The keys to a successful crowdfunding campaign

The first invested in the shipping company Towt because using sailboats to transport goods “makes sense”. A second wanted to “participate in the evolution of the economy in this area and encourage this type of entrepreneurial approach”. On Lita.co, a Parisian crowdfunding platform, testimonials from individuals who have chosen to invest in the Towt company display their commitments. In just a month and a half of fundraising, this company which provides freight transport by sailboats raised 4.5 million euros last summer, in the form of convertible bonds, from 2,400 investors.

William the Great, one of the founders of the shipping company, did not imagine such an impact and raising more than four times the amount initially planned. He quickly feels the craze taking over. “This citizen campaign had a stimulating effect, he recalls. The fact that 2,400 people are committing with us to the construction of two sailing cargo ships to decarbonize maritime transport sent a strong message”. The operation made it possible to launch the construction of these two sailboats. The company born in Finistère and now based in Le Havre has simultaneously raised 4.2 million euros in equity from traditional investors. A crowdfunding campaign can indeed complement traditional bank financing and even prove to be a good leverage effect.

2.3 billion euros in France

Like Towt, more and more companies are using crowdfunding to finance their projects. In 2022, the funds collected “by the crowd” represented 2.3 billion euros in France, a figure up by 25% according to the latest barometer of French crowdfunding carried out by Mazars and the professional association Financement Participatif France (FPF).

Succeeding in such a financing operation cannot be improvised. Before conquering investors, it is already necessary to seduce crowdfunding platforms, these intermediaries who select and present projects to investors. FPF lists nearly 70 of them in France. Sometimes generalist, sometimes specialized in a field or in a territory, offering donations-presales, royalties, bonds or even actions, each platform has its own positioning and operating mode.

Choose and seduce a platform

Mathilde Iclanzan directs Wiseed. A total of 20 million euros of collection passed through this Toulouse crowdfunding platform last year. It carries out 25% of its activity with SMEs, the rest being provided by real estate crowdfunding. With a bias: “We address SMEs with strong innovation, in the field of health or energy transition for example”. According to the leader, there is a real renewed interest in “projects with strong innovation, carrying meaning and values”. Privileged target of the Occitan platform: a company which already has a proof of concept, proven technology, initial turnover and which is beginning to structure itself. It is also a way of reassuring potential investors. Since in the event of a proposal for bonds (or debt securities), it is obviously necessary to be able to repay.

At Wiseed, each project is carefully studied: financial structure and legal structure are analyzed, as are the products, the market and the prospects for growth and development. In addition, “for the selection of SMEs, we ensure the structuring of the management team by ensuring the complementarity of the profiles, we study the quality of the financial information or the ability to steer the company and the agility of leaders. The path of a business leader is difficult, it is important to ensure the ability to react in turbulent areas and to be lucid in all situations”, deciphers Mathilde Iclanzan. A platform like Wiseed has every interest in carefully selecting SMEs, its remuneration depending on the success or otherwise of the collections, between 5 to 8% of the amount mobilized.

This selection process can take time. Clément Francomme, founder of Utocat, a Lille company that publishes software to simplify the use of PEA-PME for banks, has just closed a second crowdfunding campaign. After Wiseed, the manager this time approached the Bordeaux platform Tudigo to open up his capital. Convinced that this new method of financing is “a welcome and resilient diversification” in the world of finance, he nevertheless warns about the time it takes to put together files. “In the case of actions, the administrative part can be long, from 4 to 9 months, with a lot of negotiations”, he warns.

Convince investors

It remains to give the starting signal for the crowdfunding campaign itself. The company may have the best product or the best project ever, but business will not go as well without good marketing. Because to convince individual investors, it remains necessary to “sell” them your proposal. Presentation of the company and the leaders, market study, business plan will be transmitted. “Play transparency, even if it means exposing yourself a little”, recommends the leader of Wiseed for whom “we must not hide the risks but expose them”. Because each investor becomes an analyst and it is he alone, independently, who makes the decision to invest. Often, forums also allow discussion with project leaders. An open question and answer game that everyone can consult for information. “During our live where nearly 400 people were connected, we answered about fifty questions”, remembers Guillaume le Grand. The opportunity to explain and defend its project, its innovative character, its economic model, its values.

We must not forget that investors seek to place their savings, but also to invest in the real economy, in a project that makes sense to them, because it is located on their territory or defends such and such values. Hence the importance for the company to take care of its extra-financial indicators, known as ESG (environmental, social and governance) when presenting its offer.

Federate a community

In addition to raising funds, running a crowdfunding campaign has other virtues. “In addition to providing visibility to publicize a company or a product, it also often generates great stories: investors are your first sponsors and supporters, especially when you are going through a moment of crisis. When you invest in a company is that you want to believe in it! Being well surrounded is a strength”, thinks Mathilde Iclanzan. Clément Francomme also believes in the power of this community of investors to federate around Utocat. By closing in March its new fundraising of nearly 530,000 euros from 200 investors, it plans to accelerate the deployment of its solution internationally, particularly in Belgium and Luxembourg. Each of its new partners becoming prescribers, in a conversion strategy.