Latest / Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast) / How to run a successful equity crowdfunding campaign with Mamamade’s founder, Sophie Baron (Part 1)

Transcript

How to run a successful equity crowdfunding campaign with Mamamade’s founder, Sophie Baron (Part 1) · Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast)

0:00
This is Sophie Barron for Female Startup Club.
0:12
Hello and welcome back to the show. It's Dune here, your host and hype girl. If you're new to the show, every week we interview some of the world's most successful founders and entrepreneurs who happen to be women, like Sophie, the founder of Mama Made. But today's episode is a little different to usual because it's actually our follow-up episode.
0:37
Sophie was first on Female Startup Club back in 2020 to share her launch story with us. And I highly recommend going back to check out that episode before you jump into today to hear those early stages of her story and building her business.
0:53
In today's episode, we're talking through how she's built the business since then, as well as going into a deep dive into equity crowdfunding, specifically around what it means, how it can help you in business and the pros and cons that come with it.
1:09
Sophie shares the difference between her first equity crowdfunding campaign that was a mega success and the second, which not so much. And before we get into it, and while I've got you here, if you're a founder or you're just getting started on putting together your ideas to launch a business, something I've come across that's a problem for every founder at every stage is capital.
1:34
Every entrepreneur or future founder that I speak to, myself included, struggles with the money piece. We all need more money, right? So we've put together a comprehensive list of every grant and accelerator that's live right now, and we'll be keeping it updated weekly so you can always be in the loop to access more capital. To get the doc for free, go to femalestartupclub.com forward slash grants to get your copy.
2:03
Okay, let's get into today's episode. This is Sophie for Female Startup Club. Sophie, hi, welcome back to the Female Startup Club podcast. Thank you. It's really nice to be back. Oh my God, I love this. I'm so excited to be doing like part twos to see where, you know, all the founders that I've spoken to are at in the journey now. And you're the first one that I'm doing this with. So I'm very excited. Yeah.
2:29
Honestly, I feel like we were both maybe getting started like around the same time. So it's just nice also to check back in with you and to see, yeah, everything's happened with Female Startup Club since we last spoke. Yeah, the feeling's very mutual. That's so true because when we spoke, I think it was around October 2020, which for me, I was kind of...
2:48
Maybe six months ish into taking the podcast seriously, but I was still very new and very basic with my skills. And you had launched in 2019, I think, from memory. So you were kind of just a year and a bit into the business.
3:04
Yeah, exactly. And now actually, I sort of consider that period as like the beta. And then the kind of like relaunch being around, I guess, around the time that we would have spoken. So yeah, yeah, it's just funny how like, everything feels like a bit transformed since we last spoke.
3:19
Yeah, I love that for us. I'm so excited. I actually think I was looking at your timeline and you launched the rebrand around Christmas 2020. So I feel like we have a lot to discuss since 2020. So I don't want to dive too much into the...
3:35
the early stages of that first year in business, especially because we have that already recorded. Everyone can go back and listen to Sophie's part one. But I'd love to kind of set the scene for Christmas 2020 with the rebrand up until today, if we're kind of talking about the highs and the lows that get you to where you are now and kind of that, you know, painting the picture for what the business is today.
3:59
Oh my gosh. Christmas 2020 was wild. I actually, I don't know if I gave birth the same exact time that we relaunched the brand and the website. So like it was literally all coincided. Oh my God. I remember now you were fully pregnant when we were talking. Yeah.
4:16
I was fully pregnant. I thought I'd have a baby before the relaunch, but yeah, he had other ideas. He was a full two weeks late. It coincided with like a website migration. There's literally pictures of like my husband on his computer in the hospital, like trying, you know, doing like copy paste on this like spreadsheet, trying to get the migration done.
4:36
So yeah, it was crazy. But we basically came up with a whole new look and feel for the brand, a brand new website around Christmas 2020. And that was kind of the launch of Mama Made as you see it now. Love the new brand, by the way. Yeah. Oh, thank you. I love it too. It was a lot more sort of...
4:53
It almost looked like a beauty brown before. Like it was very like black and white, more text focused. We made it a lot more playful, a lot more approachable, tried to inject some more warmth to it, just made it fun. And you do a really great job at like the tone. Like even like I was looking at one of your boxes that says like, we made it and then mama made. And then things like there was something on your website that,
5:18
Oh, damn, I forget what it was, but it was something, something, something baby. And I was like, yeah, like I love that. Like kind of cheeky, but not too cheeky. Just like the right amount of fun and joy and cheek.
