nascent industry and evolving constantly. We’ve seen increasingly larger crowdfunding rounds, with a more clued-up investor-base in the last few years as it matures. On Seedrs, more than 340 businesses from 24 different countries campaigned on Seedrs in 2015. And in 2015, investors from 75 countries made 38,000 investments totalling over £64 million.”

Hall then shared the lessons:

wriggle“Wriggle was a month old when I launched our first Seedr campaign. I was naive. I imagined you simply created the campaign, and investors arrived — not realising the hardwork going on behind the scenes. With only a week to spare, I gave myself a fright — ultimately we succeeded — but I learnt a lot in the process. This time round, Wriggle has matured, there’s more to talk about, better customer and business evidence to show — but most importantly we’ve prepared much better — so I’m optimistic.”

Check out Hall’s tips below.

  1. Have investment committed before you start: “There’s a herd mentality on crowdfunding so ensure you’ve got a good chunk of the round committed to direct through the platform. It provides a strong sign that your company is an investable proposition.”
  2. wriggleMaintain momentum: “Momentum is very important. Campaigns that receive a large amount of investment recently will trend on Seedrs, pushing it to the front page platform for more investors to follow suit. Drum up more interest whenever there’s a lull. That could be through an investor update, releasing more privately secured investment, or pushing harder amongst your own network.”
  3. Have Business Plan, Financials and FAQs ready: “Investors ask for a business plan and financials. There will be the same questions crop up that did in investor meetings. Have answers ready to send as you’ll have a lot going on and this can take up time.”
  4. Make the campaign look good: “We put a lot more effort into making our campaign, video and images look good this time. As a company, we pride ourselves on communicating well and looking attractive — that should give investors confidence.”
  5. Don’t count your chickens: “We went into our last week of the previous round still needing investment. It’s nerve racking. I hope we’ll complete this round but it’s going to require constant hustling to get our story out there — and the opportunity for investors heard.”

In regards to why he turned to Seedrs, Hall explained:

rob hall“I’m a former lawyer so looking at the differences between Seedrs and Crowdcube (the two biggest UK equity crowdfunding platforms), the point that really stands out is the way Seedrs structure their investments. Rather than Crowdcube’s direct investment system, Seedrs have a nominee structure — meaning that Seedrs are the only name on the company’s share-register and act as representatives to the Company for all the Seedrs investors.”

Hall believed that this is certainly preferable for Founders, but also, in his opinion, for Shareholders:

  • Shareholders: “Have a stronger position, due to Seedrs’ collective bargaining power. (For larger investors who would prefer to have a direct relationship with the company, Seedrs will allow that).”
  • Founder Benefit: “One point-of-contact (Seedrs) for Investor issues (rather than dealing with 300 individual investors).”

He then added:

“Other crowdfunding platforms are available… in particular platforms such as CrowdBNK and Syndicate Room provide a good offering, connecting startups with angels looking to invest larger amounts. For Wriggle, we decided to go for the more public offering of Seedrs/Crowdcube — given the marketing benefits of reaching a wider audience.”

 


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