Invivo Wines raised a respectable $2 million on Kiwi investment crowdfunding platform Snowball Effect last year. Prior to listing shares on the site, Invivo was described as the fastest growing wine brand in New Zealand. The company had set a funding target of $500,000 on a pre-money valuation of $8 million. The over-funding cap allowed it to raise more closing the campaign with 439 new investors. Now the winery is sharing some insight into what they did to nail their funding target and as one should expect – it was a lot of work.
Speaking with the NZ Herald, co-founders Tim Lightbourne and Rob Cameron explained some of the advance work prior to raising a single dollar. One thing they did was to study other successful campaigns – specifically in the UK – to learn what had worked for others. They mentioned the BrewDog Equity for Punks offer and how they had turned customers into brand ambassadors – something that appealed to the pair.
Lightbourne and Cameron also explained they started preparing for the equity round 6 months prior to the offer;
“We travelled around the country pitching what we were about to do – talking to the wine growing community and their families in Marlborough, pitching to investment banks, and generally telling our story to anyone who would listen. We spent months working on our investment memorandum, and brought in a financial investment specialist and international consultant to help us with aspects of that. There was a lot of detail and work that went into that behind the scenes – and probably a lot more than most people realise.”
Beyond pounding pavement for months to spread the word, Invivo put to work their database of about 4000 people. The duo started preparing consumers to become investors in the small company long before the offer hit the pages of Snowball Effect.
As for the offering memorandum they worked on this document for “months”. They even hired a “financial investment specialist” and an international consultant to help prepare their offer to assure compliance.
The co-founders understood there were no guarantees. Even when the offer went live they were not certain as to how much, or how little, they would actually raise;
“..it was also challenging to put ourselves, our company, all our years of work, and our numbers out there. And when we first put out the amount we were after, we didn’t even know if we’d reach our $500,000 minimum target, so there was definitely a lot of stress around hitting our targets.”
— Invivo Wines (@InvivoWines) February 3, 2016
Invivo has taken part of the funding to expand operations into the historic 114-year-old Te Kauwhata winery in Auckland. At the new facility, Invivo will now be able to bottle up to 12,000 bottles a day. Previously operations were split between a contract producer in Marlborough and a rather small winery in Auckland. All of this probably would not have been possible without the capital injection provided by equity crowdfunding.
The moral to the story is that raising capital online is a lot of work. Fundraising is no field of dreams. It is also selling securities to the public – something you cannot take lightly. Invivo has come out on top but they had the product, along with the platform, and were willing to do the legwork to make it happen.
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