5:31
Yeah, I guess I just felt like so much of baby and parenting brands was just twee or like a bit weird or just kind of ignored the fact that you're still an adult. So, yeah, I definitely wanted to keep that level of like sophistication, but also just fun to the brand. Like it's not that serious. It's just baby food.
5:50
Yeah, not glad that comes across because that like that sort of stuff when it comes to brand is just so important to me. And I know it is in a way sort of what is setting us apart more than anything else. So, yeah, I feel very sort of protective over those elements. Yeah, absolutely. OK, so you're in hospital, you're doing the website migration. There's a brand relaunch. How does it go? Yeah.
6:15
It was wild. I mean, it's still wild. I still feel like I haven't quite come down from that. It's just felt very whirlwind since we launched the brand again. I think everything we wanted for the brand, it feels like has come across in the sense of how it's been resonating with people and how excited people get around the packaging and the website and what we stand for. And that's why I do say that was the launch and then anything before that was beta because
6:42
It's just been incredible to see how much that's impacted our growth as a brand. And I think at the time we had maybe an audience of like, I don't know, 10,000, 20,000 people. And now it's sort of four, five times that number or not more even. I can't do math. It's like 80,000. I don't know what that is. So, yeah, it's just been kind of crazy just to see on that level how much it's grown.
7:05
And just how much people are resonating with it. And when we get the feedback about how much we're helping people and supporting people and like, oh, you know, I used youth my first and now I'm using youth my second. And it's just, it's been incredible to see that over two years, the kind of how we're still helping families. So yeah, I mean, honestly, it's been such a fun journey looking back. You know, what's interesting as well is I find, and I'm guilty of this too, that
7:30
well, I have been guilty of this in the past. When you're starting a new brand, you are like, you know what, I'm going to invest in the branding. I'm going to spend all this money up front. It has to be perfect. You know, I have to have it all, all the things. But actually...
7:45
Doing round one, being like, okay, it is what it is. Like, it's amazing. It's fine. You're happy with it. But knowing that you have maybe a year or two or three years in that rebrand moment coming where you can iterate, figure out what you like, figure out what resonates with customers. And then you go through this big moment, which actually causes...
8:05
buzz. It causes a buzz for you online, which wouldn't necessarily happen if you're doing that from day one. You're able to get your customers and your community rally behind you, get excited, and then kind of like, you know, everyone's growing together, which I think is actually a really special thing versus trying to get it perfect from day one. I think you wouldn't have had the same kind of impact with the brand had you have come out with that from the get-go.
8:32
A hundred percent. And I think you're not ever really done. I mean, at least in a startup, like we're still iterating on the brand or we've still had moments where I'll look at what we put out and I'm like, that is not good. You know, I did not like the way that that the brand was interpreted there. And part of that, you realize like, oh, actually our brand guidelines or our tone of voice wasn't tight enough or as tight as it could have been. So you do a bit more work there. We're coming out now again with new packaging and new boxes because, you know,
8:57
we've reached a kind of new level of needing to reach more people. And actually the brand needs to work that much harder for us. So yeah, I don't think you're ever really done at any part of building a business, but particularly with brand, I think if you can see it exactly as that, as that kind of like conversation between your audience and your community and the product and just constantly, it's okay to kind of constantly tweak because...
9:20
what is it they say? It's like brand is like why you would go on a second date or something. It's like you just need it to, it's that personality that is adapting as the brand is growing. Oh, I love that. Very cool. So after you launched the brand, the rebrand and the new kind of look and feel, what were you doing then to keep growing? Like what was the reason for, you
9:48
I think having that solid brand and that new kind of starting point for the, for what the brand was able to talk about and do. We focused a lot on content, so we were still very much Instagram focused business, but yeah, putting out relatable content, shareable content,
10:04
helpful content um still focus on I think this was when Instagram was still kind to static posts we're just doing a lot of like infographics working with influencers a lot um just trying to get more eyeballs on the brand really and that's still our real like goal every day is to just get more people seeing us but yeah making use of kind of the organic channels and organic
10:35
I also read that for you, one of your kind of big driving factors and a big kind of avenue for success for you was your email marketing campaigns and the flows that you set up and things like that. So I'm wondering if you could tell us a little bit about what changed, like what you were doing before, what you started doing that made that immediate difference and shifted the needle.
