If you have a vegan business, you have found your tribe

Hello and welcome to episode twenty-four of The Vegan Business Tribe Podcast with myself David Pannell, co-founder of Vegan Business Tribe.  If you have a vegan business, or are thinking of starting one, then Vegan Business Tribe is here to support and inspire you not just to build a vegan business, but to build a SUCCESSFUL vegan business.

 

And if you want to go beyond the podcast then head over to Vegan Business Tribe .com which is where you can hook up with not just myself and Lisa, but with our community of like-minded vegan entrepreneurs.  And if you join our paid monthly membership, you can also attend all our regular online events, study our vegan marketing course and just get support to build your vegan business from other people who are on the same mission as you are.

 

Today, we’re talking about a topic that is very familiar to vegan businesses especially – and that’s crowdfunding. Now, if you’ve never crowdfunded a business before then it’s really likely that you’ve got a lot of preconceptions of what crowdfunding is.  You’ve probably seen Crowdfunders go viral, companies raising hundreds of thousand of pounds or dollars to release a new gismo, it looks really easy right? 

 

You just put up a crowdfunding page for your idea, everyone thinks it’s amazing and you magically get thousands of pounds rolling in from people you never knew existed. Especially if your idea is VEGAN! If you’re crowdfunding for a vegan business then surely every other vegan will put money in to support you won’t they?  Well, put simply – no.  No, they won’t.  It still amazes me that we think that other people will act completely differently to how we act ourselves. Let me ask you, how many crowdfunding campaigns have you supported in the last twelve months? A couple maybe, or perhaps none at all.  And out of those Crowdfunders, did you JUST support them because they were vegan? Or was it because the crowdfunder was by someone you knew in some way or someone that you already followed?  Do you regularly go and search through the crowdfunding platforms, looking for vegan businesses to back and donate your money to?  No, I doubt you do.  So why would you assume that anyone else does?

 

If you’re listening to this now, and you have a new business or even just a great idea, and you’re thinking that you just need twenty grand so you’ll crowdfund it and the donations will come rolling in – then I’m here to burst your bubble.  A report from The Crowdfunding Centre in 2015 concluded that up to 89% of crowdfunding campaigns fail to reach their target. The industry average, looking across all crowdfunding platforms, is less than 25% of crowdfunding campaigns are successful.  10% of campaigns don’t receive a single pledge.

 

And the reason that the majority of crowdfunders DON’T hit their target, is not because they didn’t have a great idea – I meet people with amazing ideas every day for vegan businesses who can’t get any funding – but they don’t hit their targets because of lack of audience. And there is no way of getting away from this.  If you plan to run a crowdfunding campaign, then you, and you alone, are going to be responsible for getting every single person to your crowdfunding page.  Patrik Baboumian, one of the stars of the Nexflix documentary Gamechangers, recently fundraised to launch a new vegan superhero graphic novel called Earthraiser.  Patrik is a former Germany’s Strongest Man, he’s a passionate environmental activist and documentary star, he has been the face of PETA campaigns, he’s a world-record-holding weightlifter – he has 80 thousand Facebook followers, 100 thousand Instagram followers – he has a HUGE audience.  And from that audience, he managed to raise 30 thousand Euros to launch the project which is about 26 thousand pounds or 36 thousand US dollars, for his vegan project.  Now, ask yourself what audience do you currently have?

 

If you keep an eye on what we do over at Vegan Business Tribe, you will have seen that we recently partnered up with CrowdfunderUK to take a group of our members through a crowdfunding programme as a supported group. Now, this wasn’t a collective pot – each company was raising their own money, but we ran bootcamps, training sessions and online meetups to support all the members while they were setting up and running their campaigns.  And as part of that, we used CrowdfunderUK’s own magic formula for working out how much money each company was likely to be able to raise.  And the formula is this:

 

On average, one in 20 people who visit your crowdfunding page will back your project.  The average donation is £50.  So if you want to raise £15,000 for your business idea, then that means YOU – not your crowdfunding platform, but YOU – need to get 6,000 people to your crowdfunding page.  No big deal you think, you’ve got thousands of people following you on social, you’ve got an email list of a couple of thousand, so that’s not so much work.  Well, an average ‘click-through’ rate for email marketing, so what percentage of people who receive your email actually click on a link in it, is only about 2%. So you’d need an email list of more than a quarter of a million people to get 6,000 people to your project page.  Even just to raise £3,000 you would need to get around twelve hundred people to your page – and for most small businesses, even that is a big ask.  If you are a brand new company, with no audience at all, then launching straight into a crowdfunder as the first thing you do is going to be incredibly difficult.

