To kick off the first in the series of our CEO Guest Video Blogs, we interview our very own, Russell Quirk, Founder & CEO of eMoov.co.uk on the success of his recent CrowdFunding campaign. eMoov had a record breaking achievement with raising £2.6million, making it CrowdCube’s largest prop-tech crowdfunding round. If you’re running a software enterprise startup looking for funding, please check out our website, www.episode1.com and get in touch, by emailing firstname.lastname@example.org Enjoy ! 🙂
RQ: I’m Russell Quirk, I’m the Founder & CEO of eMoov.co.uk, I’ve been dragged into the offices of Episode1, our lead investor to talk about our very very successful recent CrowdFunding campaign.
JG: Why did you decide to do a CrowdFunding campaign?
RQ: Two principle reasons, one was because of the speed, that I understood CrowdFunding could be undertaken in, historically where we raise money through private equity and VCs before, it has taken 6–8 months. CrowdFunding although it can be pretty intense, my perception was having looked at CrowdFunding case studies that actually it was going to be quicker, so lots of preparation, quite an intense campaign and then a close, but we anticipated we could do it in 3 months as opposed to doing it via institutional funding which would maybe take twice as long as that.
RQ: Second reason, it was very much also a marketing campaign, so it was not just about the money, but it was about my target, which was to try and encourage 500 people to invest in the business. We exceeded that; we exceeded it by some margin actually, by about 50%, so we ended up with nearly 800 investors. So the rationale behind that was a further brand building exercise.
JG: Did you research previous companies that had crowd sourced?
RQ: I looked at some of the real superstar campaigns, so for instance JustPark, Sugru and so on, so they were two of the high profile crowdfunding campaigns. And, I also looked at some competitor stuff, so we had two of our competitors raise before us, Easy Property raised at a very high valuation, raised at about £1.4 million a few months before us, and then Estates Direct, who also raised about a similar amount, at a valuation of £23million. So, they were both relatively successful, we ended up dare I say it, raising twice as much as they did, so were a bit more successful, but we definitely looked at them as barometers I suppose, as benchmarks.
JG: Apart from not hitting your target, what was your biggest fear?
RQ: That is definitely the biggest fear! I don’t know, I suppose I was worried about the time it would take, because that was an unknown, and it did take a lot of time, the preparation and particularly during the campaign. If you’re running it properly there’s a lot to do in terms of answering potential investors queries, either by email or on the forum. CrowdCube run a pretty slick forum, where you answer questions and its all public. I think as a consequence, of it being so visible and transparent, I guess there’s two fears, one is that you’re really showing everything to everybody, which means you’re competitors see your financial snapshot, your three year plan, an element of your marketing strategy, so that was a bit of a fear.
JG: Who were your target audience?
RQ: We set the investment threshold really low, so some people only advised us to accept investments of £500 and above; we chose to accept, as you can with CrowdCube, from £10 upwards. If you look at the profile of our campaign, half of our investors, about 400, just over 400 investors, invested less than £500. In fact, 400 investors invested an average of £105, so basically 400 people accounted for just £40,000 of the campaign. So we could have done without that? Yeah, I guess, but then I wouldn’t have those 400 people as advocates.
JG: What sources of marketing did you use the most and why?
RQ: Anything and everything, so we really drew on all of our marketing experience. So, first of all we did a match funded deal with CrowdCube, where we took some tube advertising. For some campaigns, if you are raising over a certain amount, CrowdCube will (not sure if they still do it, but in our case) will support you in terms of match funding, some London Underground advertising. So, we had 95, 16 sheet tube posters across the London Underground network, 2,000 tube ad cards, adverts that actually go in the tube carriage. I don’t think we can actually attribute specific investments to that, but it was a nice bit of background marketing. We did an awful lot with our own networks; customers, staff, investor networks, my LinkedIn network, our Exec teams’ LinkedIn networks and so on. Social media was very very big, so we have a reasonable following from people, particularly again investors and staff, on social media. CrowdCube are pretty good at that as well in terms, with pushing the message out pretty constantly. Their investor network, with their hit weekly, by the way of their database, and of course something we are getting pretty well know at now, PR.
JG: And, what challenges did you face?
RQ: As the CEO & Founder, you have to be the figure head behind the campaign. So, I answered all of the forum questions, which there were 40 or 50 I guess, I answered the email queries that I got, I did one on one investor meets, we did three specific investor meets, so that took up a lot of time and a lot of effort. So, it was pretty time consuming, I reckon a third of my day during the 5 week campaign, was just based on the crowd fund. Worth it in the end of course, but that’s a real challenge, when you are also trying to hire people, get your product built think about next year’s budget and marketing strategy and so on, running the business.
RQ: And also I guess the challenge of closing a round out, making sure you end up with little drop off.
JG: What’s next and would you do it again?
RQ: Definitely would, and I see no harm even if you’re going to raise a big round, so our round will say be £10 million, would we do it again as part of that? Yeah, I think to raise a £1 million as part of a £10 million Series A, or Series B even and to use crowdfunding for a £1 million or that, as well as mixture of VC money, Venture Debt, and so on, I think that a really broad, and clever thing to do.
JG: Brilliant, well Thank you very much for your time and I’m sure all our readers and listeners will love watching this video.
RQ: Cool, pleasure, thank you.