10:59
So email is something that we started to really double down on, I would say about a year ago. So like January, 2021, I definitely had a moment. I'm not sure if it was like there was an Instagram outage or just something where it was like, actually, we're not really owning that much of this community because it's sitting on a different platform. And I think a lot of brands have that moment of like, what was happening? What do I actually own that's mine? And your email list.
11:23
is yours. And that data is yours. The people that have given up their email addresses to hear from you. So just feeling like, wow, we could be doing so much more. So we went from just doing like general blanket emails, not, you know, I definitely had thoughts around like what content I wanted to put out there, how we wanted to help people over email to actually having a much firmer strategy around sending the right emails to the right people based on purchasing behaviors, based on if they've opened emails or not.
11:50
getting really granular. And the results were just incredible. We basically doubled our email list in about a year. Our open rate is still, it's come down a tiny bit, but it was about 50% open rate, which is like unheard of and really high click-through rate. So it's just getting, and we had an amazing, I mean, we still have an amazing marketing manager who's just an email with, who set it up. So I'm not going to pretend I had anything to do with it.
12:14
So definitely get the right, get the right people in. But yeah, I think just being able to say, actually like this is data that we own. Like these are people that want to be hearing from us. They don't just happen upon our content. They are reading our content. Emails just, yeah, just seeing how powerful email is.
12:31
especially if you're running a digital brand, like at least a third of your income should be coming from email or revenue. Oh, wow, that's a good metric to know. I didn't know that. So with a third, I think it's between like, yeah, 20 to 30% of your revenue should be coming from your email.
12:45
And where should the rest be split across if that was like a piece of a pie? I think it's about 5% to 10% should be referrals. So that, and then my math can be tested. We definitely do about probably another third is paid. And that's split between ads and Google search. And then we do actually quite a bit from direct. So that's probably just general brand building that leads people to come to you directly or search your brand name.
13:12
But I will definitely double check those metrics. I know email is about a third. There we go. Thanks. And so for you with your emails, like if you were to look at last week, what did you put out that really well for you? Is it like storytelling or is it just, you know, new recipes or what's the kind of content strategy for that beefy newsletter vibe?
13:35
Yeah. So we have a lot happening at once. So we have our welcome flow, which is like anyone who's purchased or anyone who signed up to the email list gets put into this flow based on like if they've purchased or not purchased or if they purchased within a certain period of time. So there's this kind of like logical flow of emails that they might be getting that are just evergreen content that we've put in. So encouraging purchasing behavior or repurchasing behavior or moving to subscription based on how they've done it. And then
14:03
We send out a weekly newsletter on a Thursday night to people who have
14:09
opened an email. So they're, it's, we call it the green list. They have engaged with any email from us in the last 30 days, they will get our weekly newsletter. And then we will also send out occasional. So those, those, sorry, those weekly newsletters are very much sort of content heavy. So they're, the goal of those is to get people clicking and get people clicking through to our site. So we'll link through to blog posts. We'll link through to Instagram posts that we've maybe
14:39
But, yeah, the goal is to have a nice kind of chunky amount of content, but really we're trying to get people back to site. And then we have the occasional commercial email. I think it goes out weekly, but that will go to people who haven't purchased in a while or maybe haven't engaged with an email in a while, trying to, again, bring them back into that green list or back to site. Yeah, very much.
15:01
trying to add value with the content, but also not losing sight of what your email objective is, which is to get people back to your website and buying ultimately. So we do send out like what we call the 3am edit, which is like a 3am newsletter. That's a bit more like things we like to read things. We like a bit more lifestyle content, but there's still always a drive to click through to site.
15:28
Right. Got it. Oh my gosh. That's amazing. And do you use like Klaviyo or what's the platform that you use? Klaviyo is, I mean, we're like the poster children for Klaviyo. We are, it's extremely powerful. Love Klaviyo. Me too. Yeah. Just big fans.
15:47
So I want to talk a little bit more. Well, not talk a little bit more. I want to start talking about the equity crowdfunding. Actually, wait. My question before that is, did you raise in the time period since October 2020 to now? Or had you raised before? Yeah.
16:06
We had raised a small amount in August 2020, mostly from friends and family. Some active angels I raised from my old bosses. But yeah, generally just a very small amount. Like how much? About £250,000. Like a nice size round, don't get me wrong. But yeah.