 

I’m not trying to put you off the idea of crowdfunding – not at all – but you do need to go into with your eyes wide open of what you can expect. The Vegan Business Tribe members that Lisa and I took through the crowdfunding programme, about a third hit their targets.  And they did in part because they set their goal in line with what they knew their audience size to be.  So do the same sums yourself.  How many people do you realistically think you could drive to your crowdfunding page? Divide that number by 20 (because on average one in 20 will donate) then times that by 50 (because the average donation is £50 – or if you are working in US dollars, it’s about 65-70 dollars) and you’ve got your likely result of what you might be able to raise.

 

Now, the programme we ran with CrowdfunderUK was for ‘rewards-based’ crowdfunding campaigns.  So this is where you give anyone who backs your projects a reward in return for that backing.  If you sell a physical item then that reward might just be your product, or you can get a lot more creative and give away experiences and other goodies.  And this is the kind of crowdfunding that we’re all most familiar with.  It’s simple for businesses to run, it’s fairly simple to set-up, and it’s low-risk for everyone involved.  However, you can also choose to do what’s called ‘equity-based’ crowdfunding.  This is what you will see on platforms such as Seedr or CrowdCube – and in these projects, when you give a donation, you are actually buying a share of the business. And these are the kind of projects that you usually see getting the REALLY high figures.  If you are looking to crowdfund fifty thousand pounds, or a hundred thousand pounds for example, then usually you need to go down the equity route – you will need to give away part of your business to people in return.  It’s hard to get people to put that kind of money in without them wanting a chance to earn money back from that investment.  And this is a whole different territory, that I’m not really going to cover today, because you need to spend time creating pitch decks that you can send to prospective investors ahead of the campaign, you need to have a watertight business plan you can present, and you need to be prepared to run a business that has shareholders, so it will not just be yourself making all the decisions any more. If you think this might be for you though, then head over to The Vegan Business Tribe website and search for an interview that Lisa did with Mike Hill of One Planet Pizza about how he’s taken his company through multiple rounds of funding and attracted investors and everything that is involved.

 

But if you think that you do have the audience to raise some funding through rewards-based crowdfunding, then what we’re going to talk today about is how you can go about doing that.  And it doesn’t need to be a lot of money.  Victoria from Happy Carrot Skincare was one of the companies who smashed her target in our group, and Victoria was only looking to raise one and a half grand to extend her product line.  That fifteen hundred pounds was RIGHT at the limit of what she was able to raise from the audience she had, and it was really a superhuman effort by all involved to get her campaign over the line, but that money will make a huge difference to her businesses.

 

So once you have worked out an idea of what funding target is going to be realistic for you, then there are three things you have to decide before you can launch your campaign. The first is which platform you are going to run your campaign on – and there are a lot of different platforms, each with their own benefits.  The second is what kind of rewards you are going to offer to people who back your business.  And the third is are you going to go for an ‘all or nothing campaign’, where you only get the money if you hit your goal, or a ‘flexible funding’ campaign where your business will receive any money that people have donated to you even if you don’t hit your target.  Now, I want to look at those three things together, because they are all interconnected.  If you decide that you want to run a flexible-funding campaign for example, then only certain platforms, such as CrowdfunderUK and Indiegogo give you that option.  If you’re launching a physical product, especially if it’s a gadget or an art project of some kind that can only happen if you hit your full amount, then Kickstarter might be something you take a look at.  If it’s a more personal campaign to launch money for a cause rather than a business, then you might want to look at something like Go Fund Me. But you should take time looking at the different platforms to find which is a good fit for you and your business.  We chose to partner with CrowdfunderUK – partly because they tend to take a more ethical stance and that’s reflected in the type of projects and businesses they attract, but also because they have a number of vegan team-members who were able to act as a point of contact for our members – and that made a significant difference.

