Latest / Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast) / Part 3: Ami Bateman Breaks Down Her Exact Marketing Spend $$$ on the Pleasant State Equity Crowdfund (and her thoughts in hindsight!)

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Part 3: Ami Bateman Breaks Down Her Exact Marketing Spend $$$ on the Pleasant State Equity Crowdfund (and her thoughts in hindsight!) · Imagine If with Doone Roisin | Health, Wealth & Wisdom for Women (formerly Female Startup Club Podcast)

• 0:00
  This is Amy Bateman for Female Startup Club.
• 0:13
  Hey guys, welcome back. It's Dune here, your host and hype girl. By the time you hear this episode, I will be somewhere back in Europe or the UK, spending time with friends and family and doing all our favorite things on this side of the world. But today you're going to be hearing from Amy Bateman again.
• 0:36
  You might remember that we've had Amy on the show a couple times already to talk about her equity crowdfunding campaign for Pleasant State, which I can proudly say I invested in. I'm such a hype girl. If you haven't listened to those two episodes already, I would highly recommend going back to part one and part two so that you're all caught up on those episodes because they really do sit in a chronological order.
• 1:00
  This episode today is absolutely brilliant. I just love Amy so much for her candid insights and we really break down the nitty-gritty line item by line item marketing spend so we can understand what made this campaign successful.
• 1:18
  And if you love this series, let me know. I'm kind of curious if I should do more of these multi-part series to get into the nitty gritty of how something or a campaign or a strategy really works. Alrighty, I think that's it. Remember the girl code, share the love, leave a review, all that good stuff. Let's get into this episode. This is Amy for Female Startup Club.
• 1:44
  Amy, welcome back to the show. Hi, Dune. So excited to be back. Oh my gosh. I'm so excited to be back and to see and hear all of your interesting updates in like the last, maybe it's been a month since we spoke. Where should we start? I feel like when we were talking...
• 2:06
  You were in the valley of death. It was the week before you were about to close your official kind of investment offers and we were discussing how you would basically have to kind of like really lean into that last week and do all the things to pick back up the pace. So I reckon we start there.
• 2:27
  Yeah, amazing. Yeah, thank you for reminding me about that very challenging valley of death time. So you're not ready to talk about it yet? No, actually, I feel really good, nice and refreshed. I took a little bit of time at the end just so I could get back and become creative and productive. But, yes, from memory I was quite burnt out when we last spoke and I did speak about the fact that that middle period was
• 2:56
  And it's the case in any kind of crowdfunding raise. It really does drop off. And I just made a decision to not push too hard during that period, recognize it's just part of the process, try to, I guess, reserve some energy so that when it did come to that last week or the last four days, we could go again, knowing that that was going to be really difficult for me and energy intensive given it would involve a lot of talking.
• 3:23
  Yes. So that's where we were. Yeah, I can talk about then those last four days. What did you do in those last four days? How did it go? What were the calls like? What were you, what was the energy? What was the vibe? At that stage had the Canva, the former Canva director and now a current advisor invested. Yeah.
• 3:47
  Yep. That didn't happen at that point. I think that was a few days after even. Yes. Okay. Like not even the same day, like really close to the end of the campaign. Okay. Amazing. I think that's probably a really important place to start because that was a really significant turning point. So before, his name is Lee, before Lee invested, we were sitting at just over 600K.
• 4:13
  And yeah, we were in that valley of death. I remember I was driving to the gym, very tired. I get a call from Sian and I'm thinking, oh no, what's wrong? I'm literally about to walk into the gym and she's just like beside herself. She's like, oh my gosh, we just had a huge investment.
• 4:33
  And she told me the number and I can't disclose what we said publicly. It was our largest investment through the crowdfunding, the CSF raise, the crowdsource funding raise. She told me the number. I just remember I'm in the car like repeatedly saying, what the F? What the F? I can't believe this. Are you serious? And then... And with no calls, nothing. No, nothing. Through the platform, you just all of a sudden get this investment. Correct.
• 4:58
  And so I said to Sean, who was it? And she told me it was Lee. And I was like, oh my God, of course. So Lee had expressed interest in the first couple of days when we launched the expression of interest phase. And I remember just being so excited because we had a few high profile people come in.
