Monday 8 September 2014

Is Crowd Money The New Smart Money?

Is Crowd Money The New Smart Money?

The adjective you often hear with “shareholder” is “disgruntled”.
That is because they don’t feel like they are part of the ride.
Shareholder communication is seen by most companies as an obligation
rather than an opportunity. They grudgingly provide prescribed
information that does nothing to excite shareholders.


This is a missed opportunity. Unlocking the power of the crowd is
easy with effective communication. Not snail mail with high-brow legal
and financial information.


But engaging online information about new products, new customers,
and new opportunities. Information that will keep the business top of
mind for shareholders, and will power up the crowd to go forth and
advocate. BrewDog, a Scottish beer brewery, is a classic example of a
company that has done this well, and has achieved an average of 167%
revenue growth over the last 5 years.


All companies should seize this opportunity, and particularly
crowdfunded companies. Equity crowdfunding shareholders are like no
other. They are likely to be early adopters of the product. They are
likely to be highly supportive of the business, the people behind it, or
the wider industry. They want to be advocates for the business. They
can be mobilised by engaging and regular information.


At Snowball Effect, it’s my job to ensure that each company connects
and collaborates with its crowd. We want to see successful ongoing
collaboration after its equity crowdfunding offer. We require each
company to spell out its shareholder communication intentions when
making its offer. This helps to create buy-in, expectations, and
accountability around the ongoing relationship. Snowball Effect also
helps by giving each company personal support and access to an email
marketing platform and templates to make communication easy and
effective.

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