16:29
Yeah, not like a massive amount of money by some standards. And that really helped us, yeah, refine the brand, refine the product, put up that new website, make some key hires. And then we raised again in November 2021. So, yeah, almost over a year later, we raised again. And we raised, I'm going to lose track, about $1.
16:56
1.2 million that round. So we raised quite a bit more. And that was about 400,000 from angel investors. And then the rest of that we raised on cedars.com, which is an equity crowdfunding platform. Right. Okay. So it was kind of like a combined raise. Did it all go through the platform or did like the 400,000 kind of like into your bank account over here and cedars entered your bank account from over here?
17:22
Yeah, so basically we raised the 400 as like a bridge. So we had raised it as what is called in the UK an advanced subscription agreement. In the States, it's called a safe note. It's basically a convertible. So we raised it a couple of months before November, but then it converted in November. And then the rest of the money we raised
17:42
via CEDAR. So some people did come directly to us, but it was considered to be part of the CEDAR's campaign, if that makes sense, because everyone came in under the same terms. And so I feel like from memory, you had a successful equity crowdfunding campaign and you had a not so successful equity crowdfunding campaign. Which one is this? Yeah.
18:02
This one was this very, very successful one. November 2021 was incredible. It was, yeah, just such an amazing experience raising money from our community, building up our brand, people getting to know us. It was like a balls to the wall marketing campaign for like six weeks. And yeah, it was great.
18:26
Okay. I want to settle in on this area then to get started, and then we can move to what happened next. But first question is like, why did you decide to do an equity crowdfunding campaign? Who told you to do that? What made you excited about doing that? And who should be doing that to paint the picture? Great question. So I think when it comes to raising money in general, it's really important to understand...
18:50
why you're raising money, and then how much you actually need to raise. And then after that, who you want to be raising from. So I knew quite early on that I didn't necessarily have the appetite for a VC funded business. It's a very particular model. VCs need to be, you know, they need to have a business that's going to exit for like,
19:14
500 million just to cover the costs of their other things. And it's a very high, high pressure, high growth business. And I knew that for what we're doing, we can achieve a very nice exit without necessarily needing that. So I was a bit averse to VC. And the other side, being a consumer product and having a community, it felt like a really nice way to
19:37
get people to know the brand, to bring our customers in on the journey as well, and to also use it as a marketing campaign to get people to know about the brand. So I think because we had that product piece as well, yeah, it just felt like a nice way to kind of get the brand out there while also basically allowing our diehard fans to come in on the journey with us.
20:01
And is it similar to like a Kickstarter campaign where you're kind of like, okay, I know that let's say just for like an easy number's sake, I know that the goal is a hundred, no, let's make it smaller. I know that the goal is $10,000 and then anything above that is kind of like amazing. And then you're able to kind of re put the marketing out that you funded the goal, et cetera, et cetera. Are you like going and finding investors who you know will reach that goal? And is it similar like that in terms of that Kickstarter kind of vibe?
20:29
Yeah, yeah, definitely. It's a lot of, yeah, you need to drum up that excitement about it. And so we knew we wanted to go into overfunding relatively quickly, which meant that we came to the campaign. So before the campaign had even launched, we had already raised probably about two thirds, if not more, of the target offline. So we had been working...
20:54
I guess if we launched in November, it was probably all of September, all of October, getting commitments in so that when we pressed go on the campaign, we had already had money, things they put in, which meant,
21:08
We reached our goal. I think that campaign, we reached a goal within 24 hours. And then we continued into overfunding for like 30 days. And that's where kind of like things you really kind of see what the power of it can be. But you kind of need that. It's not like starting from zero. You start from you've already worked really hard behind the scenes.
21:26
So when you're talking about getting those commitments, is that like you emailing me or your best friends or like people in your family and being like, cool, like $1,000 here or there? Or is that you being like, okay, I'm an angel investor meetups and I'm getting $10,000 checks here and there? What does that actually mean to get those commitments?
21:46
So it was a lot more focused on the bigger ticket. So I was looking for, I basically was going out, I think with a minimum of a 25,000 pound investment for direct investors. So people who are coming to us directly and it was, yeah, you're basically running a sales cycle. So you're going to either people that you've asked for an intro to, or you're going cold on LinkedIn and you're explaining a bit about the opportunity. You're creating a bit of
22:10
you know, scarcity, time pressure. I was like kind of playing a bit with like what the allocation was left. I was like, oh, we've only got like 100K left because the rest is for Cedars. I was always a bit vague about that, I guess, to be honest. Because internally, I was also a bit vague about it. But definitely going after the higher tickets.
