Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Raising Capital in a Pandemic World
Medium | Victoria Bennett | March 18, 2020
This week has seen considerable changes in the world, from markets falling, oil prices falling, schools closed, borders closed. We’re moving into a new world order, and this isn’t for a week or two. How can your business stay healthy and grow?
Your company needs to prepare for this new world order. Firstly, look at spending and consider how you can reduce your burn rate? Look at your revenues. What will this ever-changing world do to your revenues? If some taps are turned off, how can you reposition your company to access new revenue streams? Government stimulus funding may help you to access the new revenue streams or pivot.
It’s not all doom and gloom. The 2008–2009 recession founded Uber, AirBnB and Slack, disruptive businesses that took the opportunities in the market. Other companies grew through acquisition and benefited from cheaper assets.
How can you raise the capital to grow and grab the opportunities that the changes with coronavirus bring?
Most outside money, such as Angel Investors or VCs, requires kissing many frogs. You have to meet a large number of people, typically face to face, to build understanding, trust and secure funding.
Last week our company was due to host three investor events. The first one on Tuesday, had over fifty people in Vancouver, the second on Wednesday twenty in Calgary. Then the third back in Vancouver had to be cancelled as the venue went on COVID-19 lockdown. With Social Distancing measures, traditional fundraising needs to be turned on its head.
See: Funding in the Time of Coronavirus
Crowdfunding may be the solution to raise capital from a large number of investors across the whole country without meeting them face to face. The whole process takes place online, from reviewing the offering documents, signing and paying. It can all take place without any face to face interaction. That provides social distance for the investor, the company’s employees and lawyers.
Crowdfunding works best where you can tell a story because people like to back what they believe in, and that is certainly the case for retail investors. For larger investors, they are often looking for deal flow. A crowdfunding platform can provide both. The video gives you a chance to see the team, and to understand their why? The “why” is vital because that motivates companies through the bad times as well as the good.
It is important to tell your story and make it relevant to the current reality, but you need to be authentic too. Next week we are launching an equity crowdfunding campaign for a pain-free needle. The device is pre-dosed and has an enclosed sharp; therefore, it doesn’t require sharps disposal. In the not too distant future, there will be a need to vaccinate a large global population quickly, without fear of pain, or mis-dosing or sharps disposal in developing countries, and at a similar price to a syringe and vial of the drug. PKA SoftTouch, who developed the device, has a story that is natural and resonates in the current landscape.
Breaking through the noise
It is noisy out there; social media feeds are full of COVID-19 advice and emails acknowledging that every company you have ever dealt with has a COVID-19 policy. This too will pass. Advertising spend is already decreasing. With potential drops in revenue, this does make sense, but the companies that responded best after 2008 were the companies that remained in the market and continued to tell their stories. If you are crowdfunding, it will be easier to get your story out, as you will be competing with fewer companies and lower overall marketing spend.
See: Getting In Early: SEC Sees Growth In Equity Crowdfunding
We are social creatures; working from home, we may look to other ways to stay connected. Business channels such as Slack, LinkedIn and Zoom and social channels such as Instagram and Facebook will be our source of connection. These are the main outreach channels for crowdfunding. The increase in working from home means potential investors could have more time without the daily commute and be online more, as well.
A webinar will replace the events cancelled on Thursday and this Tuesday. Potential investors have the opportunity to ask questions and gain trust and understanding so that they can move forward to invest. A face to face launch event scheduled the following week will be live-streamed. This will allow a small group from the company to be present and the larger group of interested investors to meet the team and hear the key information.
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The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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