• 5:16
  at quite high numbers. And I had tried to engage with those people early on by asking if they'd like to have a conversation. I sent them the offer doc before that the offer actually went live to see if they'd like to provide any feedback on the valuation. And most of those people had just never actually had a response from. So basically, Birchall's advice is when offers come in or expressions of interest come in at that height, the likelihood of conversion is super low. So
• 5:44
  We tempered our expectation and just expected that we probably wouldn't see anything from those. So the fact that we had this massive investment coming from someone we do not know,
• 5:56
  You know, not even a customer of ours literally heard about us through the virtual platform from the newsletter. Obviously, you know, he's a clever investor. He'd read the offer doc. He's very passionate about investing in purpose-led businesses that impact the environment. That was a game changer for us, mainly because we knew if we were able to get a high-profile investor...
• 6:20
  that we could leverage that for media attention. And so PR is such an important aspect of an actual crowdfunding campaign because if you can get in the Australian Financial Review, which we were able to do in the end,
• 6:35
  then you can leverage that for your ads and you can tell all of your existing database or people had signed up to the expression of interest that your former Canva director and now advisor has invested and it just gives people confidence. And then they have this fear of missing out. But this, you know, I had to work really hard to, I shouldn't say hard, but I had to be quite clever in the way that I engaged with him to get him to agree with,
• 7:02
  to go on record because he'd never responded to me.
• 7:06
  Oh, yeah. Because you can't just put it out there, right? Like it's private information. Yeah, exactly. And he's overseas. So I believe he's in, no, I shouldn't say the country because I'll get it wrong. And that's embarrassing. He's overseas. Okay. He's never responded to me. We don't have a connection. And I was speaking to our PR agent. I'm like, okay, Drew, what do I, like, what do I do? He's never responded to me. How do I get him across the line? And
• 7:33
  I said, I do have his mobile number. Maybe I should message him as well. And PR, good PR people are relentless. And Drew's like, yeah, do it, do it. And so I- What did you say? So what I did in the end is I was like, I bet if I put my, his number in my phone, I'll see if he has WhatsApp.
• 7:53
  And then I thought my friends and I often send each other video voice memos on WhatsApp. I'm like, you know what? I'm going to send him a voice memo. So I drafted this email just saying, oh, my gosh, we're over the moon. Thank you so much. Your investment just is going to change the world. I just cannot believe it.
• 8:14
  Thank you so much. Would love to speak to you at some point. And then I had my ask, which was, it would really mean, actually I leveraged Drew so often as a woman, you know, saying someone else.
• 8:28
  recommended you do this makes it a bit easier to have that ask. And so I said, our PR agent has asked if we could please get a quote so that we can take it to the media because that, you know, that will just continue to help us succeed. And so he responded immediately to my voice memo. He said, yes, of course, give him a couple of hours. Yeah.
• 8:48
  Did he voicemail you back or did he text you back? He didn't. He just texted me. And then we continued to communicate throughout that day because I got the quote, then Drew, the PR agent's like, ask him for this. Can you ask him, can we disclose the amount? Can you do this? I remember by the end of it, I was like, I cannot ask another thing. And then Drew's like, do it.
• 9:11
  It's just, it's so good. You do this now. And I'm someone really comfortable asking for things, but sometimes having someone in your corner that will push you to do things that are really uncomfortable. It was so beneficial because he said, no, I'm not happy disclosing the amount. And so Drew says, well, ask him, can we say he's the biggest investor? Because those little sound bites are so important. So yeah, we were really lucky. Drew was really incredible and relentless and worked so hard for us.
• 9:41
  We got into the fin review that day, actually. So it went in the, I think the urban area. Holy shit, that's crazy. My mate, Chris, who's in property development, and often his projects are in the AFR, contacted me, he's like, I don't even get mentioned by name in that. So Sharda and I are being mentioned by name and a cool picture of us. And then, yeah, we picked it up, threw it into ads and that was a real game changer. So...