22:27
and setting that minimum investment. Because anything less than that, they could just go to the platform with once the campaign launched. Although anything that we raised before the campaign launched,
22:40
was basically Cedars was going to charge a fee on anything that came in during the crowdfund. So we were able to, we had to send a list of people who came in before the crowdfund launched. So that wasn't charged any fees on either, which is like another kind of incentive to try to raise quite a bit offline. Oh, okay. So if your goal was like 100,000 and you've raised that offline before the campaign goes live, they'll put that on your kind of marker on the list of Cedars. But...
23:08
you actually aren't paying the fees and that's kind of like going directly into your bank account. Oh, that's interesting. I didn't know that. Is that like across the board like that? Or is that just how it works with Cedars? I know that's how it works with Cedars. I don't know about other platforms. But then anything we brought in direct while the campaign was on, we paid fees on. Yeah, 100%. And so how do you figure out like how much equity of the business you should put up
23:37
onto Cedars and like, what was the goal for you? So when it comes to valuations, which is ultimately what you're figuring out, because if you have an amount, you know, you need in terms of money, you can kind of figure out what's the percentage of the business that you're happy to give away. And then that kind of gives you the valuation of the business. And one way to calculate it, which is the way we did it is based on a multiple of revenue, which isn't really actually the way
24:04
in 2023 is not the way we're calculating valuations. But in 2021 was the way that we were calculating valuations, was a multiple of revenue. And I think we did like maybe a six times revenue, seven times revenue, something like that. And that gave us a valuation. And then we knew...
24:22
kind of the maximum, maximum amount that we were going to raise based on the maximum amount of equity that we were basically willing to give away at this stage, knowing that we would want to be raising money again in a year's time. So wanting to kind of protect ourselves from giving away too much too early. And I think in that round, we ended up giving away about 20% of the business.
24:42
And so, okay, cool. Noted. Thank you. Got it. And so in the lead up, besides the time investment, which is obviously for you, you mentioned it was about six weeks where you're just, I'm sure like you've got the spreadsheet, the list of people, and you're just out there trolling every day, pounding the pavement online.
25:02
What is the investment in terms of the setup of a campaign? You know, are you creating a video asset or what else goes into getting ready for the campaign to launch? Yeah.
25:14
Yes. So we invested a lot into this campaign and it did pay off. So, you know, I'm going to say big numbers, but I really do feel like it was worth that investment in 2021, a much different climate than 2023. But yeah, I think we paid like six grand for a video. I think we,
25:34
added on maybe a bit of like a marketing package with the platform to have banners or an email. And we did a bit of supporting the campaign through paid. So all in, I would say we were probably in for like between eight and nine thousand pounds. That kind of includes as well, like getting a deck made up nicely. I mean, these are all things I don't know if I would invest in again, but I know that we did and it paid off.
25:57
Definitely the video, getting the right kind of storytelling, right. Because that's something that is, if people don't know your brand and they don't know you, it's just a great way to communicate who you are and what you're doing and what your products are. And if it's done really nicely, it's obviously like a great commercial for the brand. So yeah, we definitely invested quite a bit of money into that asset.
26:22
And are you working closely with Cedars on what the video should be? Or is this like you just freestyling and working with a production agency or something to create a video that you think would perform?
26:34
So I looked a lot at other campaigns that I thought were successful, either because they had raised a lot of money or because it seemed like they were drumming up a lot of excitement. And looked at their videos and then went to production houses and found the right agency to do it for us. Cedars doesn't advise, other platforms don't necessarily advise on the creative part of it, but something to know differently.
26:58
that I wish I had known is that there's quite a hefty like due diligence process. So you can't just say anything. So your script has to be approved before you film it. And you have to back up like every claim that you make with loads and lots of evidence. So it's definitely like important to give yourself enough time to do that. So we actually filmed, I mean, I suppose if you were in a big rush, you could do it a lot quicker, but
27:24
We filmed the video in about June or July for the campaign that was launching in November. Oh, okay. Right. It was really far out. Yeah. And that's the same with like all the campaign, all the elements on the page we had ready quite early on because of that due diligence process where they're like literally going through every word and making sure you can back it up. Got it. Okay. So...
