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PlanSnap is an app that makes social planning simple. It helps people to agree a plan in just a few taps. It even works if some of the invitees aren’t using the app.
Founder and CEO Louise Doherty initially bootstrapped the business, using her own money and investment from an early client. She subsequently secured a combination of angel and accelerator funding.
When it came to developing her product towards full launch, she opted to crowdfund.
The right audience
The main reason for her choice of funding strategy was demographics. PlanSnap’s target market is primarily women – market research had showed Louise that women do more social planning. And crowdfunding communities include more women than traditional investment networks.
“The chance to market the business to a large audience with a healthy female representation was very attractive,” says Louise.
In addition, crowdfunding is viable even without a large customer base, which PlanSnap didn’t yet have at that time.
Time, effort and energy
Having decided to go the crowdfunding route, the hard work began.
“Crowdfunding is as time-consuming as any other funding type,” Louise warns.
“There’s far more to it than posting a video and business plan online, and waiting for the money to come in.”
Louise ran her crowdfunding campaign on Crowdcube. The process involved:
- Preparing the accounts and necessary legal documents
- Setting out the company’s strategy
- Creating three key assets for the campaign: a promotional video, business planand financial statement
- Keeping the PlanSnap forum and blog on the Crowdcube site regularly updated with new and engaging content
- Attending tech, start-up and Crowdcube events to drive interest in PlanSnap’s crowdfunding campaign
- Closing the round: communicating with investors, collecting payments and finalising the articles of association
“You need to put a huge amount of effort into the video, which needs to be really compelling; and the business plan, which requires careful thought,” Louise points out.
“And you need to spend a lot of time and energy going to events, meeting potential investors, and maintaining the relationships you forge.”
She says the Business Growth Programme was a great help; not just introducing her to potential investors, but running practice sessions to hone her pitch.
All that effort proved worthwhile. Against a target of £250,000, PlanSnap raised almost £380,000. Around 520 investors took just over 11 per cent of the firm’s equity.
Ahead of a full launch later this year, Louise is now investing money in improving the app, and making it more widely available. This has meant taking on a new premises, and hiring more development talent.
A crowdfunding campaign concentrates the mind, for two reasons according to Louise. It’s very public compared to other sources of finance; and it comes with a deadline.
“That makes you really think through how you’re going to communicate your business vision and goals,” she explains. “And it helps you keep focused on the people whose interest is genuine – those you believe will actually invest.”
But be mindful of the risks, she cautions. “If you don’t hit the target, you walk away with nothing. So prepare well – and make sure you have a back-up plan, just in case.”
Our Routes to Finance event looks at the various funding mechanisms available for London’s SMEs – from start-ups looking to raise via angel investors, crowdfunding and alternative finance to larger scale-ups looking to take equity investment from VCs.
Join us to learn more about navigating the funding journey, with expert commentary from figures from across London’s finance ecosystem as well as from growing start-ups and scale-ups who have successfully accessed finance.
Date: Monday 29th January 2018
Venue: London & Partners, 6th Floor, 2 More London Riverside
Join us at 11:30 to learn about Finance for Start-Ups, join us at 13:30 to learn about Finance for Scale-Ups, or join us for the full event.
Download this report, which outlines everything you need to know about business finance for start-ups, draws on the expertise of the mentors from London & Partners’ VC Club and its Business Growth Programme, who help London’s early-stage businesses unlock their potential and overcome growth barriers.
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