• 10:08
  I think sometimes you can't under, there's a bit of luck. Like, I think there's a little bit of luck, but at the end of the day, it also demonstrated that off the basis of our offer doc,
• 10:22
  And the opportunity for him, it was a really viable investment opportunity. You don't just throw money at a business like that, right? Particularly if you don't know the founders. The fact that he's a male that has no connection with us and yet he came in and invested is a real testament, I believe, to his character. So I'm really, we actually haven't, I haven't contacted him again. I've been too, like, just a bit tired. So I really need to reach out to Lee.
• 10:49
  and, you know, see how else we can leverage him. But I'm really excited to have him part of that. So anyway, that's a really big shout out to Lee. I know what a legend because it's just so rare that
• 11:01
  Still men are investing. The bulk of investors are often men and they come in at higher sums. And the research does show that typically if they're going to invest in women, they have to know them. You have to prove yourself over years. Your connection with them has to be so strong. And so we really need more investors like Lee who really believe in
• 11:24
  the ability of women to deliver and the stats all show it without having to have those really strong, I guess, network connections. So, yes, I'm really happy about that. Anyway, Lee's not the only one, right? So Lee, like, here's a small portion of that. The last, that gave Sian and I like more momentum, right? So we're like, this is super exciting. This is it. This is a turning point. We've really got to make the most of this.
• 11:49
  So what timeline did you have left? Are we talking like 72 hours left? I think it was seven days. So we're probably six, seven days out by this day. Oh, okay, cool. So yeah, still a few days. Yes. So I would just start doing, you know, we pushed it all on LinkedIn. We put like, we pushed it everywhere. We asked our networks to share information.
• 12:10
  really to continue driving this momentum, people who hadn't invested yet at higher sums, I would send them a message. Just be like, hey, did you see, I might send them a picture of the news article. I'd be like, oh, did you see that the Canva advisor invested? I would get messages from people being like, oh, is it still open? Like if the Canva guy has invested, maybe I shouldn't. And then those people, some of my male friends are like too late, buddy. It wasn't too late,
• 12:40
  um but yeah we were really emotional roller coaster it is and so yeah it was just like fundamental to our campaign um and so yeah just you you can then how do you make the most of an opportunity like that and we really did exploit it to the max and then
• 13:03
  However, that didn't mean that we could be complacent. So those last four days, Sian and I, I went away. So I went away with my partner just up north a little bit, locked myself in a really nice house where I could see the ocean just so I felt a little bit better about my life. And then it was literally on the phone nine to five for four days straight. Yeah.
• 13:26
  And that for me, as we've discussed, I'm an ambivert, so I swing between extroversion and introversion. But for me personally, having to have the same conversation over and over again and speaking for that long is extremely energy intensive. But what we did is we just kept setting ourselves targets. So we'd say, all right, our goal today, we need to get to this much money.
• 13:48
  And so, and Sian and I are quite competitive. So we just keep going. And then when I was in the momentum, I'd be like, yes. And so sometimes we'd be on the phone and someone would invest immediately. Yes. Or we'd call, they wouldn't answer, we'd leave a message. And then a few hours later, their investment would come through. So there was this repeated feedback that what we were doing was really working. It was working. Yeah. That's not to say it was so hard. Yeah.
• 14:15
  Like this whole process is the hardest thing I have ever done. That last day, so where were we? Our internal goal was to hit a million dollars because that's super cool. It's very rare for female founders to raise a million dollars, particularly in crowdfunding in this environment, predominantly from women. So we thought this would be a really amazing milestone. We can demonstrate to other people that this is really possible and it's just a really beautiful story for our community.
• 14:45
  And so that was our goal. But I remember partway through the day, I think it was before lunch, I just felt like I had nothing in me left. And I'm like, whatever, I'm just going to leave this to chance now. Like, yeah.
• 14:56
  I've really done everything. But actually, we had we had to keep going till 10pm that night. I climbed in, I climbed into my bed at this place I'm staying. I'm like literally under the covers and I'm sending voice memos to my other kind of founder startup friends. I'm like, I can't, I'm done. I can't do any more. I've got nothing left. And they're messaging me. They're like, yeah, you can.
• 15:20
  you can you've got it yeah you got this you're almost there like you're doing great just keep going so um I had yeah I had to leverage a lot on other people's energy and I guess believe it to keep going because yeah I really didn't have anything left but we got there oh my gosh you got there and it was so we I remember it must have been like eight nine o'clock um
• 15:48
  where we crossed the million mark and had been sitting just below that for quite some time.