27:48
You've got the secured funds kind of like in the lead up to launch. You've got everything like all ready to go. Launch happens. You said you got funded within the 24 hours. Amazing. What happens then? What does the next 30 days look like? What are you actually doing on a daily basis like for you and your team?
28:07
I actually have, and I'm happy to share this. I've got a whole project planned for the campaign. Oh my God, please share this. I'm offering it on because I got it from another brand. So I feel like I just need to like pass it on. It's like a whole Gantt chart for this. Oh my gosh. Let's definitely get that inside of magic.
28:25
Yeah, exactly. It was like a daily posting, daily posting schedule. So that was across my personal LinkedIn, the business LinkedIn. And at the time we were all on Instagram. I don't think we had TikTok then making sure that there was like enough kind of Q and A's, enough emails that the community understood what it was to crowdfund, what we were asking of them or inviting them to do. So there's a daily posting schedule. Yeah.
28:50
an email schedule. So I don't, we weren't sending daily emails at all, but just a regular kind of communication. Then there was also a announcement schedule. So on the actual campaign page, you can post announcements to drum up excitement. So making sure we always had like news to share. And then, yeah, still trying to raise money from direct investors. So still trying to get those like minimum 25K tickets in. Yeah.
29:14
Just to keep because when you bring those in directly, you could also add it to the ticker. So just trying to get that to go up. Right. OK, cool. Oh, wow. That's amazing. Did you focus on PR at all during that time?
29:29
No, we got the advice, which I agree with, is that it's not necessarily like interesting to news outlets to report on a brand that is crowdfunding. But what we did was we use the crowdfund. It's like that success and then PR that, but not during the campaign. We did. What did we do? We did try to get like people who had invested to post about it. So again, that was kind of on that on that weekly or daily posting schedule was to get
29:57
people with some influence on LinkedIn. LinkedIn was the main traction channel for that. Just getting people to be like, oh, I'm so excited. I invested in Mama Made or love supporting female founders. I invested in Mama Made. And this is why, yeah, just trying to drum up a bit of excitement and buzz around the campaign from other people as well. The next question I'm going to ask you is like,
30:20
When you looked back, what are the things that you wasted time on that you were like, you know what, that didn't really yield a result? And I'm asking because when I launched the book last year, I also had a spreadsheet that was, you know, here's everything I'm doing across every channel, blah, blah, blah. But when I did kind of like a post-script.
30:40
analysis, there were things that I wasted money on, time on, that definitely didn't give any results. And I could really easily see what the things were that drove results. Was there anything that you wasted time or money on? That's a good question.
30:57
So looking at back, and I'm still talking about the 2021 campaign, like LinkedIn was just so powerful that we probably didn't need as much content as we made for platforms like Instagram or email. But saying that, I still did feel like we had an obligation to educate around what we were doing and what, because it's much different from a Kickstarter, whereas, you know, in a Kickstarter, you're pre-buying a product that you'll then get. Yeah.
31:23
Whereas with a crowdfunding campaign, you're buying equity, which isn't necessarily a clear transaction to a lot of like your run of the mill customers. So it's like explaining kind of what that was. I did feel like we needed to do a lot around that to definitely see that the LinkedIn activity would push the needle. Like there was, we couldn't post too much about it on LinkedIn was kind of my conclusion at the end of the day. Right.
31:48
Does CEDAS handle all of the legal side of things when someone invests kind of like the actual paperwork and ownership and things like that? Is that all handled through them or did you still need your own legal counsel? So we still needed our own legal counsel.
32:04
because we were doing a general shareholder agreement for everyone because we'd already raised a round of investment. And anyway, it's a good idea, I think, to have a lawyer who's on your side of things. But yeah, CEDR is definitely, the beauty of it is that they then represent
32:19
anybody who's come into the round. And because they have such a high kind of bar for due diligence and quality, you can really get that trust that you're getting kind of the best possible protection or deal as much as you can with a startup, which is inherently risky. So yeah, they handle all of that. So even if you invest like 10 pounds in a campaign, you don't have to worry about the shareholders agreement. You trust that Cedars has kind of taken that on for you.
32:47
Got it. Gosh, it's so interesting. I haven't spoken to anyone who's gone through this before. So thank you so much for being so transparent. I want to, is there anything else you want to add on the successful campaign before we switch to whatever happened? Maybe it was still successful, but not to the same level or, but the new campaign that we're going to talk about.