 

But remember, each platform IS a business in its own right.  They earn their money on the back of your crowdfunding by taking a percentage of the money you raise, but most are very transparent about their costs.  So spend some time reading through their guides, watch their videos and read their documentation to see which is a good fit for you.  Once you’ve got your platform, you then need to decide what kind of rewards you are going to give and what kind of campaign you are going to run. This decision needs to be made hand in hand, because if you run a flexible campaign – so you get all the money donated regardless of if you hit your target – but you offer a reward that can only become a reality if you hit that target, then you can end up in a difficult position.  So, if you are crowdfunding to create a new product and are offering that finished product as a reward – then you need to have actually made enough money through your campaign to make the product in the first place to be able to give it to people!  And that’s why platforms such as Kickstarter only offer ‘all or nothing’ crowdfunding. Usually on Kickstarter, companies are really just taking pre-orders to fund the development of a product.  So if they don’t raise the money needed to create that product, then they can’t deliver on those pre-orders so everyone gets their money automatically refunded. 

 

But you don’t need to just offer your product as a reward.  In fact, on some platforms, you don’t need to offer a reward at all.  But people are three times as likely to back a project if they get some kind of reward in return and to be honest, offering rewards is a huge opportunity. Because some of the best crowdfunding campaigns I’ve seen used their rewards to set up some great collaborations.  So alongside offering your own product as a reward, can you add in other people’s too.  Perhaps a company won’t give you some money for your crowdfunding campaign, but will they donate a reward instead?  A box of vegan chocolate bars, some ethical clothing or beanie hats, a voucher for their online shop – and in return you’ll make sure to mention them whenever you shout about your campaign.  And having this kind of collaboration on your rewards also gives you potential access to THEIR audience as well, because if they are happy to donate a reward they will likely also be happy to tell their own audience they have done it.  And if they are a vegan company themselves, and you are on a similar vegan mission, they are more likely to help you out – especially if helping DOESN’T involve money changing hands!

 

You can also get really creative with the rewards you can offer, and if you can’t offer a physical product in return, can you offer some kind of legacy?  Maybe you’ll include your backer’s name on the title page of your new book, or maybe have their name painted on the wall in your cafe?  Pull your support team together and have a brainstorm.  Happy Carrot Skincare offered a 1-2-1 Zoom workshop with their founder Victoria to learn how to make your own plant-based skincare products as their top reward.  You can use your rewards, not as an afterthought, but as something people would really love to have. Spend some time coming up with some crazy ideas for rewards which you can then distil down into some, actually, really cool stuff.

 

Then the last decision you have to make before you can get started is: do you go for an ‘all or nothing’ campaign, where if you don’t hit your target you don’t get a penny, or a ‘flexible funding’ campaign where you will receive any donation that is made, regardless of if you hit your target or not.  And, I know, it sounds like a no-brainer doesn’t it?  Why would you risk the chance of losing it all just because you miss your target by a few quid? Well, I’ve seen first hand what a difference having that definitive cut-off point can do for a fundraising campaign.  Quite simply, if people know that you don’t get a penny if you don’t hit your target, they can really rally around you to make sure you do. If on the other hand, people see you’re only 60% of the way to your target, but know that you will still get the money anyway, there’s no real impetus or motivation to help get you over the line.  And that’s something we saw with the companies on our crowdfunding programme – those that were running all or nothing campaigns saw a real focus in the last few days from people wanting to get them across the line – with people seemingly coming out of the woodwork hours before the deadline with last-minute donations. These were people who had been getting the emails and seeing all the social media posts from day one, but only came out and donated at, literally, the eleventh hour to help get the campaign over the line.  Whereas other campaigns on flexible funding didn’t really see that same intensity of activity.  Being on ‘all or nothing’ also means that YOU are more motivated to hit the goal.  If you’re only a few hundred pounds away with a day left, then boy, you are going to move heaven and earth to get over that line instead of just settling for what you’ve already got.  What I will say though, is almost everyone on our VBT crowdfunding programme seemed to instantly regret which option they had chosen for their campaign once they had gone live – those on flexible funding were thinking maybe they would have got more donations on all or nothing, and in return, those on all or nothing were worried that they were not going to hit their target and would lose the money that had been donated in the first few days!  So once you launch, stand by your decision.  Don’t regret it: make it work for you.