• 15:54
  So that was frustrating. And then I remember we had like, I don't know, just shy of 10K invested. I believe it was. Sorry, I'm throwing my dad under the bus here. And I was like, who was it? And my dad hadn't been responding to me all day. I'm like, I'm telling him, like, I'm so nervous. We're like going for the million. I don't know if it's going to happen. It would just be so amazing. My dad was ignoring me all day.
• 16:19
  And then I'm messaging Shana like, damn it dad, reply to me, text me back. I know and it was slightly strategic, I won't lie, it's like okay I'm gonna have my dad as a backup, like maybe he'll come through in the end because this whole time he said he wasn't going to invest. Don't you love your family? Tough crowd, tough crowd. And then Shana's like,
• 16:42
  Yeah, it was your dad. So my dad had been waiting like all day and him and his partner. Wanted to be the hero. Yeah. And they agreed like they were willing to go up to a certain amount to get us across the line. So I think they were just sitting there. They're like, OK, let's do it. This is the time. And so it was so cool that it was my dad that got us across the line. How sweet is that?
• 17:04
  That is so beautiful. Like, again, just such a nice little soundbite to pull out that it was your, you know, the support of your family that got you across. That's so cool. I love that.
• 17:16
  Was there anyone like, I remember we kind of mentioned this like earlier, but also last time we spoke, any kind of, what did I call it last time? Oh, dick swingers. People who like come in, swing their dick around. They're like, give me all these documents and these numbers. And like, then they don't actually really ever have the intention of investing. They're kind of like a time waster. Did you experience anything like that?
• 17:42
  Yeah, definitely. Did I share, was it that I shared that story privately with you and I didn't share it online? I think so. Yeah. Yeah. It was really interesting back to that point, but you know, and this virtual has a lot of experience in this and sometimes I'll be like, yeah, yeah, sure, sure. Like, I don't really believe that I'm going to rely on my knowledge, but they, there were a number of things that virtual said and did that demonstrated that they were right. And like, so if,
• 18:11
  you know, if anyone's going to go through virtual, I think it's really good to rely on their expertise here. But they were super clear that anyone that comes in with over 100K investment is, the likelihood of them converting is super low. And yet your, I guess,
• 18:30
  When you see those, you can often feel like they're the people that you should put the most investment of time into to try to get them across the line. They're the ones that seem the most exciting, but actually they're not necessarily serious. And I don't know why they do it, to be honest. That was my next question. Why do people do that? Like it's a waste of time for everyone.
• 18:50
  I don't, I can't answer that, right? Because I'm not, like, that's not something that I would necessarily do. I really can't answer that. So that would be something for them to comment on. But, yeah, what I'd say is they, those, the big ones don't really convert. It's better to invest your energy into your community. So many, many people who are investing lower amounts, um,
• 19:14
  And particularly people that are in your network, like your friends, your family, your former colleagues, people who, particularly as a woman, people who already believe in you and know you, they're the highest likelihood to convert. And they're the ones you can really rely on. Yes, there was one that came in. This is a classic. Put in a 100K plus account.
• 19:41
  And it was at the time I was sending out the offer doc. So it was literally a couple of days before the offer opened. And I said, thank you so much for expressing interest. Here's our offer doc. If you've got any questions, let me know. Happy to jump on a call. Immediately get a response back. And he said, oh, thank you, but your profit margin's too low. And I said, oh, that's
• 20:04
  Thank you very much. I'm curious, what sort of profit margin are you looking for? Because a competitor who raised a very significant amount on virtual had a profit margin that was, ours was at 50 and theirs was at 40%. So we like, ours is significantly higher. Yeah, what are you looking for? He didn't answer what he's looking for, right? So he actually didn't answer my question. He was offering to catch up with me, very kind of him.
• 20:33
  at some time in Queensland to share all his knowledge. And I remember just through the day feeling a bit shit about it. I'm like, do I, like, have we built a shit company? Like, is that really not good enough? And, you know, I went away, like, investigating a bit more. I'm like, no, I think that's pretty good. The really funny thing about this particular individual is that they had done some crowdfunding themselves. Yeah.