33:08
So I guess even with the very successful campaign that we ran, something that I wish I had known is that it can take a long time to actually see the money into your account. So because again, of that due diligence on both sides, it just took a long time. I don't think we actually got the money into our account until like February. So just being really sure that like, you're not up against it. Yeah. Three months. Yeah.
33:33
It's a long time. And I've heard longer, actually. I know someone who's, I think she closed her campaign in March and she got it in August. So it can just take time. So just being aware of that. And I think also just knowing how, I think we brought probably two-thirds
33:50
of the money to the campaign. So from that was from our like LinkedIn and our marketing activity. So it's definitely not a case of like, Oh, I'm struggling to raise money. I'll just put a campaign up because that crowd is one that you have to nurture on your own as well. Um, so it's really handy for like getting all your people into one place. Um, and they've got, they have got a great audience. Don't get me wrong. We obviously raised from their, from their audience as well, but yeah, it's definitely, it's a high effort, high energy activity. Yeah.
34:18
Did you actually, before you even decided to 100% launch that campaign, did you have signals from friends or families or angel investors that they would invest before you actually started committing to the actual commitment here? Kind of like a casual conversations with people being like, is this something that you would do if we pursue this pathway? Did you have any signal? Because two thirds of it is a lot.
34:43
So we did. We did have people be like, oh, you should totally do a crowdfund or like we'd have emails in to our customer service inbox being like, are you guys raising money? I'd love to invest. So we definitely did have some of that. And just seeing the success of other food, food companies, other vegan companies on the platform at the time, it felt like a really exciting experience.
35:04
way to kind of energize our base. And the fact that you could invest for, I think our campaign, it was like as little as 15 pounds, which is even less than our, you know, our starting product price. It was like, yeah, let's just, let's do this. Amazing. Okay. Let's switch to the next campaign, which I think was last year in end of the year as well. No? Yeah. Yeah. Yeah, exactly. Yeah. Okay. So you're going around to do the next fundraise. You still want to crowdfund the
35:32
with an equity crowdfunding campaign, what happens?
35:36
So this was a slightly different case of Cedars. So when you close a campaign, that crowdfunding platform is then the investor in your business. So Cedars is an investor in Mama Made. And we were going out for a very small round, a bridge basically. And our shareholders agreement had something called a preemption notice. And that's very common in the UK, which basically gives your existing investors like kind of the right of first refusal for any...
36:03
next fundraising round. So we had to tell them we were raising money and they had the right to say yes or no. And they said they wanted to participate and we kind of weren't going to do a full campaign and then we're like, okay, we will do a full campaign. So it's a little bit less organized in terms of the decision of whether or not to do one. I think we decided in September to run the campaign and we launched it again in November. So it was very, very last minute compared to the one from the year before.
36:30
Okay. And so what was the goal? How much were you trying to raise versus what you actually did raise?
36:39
We weren't looking to raise very much. I think our target was 250, which we raised also within, I think this time it was like within eight hours or something. It was really quick. I think we ended up closing. Ooh, I don't remember even. It wasn't very much though. It was like not that much more than that. And I think that was a bit just bad timing. If you think back to November, December, just a few months ago, 2022 was not...
37:06
you know, not the same market that we were looking at a year ago. So it was just a bit less money out there. We as a brand, just, it wasn't part of our sort of initial idea for a marketing campaign. We weren't necessarily as prepared. We didn't run it as well as the last one. We didn't invest in the video in the same way. We didn't invest in our deck. And like, we just, we more or less did what I would always advise not to do, which is put a campaign up and hope for the best.
37:36
Yeah, we had pretty mediocre. I mean, we were happy with it. We went into overfunding, but it wasn't like the stunning result that we'd had a year ago. Right. And so is that just the reason for your, like the sense that I get from you is like, eh, like it was fine, like not so successful, but obviously it still is successful because you raised and you overfunded. Is it more just ideally you would have raised more or is it more just maybe we shouldn't have raised or like, what's the vibe?
38:03
I can't tell. No, I haven't actually spoken about this yet. I haven't really gone public with this. I'll go public with it on the podcast. But we ended up actually canceling the campaign. So we ended up returning all of the money that we raised back to investors because, yes, because during that time that we were running the campaign, like many businesses, we completely rethought our company's strategy. And yeah.
38:27
Like basically every other business, we're looking to reduce our cost base. We kind of adjusted growth plans. And what we realized at the end of it when talking to Cedars was like, oh, my gosh, we raised on a completely different scale.