 

Now, remember, this is all work you will need to do before you even launch your campaign.  And from experience, and from talking to people who have run successful campaigns, I can not understate how important the work you do before you launch a crowdfunding campaign is.  If you can find someone who has successfully crowdfunded themselves, really tap their brains about what they did in the run up because you will learn so much.  You need to spend time working out a plan for how you are going to reach a wide audience BEFORE you launch, and a big part of that is crafting your story.  You will have heard me say many times before that your company JUST being vegan isn’t enough. Being a vegan business is not a unique selling point any more, it’s not enough to make your story newsworthy and sharable.  People want to give to make something amazing happen.  You’re going to set up a company selling vegan donuts?  Amazing, and if you are please send me some to try out, but that isn’t news any more.  You can get vegan donuts at Krispy Kreme.  You will need more of a story, something far more remarkable for your crowdfunded to get shared and featured. And in many ways, the process of running a crowdfunder can identify reasons why a business is struggling. If you can’t get your local paper to pick up your crowdfunder, or you’re not getting people sharing it on social media, then you haven’t got a truly remarkable business or idea yet that people care about.  Maybe you’re struggling to reach a big enough audience to hit what is actually quite a small crowdfunding goal, then that’s probably why your general sales haven’t been doing that well either: your company needs to focus on building a bigger audience in general.  You will learn so much about your own business from having to go out there and ask people for money to fund it, perhaps more than you ever will from just trying to make sales.

 

And once you have that story, once you have worked out what makes you REALLY stand out, the thing that makes you REMARKABLE that people really care about, you then need to be able to get that story across on a single crowdfunding page.  Most of the crowdfunding platforms will have guides and will help you to create your page – CrowdfunderUK have got a whole learning platform dedicated to it – but it will take you a lot of time to pull your page together, so make sure you factor that in. This is your main selling page, this is where you really need to get your story across, and the best way to do that is to create a video.  Now, I know I know, before you start telling me how much you hate being on camera let me just pull out my little violin and play you a sad song… because NOONE likes being on video.  Don’t think it’s something that is unique to you so it gives you an excuse not to do it.  It’s not.  You might have a bit of budget so you can get something nicely produced, or you might have a friend or family member who has a decent camera and knows how to use editing software – or it might be that it’s just you and your phone.  But being able to actually TELL someone, in your own words, face to face, about your project and the difference their backing will make, is far more powerful than just text and images. Surely the chance of getting the money to fund the next part of your company’s growth isn’t going to be held back just because you are nervous about making a video? Have faith in yourself and your passion for your company and your product.

 

And once you have made it, you can use that video elsewhere to promote your campaign.  You can upload it to Facebook, post it on LinkedIn and link back to your crowdfunding page. You can also get REALLY creative in making a video to promote your campaign.  Even if you don’t have the budget to get someone to do some clever editing, you will be amazed at what kind of video you can produce yourself if you apply a bit of creativity.  Brainstorm some ideas with your team or your friends.  Don’t just sit in your office or living room in front of your phone – go find somewhere visually exciting to make a video, do something fun that will make people smile or connect with you and your mission, plan out a story.  Pull in different people to talk about your product. If it comes down to it, just dress up as a carrot or do something to have some fun!  Make a video that people will share.

 

At this point, you might think that you’re ready to launch your campaign.  You’ve set your amazing rewards, you’ve built your page, you’ve worked out what makes your project SO remarkable that the local paper will write about it and you’ve even, maybe begrudgingly, made a video to promote it.  And this is the point people get to and hit launch, but it’s also the point they make their biggest mistake. Because before you go live with your crowdfunding campaign, you need to have people already lined up to donate to it as soon as it goes live.  This is where you need to have tapped-up your closest family and friends, or got pledges from people you know will support you.  You NEED to make sure that your campaign will get early activity straight off the blocks, and that needs to be activity that you have already drummed up before going live.  Because human behaviour is fickle.  No matter how much of an individual we think ourselves to be, we still follow the crowd. And we are more likely to give to a crowdfunding project if we can see other people are giving too.  So before you hit the go-live button, make sure that your closest contacts are ready to give their donations as soon as you go live.  Have an email set up ready to go just to the people who have already made a commitment to help you out with the launch, have a WhatsApp group or everyone’s mobile number so they know to jump on and make a donation and explain how much the campaign needs them to do this to be successful.  If you were doing the kind of equity-based crowdfunder that I mentioned earlier instead of a rewards-based campaign, then you would be expected to go live with up to 50% of the total already pledged. So aiming to get that 20 or 30% coming in during the first hours or day of your campaign before you start promoting means that people will see the momentum and be far more likely to jump on the bandwagon to help you too.  The worst thing you can do is start promoting your crowdfunding campaign when it’s only at a couple of per cent or, even worse, still at zero.  Again, it’s our ridiculous human nature, it’s almost like someone is placing a bet, and if they see that no-one else is giving, they will hold back giving too.  If they see it looks like it’s going to be successful, they will be far more likely to join in.