• 20:58
  And so I could access their data and their financials. And I established that they're like, while not significantly lower, their gross margins were lower than ours.
• 21:09
  their general loss was much higher as a percentage of revenue than ours. And they raised significantly less than we did in the end. And so I think, you know, some people come in often, and it's not typically women that do this, but men will come in and they're very quick to tell you what's wrong and how you're not good enough.
• 21:29
  And it's really important to kind of ignore that. And, you know, for me, I just quickly went back to the facts. I've, you know, I'm like, no, no, it's good. I contacted our advisor, Wendy, who's former CFO of Unilever. I'm like, Wendy, I think we're fine, right? Like, this is fine. I know it. I fundamentally know it that we have really good fundamentals. Yeah.
• 21:51
  She's like, yeah, don't worry. And then we just kind of had a bit of a laugh about it. So you just have to learn to ignore it and kind of be like Teflon. It'll like let it just kind of, what's the term, bounce off you, slide off you, be polite. I'm always polite. But don't take it on. It's easy to say don't take it on, but then I also feel like,
• 22:14
  it's hard to practice that, you know, because of course those things, especially if you're like feeling tired or you've had something else bring you down that day, then it's easy to let things seep in and become part of your like inner dialogue. Did you, was there any follow-up with that? Like did you speak to that person again or like, you know, what happened? How did that round out? Yeah.
• 22:39
  I often have lots of fantasies about how I would like to follow up on that. One was that I should offer to catch up with him and give him some feedback if he'd like. But like, no, I'm not going to waste my time. Don't waste your energy. That's so lol. What it does do is, again, those things actually really motivate Sian and I.
• 23:01
  Um, there's been other people, again, I'm not going to name names, but people quite close to us who have been doubters about this. And all it's done is, you know, and it's like, to be honest, it's super rare for us because we're like, we're really clear about who we surround ourselves with. But every now and then they come in. Sometimes they're your closest people. So you can't really get rid of them. All it does for Sian and I is motivate us to go and prove them wrong. Um, yeah.
• 23:29
  And this particular individual, they become your biggest advocates. It's so fascinating how you can convert them. And then this particular individual even apologised in the end. Oh. Yes. Wow, that's amazing. I wasn't expecting that. Oh, my gosh. They're like, sorry, basically they'd been a bit of an old fart, basically. And, yeah, completely misjudged us.
• 23:55
  they had they tried to correct like quite a lot throughout like contacting us all the time to keep us going but it was good because then I was able to make a joke and be like yeah thank you so much like you actually motivated us so much yeah you were like a really big reason that we
• 24:11
  We knew we had to prove to you, like to anyone that didn't believe us that we can do this. And so it just really, I guess, puts a fire in our belly to go and show like people that, yeah, all right, you might not believe it, but we really do. And yeah, I so resonate with that. I feel like when things have happened to me in my career or business life or just life in general, where it's like.
• 24:39
  something that has hurt you, you can also see it as something that has actually been some kind of blessing because it makes you go to another level. Yeah, I totally agree with that. The other day I think we posted something on Instagram and it was Sophia Amoruso and she said, the three words that should boom inside your head when you hear no as an entrepreneur is let's go, motherfucker. Oh, yes, I do see that. Yeah.
• 25:06
  100% When I saw that, that is exactly Let's go What I do want to say, like it's often so easy to focus on these really small minority Because that's exactly what they were, right? And they can take up too much space And it's really important that we don't blow that out Like actually we need to minimize it
• 25:28
  We're literally doing, we're talking about, I don't know, two, like we're talking two people in 2000 expressions of interests and a community of like 20, I don't know what we're up to now. It's like 40, 50,000 strong. So why we spend a lot of time on these people and that's a waste of our time.
• 25:48
  the bit right the bit that we should be talking about is like how amazing it was having these conversations so even though for me they were hard they were the most beautiful conversations because everyone was just like we're so proud like so proud of what you've achieved so like that's the bit we should focus on we just have to have techniques to be like all right put this in a
• 26:13
  Totally. That's fine. You're not my person. You don't believe that's... We have thousands of other people that do. So just move forward. I think it's so interesting though, like for me when I just think about when I am either rejected or disappointed or something doesn't happen the way that I was hoping for it to happen, especially in business,
• 26:32
  The brain is so weird that that's the thing that you zero in on instead of all the good things. And instead of all the things that are going right, it's like I'm someone that tends to like dwell on that kind of stuff. So I have to really work extra hard to try and, you know, quickly move on from that and whatever. But it's funny how the brain is like somehow makes that more significant when it's we should just be like, no, that's over there. Who cares? Let's carry on.
