While most Kiwis were at the bach over the holidays, Team PledgeMe were hard at work adding new features to the platform, inventing new products, and searching for a new board member.
But the newest of the shiny new things we’re unveiling is the ability to run private campaigns on PledgeMe.Equity.
PledgeMe.Equity/Private means companies can go out to their crowd, and their crowd only, to secure investment. Companies can raise money through their personal and professional networks and customers, having a bit more control over who sees their information while still going through the PledgeMe process.
I’ve put together a brief FAQ to fill y’all in on what we mean by “private” campaigns.
Q: Why private campaigns? I thought PledgeMe is all about transparency!
A: We are. But we’re also about actively listening to our crowd! They spoke, we listened. We heard from the hundreds of companies we’ve talked to that some would like the ability to do a private round.
The two main reasons people told us they wanted to run a private campaign were:
1. running a friends and family round or an initial investment round (this will be especially helpful for very early stage start ups), and
2. raise through their crowd of customers without showing the world what they’re up to just yet.
Friends and family
Going out to friends and family can be difficult for many entrepreneurs. We’ve had feedback from a few startups who are very interested in using PledgeMe.Equity so potential investors can read, digest and make an informed investment decision in their own time (rather than over Sunday dinner at Aunt Edna’s place).
A private PledgeMe.Equity campaign would provide a structure and a system so both parties are best informed of the potential returns and risks. This is useful for entrepreneurs and interested investors alike.
Not ready to show the world our business
A few companies who PledgeMe has been working with are doing some pretty incredible things but they aren’t quite ready to tell the world (or the National Business Review). In most cases these are high growth companies or businesses with close competition around the same stage in the market.
Private PledgeMe.Equity campaigns will mean these companies — who have stress tested their idea, got a crowd of people ready to invest and who have a clear plan — can push go without any of the public/media focus that comes with a public campaign.
Q: What’s the real difference between public and private?
In terms of readying your company for accepting investment: nothing.
Regardless of running a public or a private campaign, a company is going to need to follow the same process to putting forward an offer on our platform. The only difference is that instead of the offer being visible to anyone on pledgeme.co.nz, it will only go out to those you choose to share it with.
One potential difference for a private campaign is that some of the costs around getting your campaign ready may be reduced or eliminated (compared to public campaigns). Things like pitch videos cost money and, depending on the private campaign, may not be necessary.
Q: What’s the advantage over using PledgeMe versus doing it myself?
PledgeMe charges a 5% success fee on the total raised for all campaigns which reach their funding goals. This cost isn’t for everyone and we know how important cash is for early stage companies. However, there are a few key reasons companies come to us and see value in our service:
• Company Hygiene. In order for any company to use our platform they have to provide a full list of documentation around the investment (which may not be on hand at Aunt Edna’s dinner table). So the process itself is transparent. Companies have to put together a proper business plan, constitution, financials and valuation with assumptions so investors can assess the potential risks and returns.
• Taking the personal pressure off asking people close to you. Allowing people to make a decision on their own, but with a clear deadline, is really the best thing for both parties. It means investors don’t rush into something, and it means companies can concentrate on their crowd as a whole, rather than a few people at a time.
• A strong foundation for growth. Since you’ve dotted your i’s and crossed your t’s the first time around you will carry this knowledge and experience forward for any additional rounds you may do — and your company is already structured to allow for this growth so your eyes can remain on the prize.
When is this going live?
It’s live now! Come have a chat with me if your company want to talk (privately) about this.
Flick me an email here or schedule a meeting directly into my calendar.
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