 

And if you’re struggling to get those early commitments from your closest contacts, then maybe it’s worth just pausing and looking at your campaign again. If you can’t get those closest to you to jump on at the start, then how are you ever going to get others to give?  It can be a really good test to send a preview of your campaign page, your video and details of your rewards and seeing if you can get enough early promises to get your campaign flying right from the start.  If not, talk to people and get their feedback of what needs to change.

 

And then, well – you’re good to go and the money just rolls in.  We’ll, it will do for the first couple of days.  Because this is the cruel reality of crowdfunding.  You’ve put all this hard work in, you’ve got your closest contacts to agree to donate up-front, you get some early donations… and then everything just stops. You are checking the page every few hours and less and less is coming in until it grinds to a halt. You go days, weeks without anyone giving anything.  This happened to every single one of the members in our group and it will probably happen to you too. And it genuinely is cruel, because it’s like the crowdfunding valley of disillusion.  You will start to question yourself, you will start to question your business, you will think your campaign is dead, you will be tempted to pull it – you may even have a full existential crisis.  But – no matter how long your campaign runs for, it is a fact that nearly all the donations come in the first week and the last few days.  And the busier you can get in the time in between, the more donations you will be setting up to come in those last, panicked few days of your campaign. Because, as much as people might want to help, we all live busy lives and have so much vying for our attention.  So you need to use this time to get your campaign in front of as many people as you can – as many TIMES as you can.  You need solid consistency throughout your campaign, even when the donations are not coming in and you are thinking about giving up.

 

Start from the centre and work your way out – so what do I mean by that?  Well, start with the people who already know you first.  Your friends, your family, your current contacts, your customers, your professional contacts.  This is likely where the majority of your backers will come from when you are doing rewards-based crowdfunding, the people you already know or the people who are already familiar with your company. Think about all the contacts you already have in life.  How many Facebook friends do you have?  All those WhatsApp groups you are in with your friends. Your extended family. All those contacts in your phone.  And what percentage of those people actually know you have your own business?  I suspect, only a small per cent.  How many contacts do you have on LinkedIn, and how many people have bought from your company over the last twelve months?  These are all the people most likely to back your campaign because they already have a connection – so make it your mission to contact each and every one of them to tell them about your campaign.  If you have lots of contacts, you might have to do this by using MailChimp to send them campaign updates, others you should reach out to personally. Going live on Facebook and Instagram are great ways to bring something to the attention of your friends, but remember that every time you do it you’re only hitting a small percentage of your contacts at a time. 

 

Keep communicating throughout your campaign.  And there’s only so many times you can just ask someone to give you money without it getting awkward, so plan out what you are going to talk about over the duration of your crowdfunding campaign. Pick out a different reward to talk about in each email or Facebook live session, and if you’ve collaborated with another company on your rewards, invite them to do a Facebook Live with you! You may feel as though you are talking to no one. You may feel you are hitting your head against a brick wall because no one is giving any more donations, but as I said, this is because everyone is watching, but they haven’t yet been pushed into taking action.

 

Laura Chepner from Primary Veducation was another member who was on our Crowdfunding programme to launch her new CPD accredited course for teachers to learn how to be more inclusive for vegan children. She did everything we’ve just been talking about: at one point she was doing Facebook Live TWICE A DAY knowing that she’d hit different people at different times.  And she went from 60% funded to 105% funded in the last four days of her month-long campaign.  And she told me she thought she was talking to no one, she nearly gave up on the whole thing.  But all that work meant that when the crunch of the deadline came, and she gave people that one last chance to get involved, they did.  You will feel like you are pestering, well, just you keep pestering.