• 26:56
  And I think the way to counteract that is just be like, all right, that's a negative. Like that's one negative. Let's find three positives or just focus on the gratitudes. So just really switch your mind very quickly and say, okay, that happened, but here's all the data points or go and call a friend to verify that you're doing a really great job. So just like really shift your mindset very quickly because that you'll have a much better energy. The other thing, I think it really comes back to,
• 27:25
  And we've talked a lot about financial literacy and comfort with your numbers. But, you know, when you have someone come in and tell you it's not good enough, this is a view we already have around our financials because we've repeatedly been told we're not good with numbers. We're not good at maths. We're not good with P&L. It's important that you do understand that and you spend the time and you go and verify and compare yourself like I did when that guy told me our profit wasn't good enough. I went and looked at his. Yeah.
• 27:53
  Right. And so I had data points. I went and looked at benchmarks like, no, we're really fine. And if you have confidence in your numbers, you can be OK with that. We, Sian and I, were actually on a call with two female founders in a tech startup. They're incredible, by the way. They, you know, in a number of years have built an awesome tech app.
• 28:15
  you know, making lots of money and they're profitable. But like these female founders, they didn't want to show their profit percentage in their pitch because they didn't think it was good enough. And so I was like, all right, we'll cut that slide. And,
• 28:32
  But what you need to say is this is our revenue. This is our revenue figure. And, you know, after only a few years, we're profitable. How many technology startups can say after a few years that they're profitable? I'm like, come on, ladies. Like, honestly, why are you worried? You're fine.
• 28:52
  Like, for the earth's sake, you're profitable after a couple of years. You should be, like, singing this for the rooftops. One hundred percent. It's great. That's crazy to me. It's like most people, no, that's too much of a generalization, but, like, I feel like a lot of people that you talk to or hear about, especially in tech, which requires a lot of capital to get it going, you know, working at scale, are,
• 29:19
  Definitely not in profit. And if we think about big companies like freaking Uber, probably will never be profitable. Yeah, 100% at a time where...
• 29:29
  you know, again, the markets are drying up. Apparently, allegedly, they're looking for businesses that have profitability. So that's actually a real selling point. But, you know, we just think it's not good enough. And I think that really comes from the fact maybe we're not really going out and looking and comparing ourselves against other data sets and just really getting in the numbers to give ourselves comfort that it's fine and okay and having people around us remind us that it's okay.
• 30:00
  I feel like this is a good segue to talk about the numbers when it comes to your marketing spend. In the last episode, we kind of touched a little bit on how much you had spent up until a certain point, but we hadn't kind of gone into what you estimated your budget to be and then what the reality of that budget was over the, I think your campaign was live for three months, right?
• 30:24
  So the campaign itself is six weeks in total. So you have a three-week expression of interest and then a three-week offer period. But you're exactly right. That's not when it starts. The campaign starts much earlier. So we...
• 30:39
  To some extent, we launched it in January. So we had a really clear plan of how we were going to warm up our community and get them excited. And so if you think about it, it was a six month campaign. But it started before that even we had spent so long in our campaign.
• 30:55
  you know, our pitch and our investment offering. And so a lot of that had been done. But I actually estimated hours as well for our conversation to give you an idea of total hours. And it's probably conservative, but I'm happy to share that so people have a bit of an idea of what something like this to pull off a successful crowdfunding campaign because it's not easy. And I saw a...
• 31:22
  An article come out the other day saying there's been a drop, a 26% drop in crowdfunding in recent months. And so, you know, it's much harder to do it now. And the investment in something like this needs to be entered into with great consideration from a time and a cost perspective. So, yes, let's talk numbers. I prepared them all for this conversation. Yeah.