38:39
plan. So our deck, our video was all based on one growth plan. And then because of all the cuts we made over the course of November, December, looking towards this year of like what everyone's saying, sort of hunker down and save your money, we realized actually, you know what, the best thing to do is just to return the money because we just raised on a completely different concept. So we returned that money just recently, actually a couple of weeks ago.
39:07
So yeah, that's why I'm like, we did raise it. We did have a successful campaign, but it just didn't end up with the money in our bank account. Okay, got it. And so that means basically what you were saying before about that due diligence phase. It's like you had gone out and been like, this is the valuation. This is where we're going to get to. But then everything changed in that time period. You changed your growth plans and then you were like, okay, it's not going to be same valuation essentially. But I guess in some ways you would have reaped the benefit of the buzz from going through the campaign. Yeah.
39:38
Yeah, like I still say, we did raise a successful campaign. And the funny thing is, I think actually this campaign, we raised from more people, I want to say, or the same number of people, just with a lot lower tickets. So we raised from more of our customer base and more of our community. We're like, I want to get involved, but I can only put in 10 pounds. And that was like an amazing feeling to see the number of customers that were, you know,
40:02
wanting to get involved in, especially now, you know, in the UK, like cost of living is like gone crazy. And I think especially November, December, around Christmas, people were especially anxious about things like energy bills and what was looming for 2023. So it wasn't like a great climate here. So the fact that people were happy to open up their wallets for us, it was an incredible feeling. But I also feel really good knowing that we did the right thing to return the money.
40:28
Yeah, absolutely. Wow. What a learning. That's a lot of effort that you put in there. Like, wow, that's probably still something you're working through. Would you do it again? An equity crowdfund campaign? I would. Knowing that you have this signal of so many people who from your community wanted to invest. Yeah.
40:49
I don't think I personally have the energy to do one again. Like it really does take it all out of you, but I would do it again a million times and I don't regret doing it. The only thing I regret about last, you know, this last one that we did was that we didn't actually run it properly. Like if I think if we had actually invested that bit more in our video and actually like done a deck nicely and, and really thought it through, we could have, you know, tripled the amount we raised. Ultimately we would have had to return triply about we raised.
41:16
But I still think that you really do get back what you put into an equity crowdfunding campaign. And it's an incredible, incredible way to get your brand out there, to build that engagement with your community, to involve them on that journey. It's just like a great feeling to really identify like, well, actually, like I talk about community the whole time, wondering, am I right? Am I not right? And then seeing that actually there is this community here that wants this product.
41:44
Oh my gosh, that is so cool. What a profound feeling. I love that. Love that for you. Thank you so much for taking the time to share, you know, so much of the ins and outs. I feel like I've learned a lot, especially about this. And it's something that, you know, as Female Startup Club continues to grow, I'm like, you know.
42:02
What else could I do? I'm not really interested in the VC path. That's not necessarily for me, but I'm also like, you know, how do we grow? What is that next phase? And hearing stories like this, I'm like, wow, that's really cool to involve your community and have that, you know, having the people who are actually the reason why your company exists being involved in the ownership of that company. I just think that's so special. So thank you so much for sharing that. Yeah.
42:25
My final question on the kind of crowdfunding side of equity crowdfunding side of things is what's your final piece of advice for anyone who wants to go through with an equity crowdfunding campaign or your top piece of advice?
42:39
My top piece of advice would be that it's a really full effort 360 marketing campaign. So it should be run that way. It really benefits from having that kind of sophistication brought to it, that really solid project plan, the right assets. Investing in it definitely pays off. I've done it both ways, as you've heard.
43:00
So definitely do the way where you put that bit more effort into it. It does pay off. Yeah, absolutely. Thank you so much. And for anyone listening who is thinking about going through an equity crowdfunding campaign or wants to learn more, Sophie's going to be joining us inside Magic with Ajay, which is our private community to share kind of the more intimate side of things, a Q&A, very kind of one-to-one style conversation. And she's going to be sharing her process here.
43:28
document, Bible, whatever you like to call it. So you're able to take those and it's also recorded for anyone to watch back if they're not able to catch it live.
43:43
Hey, it's June here. Thanks for listening to this amazing episode of the Female Startup Club podcast. If you're a fan of the show and want even more of the good stuff, I'd recommend checking out femalestartupclub.com where you can subscribe to our free newsletter. We send it out weekly covering female founder business news, insights and learnings in D2C, and interesting business resources.
44:07
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44:30
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