 

And you don’t just have to rely on email and social – again, looking at the statistics we know that the majority of backers come from these two channels, but you can go beyond digital to promote your campaign. Get creative, pull in your team and your friends and brainstorm how you are going to get your crowdfunding message out. Write letters to your neighbours – either your neighbours at home or neighbouring businesses – and ask for their support. I remember that Lisa and I lived in an apartment block and a girl who was crowdfunding set up a desk in the lobby so she could grab her fellow neighbours as they were coming home from work to ask if they would support her.  And I have to admit, I did.

 

Do the things that will put you out of your comfort zone.  Approach your local businesses, reach out to your local newspaper or radio station, especially if you have a strong local angle.  If you have an amazing story, get in contact with the big vegan news channels.  We managed to get our member who were on our group programme featured in Vegconomist, Vegan Food & Living, and lot of other publications because we were helping a group of grass-roots vegan businesses run simultaneous crowdfunders – THAT was news in itself and a lot of them got namechecked in the articles.

 

And that leads me to the final point I want to make.  Regardless of if you hit your target when you are crowdfunding, every email you send out to people telling them about your campaign, every reach-out you do to your local paper, every Facebook Live you do, every Instagram story, every talk you give to promote your campaign – is something you probably wouldn’t have done otherwise that is promoting your business.  Every email you send out about your Crowdfunder project is an email you wouldn’t have normally sent out.  Each post you do on social media is giving you a reason to shout about your company when you might not have otherwise.  Every call you are making to your local paper to see if they will cover your story is probably pushing you out of your comfort zone to do something that you wouldn’t have otherwise done.  And this is the feedback I’ve got from businesses who have gone through crowdfunding projects regardless of if they got any money or not – the exposure they got from doing the project was just as important. In some cases, I know companies who didn’t come away with any money but they have said the exposure they got and the new contacts they made by shouting about the project ended up being worth more, in the long run, than the money they would have raised.

 

Exposure and visibility is the lifeblood of your business. Running a crowdfunding campaign but not hitting your target should NEVER be viewed as a failure, not one bit. It’s learning – and sometimes the only way to learn is to do.  Crowdfunding is NOT a one shot at success.  Many companies do multiple crowdfunders over the life of their business, and it might be that the first time you do one teaches you invaluable lessons that put you on the right track to repeat the exercise 6 or 12 months later – having first built up a bigger audience or having created a better story.  And if you can, build up a support group to help you with your campaign.  Bring in your friends to be your campaign managers and help you post.  Find other vegan businesses that have run crowdfunders, or link up with other companies to go through crowdfunding at the same time together so you can support and motivate each other through that valley of crowdfunding disillusionment.  The online meet-ups we ran for our Vegan Business Tribe members, and the group we set up on the Slack app for people to support each other, played a huge part for those members who hit their targets.  And I suspect we’ll run the programme again in the future, so if you want to be on the list drop me an email.

 

OK, so as always, we’ve been through a lot of information in this one, and to be honest, I could have made this session twice as long.  But let’s have a quick bullet-point round-up of what we’ve just learnt:

 

 

And that about wraps it up, now I know this has been quite a long session but it’s still only been a whistle-stop tour of rewards-based crowdfunding. If you want to know more then connect with Lisa and I over on the Vegan Business Tribe website, go watch the videos with our members who ran successful campaigns and take a look at the campaign they ran.  And if you’re thinking of running a crowdfunding campaign yourself for your vegan business, and I’ve not managed to put you off yet, then make sure to drop us an email.

 

So that’s it for this one.  As always I really appreciate you giving me your time to listen.  A couple of last favours before I let you go – if you haven’t already, please subscribe to this podcast which really helps our ratings, but also, if your platform allows it please consider giving us a 5-star review so others know this is a podcast worth listening to.  Also, if you are looking to be part of a wider vegan business community, then no matter where you are in the world or what stage your business is at – you might have been trading for years or you might just have an idea at the moment, then please take a look at our monthly membership on the Vegan Business Tribe website – this is where you can link up with all our other members, take our vegan marketing course, join our online events and just be part of one of the most amazing businesses communities you will ever meet.  Just head over to Vegan Business Tribe .com and go to the sign-up page. We’ve got some big plans for this next year and I would love to see you there to be part of them.

 

So, thank you so much for your time, if you are planning a crowdfunder then may I wish you all the luck in the world with it, and I will see you on the next one.