• 31:48
  Amazing. Yes. Numbers. Excellent. I'm just, I'm going to do a quick. What are you giggling at? I was working out like a proportion, like spend of raise and I had a feeling given our prior one. So, and I'll touch on that. Okay, cool. Excellent. Spend. Great. Spend. Where are we at? What was the budget? Where did we land? I think it's very important.
• 32:17
  to emphasize that there is also a big financial investment that goes into running a campaign like this is,
• 32:24
  And we knew that. And so we actually did a small raise, like a fairly small raise before we even went into the crowdsource funding campaign. So we approached a number of, there were all people who would support us throughout our journey, typically with loans, or there were people that were coming on as our formal advisors. So we approached them to an issue to safe note and we raised just over $300,000 before we actually started our crowdfunding. And the intent of that was...
• 32:54
  in part to help fund the campaign and in part operational costs. Having said that, that was oversubscribed. So we didn't intend to raise 300K. We were looking at sort of, it would have been, yeah, weirdly 150, which is what we required to run this campaign. So of all the costs, we landed at just over $135,000 direct costs.
• 33:20
  So the ads cost us just shy of $70,000. That was split between our expression of interest phase, which was about $54,000. And when we had the offer live, we spent another $15,000 or $16,000. So you could see it was heavily weighted to the expression of interest phase. Because if we could get a big database, well, we could call them, we could message them, we could hit them with ads, we could hit them with workflows and really nurture them.
• 33:51
  However, you still continue to get really good leads during that offer period. But you can see the weighting is $54,000 versus $16,000. So, yeah, as I mentioned, total ad spend was about $70,000. We spent $15,000 on PR. Without a doubt, that was a really important investment. And as I mentioned, Drew was so critical. Yeah.
• 34:16
  Yeah, and it feels like to me from the outsider perspective is that a $15,000 investment for what you got press-wise was like a really good ROI there. Because I feel like from me being on kind of the receiving end of emails or social or whatever, there was just like constant press, constant things coming. It felt like very significant what you got.
• 34:42
  Yes, the return on investment from that was really amazing. And, you know, Drew Lambert, who worked with us, was really incredible. And he, yeah, we've worked with a few PR companies, but he is, as I've said, relentless. He knows he worked with us so hard to really find that story that was really important. He actually rejected us the first time we reached out to him. Yeah. He was like, no, I don't think.
• 35:08
  I think there's a compelling enough story. And it was a weird thing. Sian had contacted him and then I didn't realize Sian had contacted him. So I separately contacted him and then invited Sian to the meeting last minute. And so he was like really direct and stuff. I'm like, oh, he's not going to take us. I may have even said, oh, okay, well, you obviously don't think that we're the right fit. And then for some reason he was like, okay, well, like what are some other angles? And then eventually once he's on your team, he was the biggest advocate. Yeah.
• 35:35
  And he worked so hard. What was his like, how did you come across him? Had you, you had just done your research and found him or someone had recommended him to you or? He was recommended to us both by, we worked with a lawyer who had supported Kester Black through their raise. So he's a director of Kester Black. He had recommended Drew.
• 35:55
  uh drew is actually uh recommended by virtual but i'd a friend actually um nat nat d'alessandro so a common connection she forwarded me an article about a successful raise one of the gin companies and how drew had shared a post about it being like one of the the most successful raises and so it was quite clear drew had he had a number of notches under his belt so i reached out to him
• 36:25
  And so that's how we got onto him. So, yeah, I'm really glad we got him across the line, but he's very particular. So you better go in with a compelling sell if you want to get Drew on board. That's so interesting. But I also love that. Yes. Very, very cool. I love that, yeah, it's like he won't take on work with anyone. It's got to be like a win-win.
• 36:47
  So you spent 70K on ads, you spent 15K on PR, and then we've got, it was 135, is that what you said, the total budget was? Yeah, correct. Yeah. So we had a couple of partners that we made an investment in them to, like, promote us. So that was $6,000. We spent, I've rounded up a little bit, by the way, which is why they're even numbers. Our video was $7,000.
• 37:15
  And that video is really important and it's important that it's really good quality because you actually chop it up into ads. And so we made a really big investment into that. Our photo shoot cost us $6,000. What I haven't included in there is that we traveled to Melbourne for that. And so there was a travel cost associated with that. But that was the first photo shoot where we had a stylist that.
