Posted on: 27 March 2015
The British equity crowdfunding market is used to record breakers. It’s such a rapidly growing type of alternative finance (it was the fastest growing form of crowdfunding between 2012 to 20141) that it epitomises why the word ‘alternative’ needs to be removed from the title.
Last month JustPark broke the UK record for the biggest technology equity crowdfunding round. The app and website raised £3.7million in just 34 days, £2.7million more than its target. JustPark used equity crowdfunding platform Crowdcube to raise the funds.
What were the magic ingredients that made JustPark’s campaign a record breaker?
Luke Lang, Crowdcube co-founder and CMO, likens it to “the tastiest cocktail you’ve ever had.”
“JustPark executed their crowdfunding campaign perfectly. Their success comes from a recipe of lots of different factors that came together at just the right time,” explains Luke.
“There were already backed by BMW i Ventures and Index Ventures,” he continues, “which gave the crowd confidence in their credibility. They have a great team who had learnt from the early mistakes of running a business and they had already gained momentum by doing a private listing before going public. Their members respected that and responded well to it.”
Anthony Eskinazi, founder of JustPark, agrees. “The main thought on everyone's mind was that this campaign should be about giving our users, without whom JustPark wouldn't exist, the chance to share in the business' future success,” says Anthony. “That's why we gave JustPark users a priority period of 48 hours during which they could invest before anyone else in the UK."
So experience and putting their users at the heart of their campaign were critical to JustPark’s crowdfunding success. But what about the relationship between them and their chosen platform?
Unsurprisingly, the teams at JustPark and Crowdcube established a strong bond. Anthony and his board thought hard about which platform to use for the raise. They got it spot on, because Crowdcube thoroughly enjoyed the experience too. “We worked together as a team to make sure that we maximised any PR, social media, email and above the line opportunities available,” Luke says. “They’re great people to do business with.”
Messaging was also key to why JustPark’s funding target could have carried on beyond the £3.7million mark, a figure it only stopped at because of EU regulations.
“To create a strong campaign,” says Luke, “you need to generate the right narrative behind the business. This includes demonstrating your achievements so far, what distinguishes you from the rest of your market as well as the other campaigns on the crowdfunding site.”
That advice wasn’t lost on Anthony and his team. “Our board worked meticulously to make sure that the valuation and message around the crowdfunding was right,” he says.
Finally, JustPark understood the importance of knowing what type of investors it wanted to involve in its business. They chose to work with the UK’s number one equity investor of 20142 because of the size and calibre of its investors - the largest single investment for JustPark was £500,000. This says a lot about the people putting their money into the business through Crowdcube.
In summary then, aspiring entrepreneurs looking to follow in Anthony’s footsteps can launch the next record breaking crowdfunding round with these vital ingredients:
- put your users first
- build a great relationship with your platform
- get your messaging right
- choose the right investors.
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