• 37:39
  And we did makeup and hair. We had the whole team. So it was a really big production. Those photos, though, we've used like across a number of things. So it was a good investment for us. But our biggest investment in photo shoot to date was,
• 37:53
  Designing that offer doc, the offer doc is like a 50 page document and there's a lot of financial tables. And so making sure having someone that could do that really well first time with little involvement from me was really critical. So Dave, who's our branding advisor, our intention was always that he would have equity because he's just been so fundamental and has done so much for us.
• 38:17
  from the get go in terms of like taking at risk fee so he could work with us cause we couldn't afford him. And so basically we just made a deal for equity. So we've agreed a timeframe in the next three years, number of hours for equity. And so we, a portion of his work on this campaign,
• 38:35
  has been allocated in terms of hours. So I just placed a price on that of about $10,000. So, you know, he's not cheap, but I didn't have, like I literally didn't have to review it. Well, no, that's not true. I did review it a couple of times, but his work is perfect. And so I knew if we did it in-house, it would detract from the broader work that we were doing around EDMs and ads and stuff, because already our graphic designer was working so hard. So, you know, typically I wouldn't recommend you spend effectively 10K on your offer doc, right?
• 39:05
  But again, that was given up as equity, not straight cash. So legal, we've spent $12,000, but we engaged a very good lawyer. And he helped with a range of things because he had to redo our constitution. He was able to also provide general business support and advice for the campaign.
• 39:26
  And so that we, I just made a conscious decision that he was really critical. He prepared our safe notes. So I've also incorporated the fees for that initial round. And then accounting was about $7,500 because we had to prepare all of our accounts in line with accounting standards. And we had two entities. And so that was actually a really big piece of work, not also from my time and perspective, but also their time.
• 39:58
  $132,000. Sorry, I lied. So then I lied. So that's the $132,000. I started to put in virtual fee, but then forgot a really big significant portion of that. So I'm just updating. Okay, here we go. I wanted to ask that. What's the virtual commission? And do you factor in as an additional line
• 40:22
  the time of you and Sian, because I imagine, yes, that's not a hard cost, but it is a very significant portion of time, energy, et cetera. Yeah. Okay, so we're at $132,000 just for all those kind of direct marketing, legal accounting kind of costs. The virtual fee, so they take 6% of the raise,
• 40:48
  And as well as like a small fixed fee. And so that cost to us is about $63,000. So we and I had missed the 6% fee. I just noticed that as I was talking. So we're actually at just shy of 200K is our total investment. The beauty of the virtual piece is they deduct that all of their fee and they're not going to be able to pay.
• 41:10
  at settlement. So we didn't have to pay that in advance, like whatever's raised, they collect all the money, they invoiced us, but they just, they removed it from the initial deposit that they made. Right. Yes. So if you look at that, so excluding mine, Sian, Tasha's time, our graphic designer, about, we've spent about 14, 14% of our raise has gone to running the raise.
• 41:38
  Wow, that is very interesting. Very interesting. When you think about where you spent money, where you allocated money, where you allocated your time, is there anything that you would do differently? Is there anything that you would have spent more on doing? Is there anything that you would have been like, this wasn't worth it? What was the kind of like takeaways now that you've had some time to process that?
• 42:02
  No, I don't think so. Everything I look at here, again, I wouldn't recommend spending $10,000 on an offer doc, but that kind of arrangement there was really different for us. It was a way for us kind of being able to reward people.
• 42:17
  Dave, because for a number of reasons, he wasn't able to participate in the raise in the end for personal circumstances. So we kind of came to an agreement so we could reward him because it's something that I've just wanted to do for years. And this was the opportunity. So, you know, I'd probably deduct the 10K, definitely reduce that.
• 42:37
  The accounting fee. So that's probably higher than I would have expected. The one we had to have a conversation around that with our accountant, that's actually reduced versus what it was. I had asked a few times for an actual quote.
• 42:54
  on that fee and they did not, they didn't provide it. And so had I known what it really would have cost, I probably would have gone to market. So the point here is always just be really clear about those costs, get people to provide their fee upfront and sign off on that. In this case, because they didn't do that and it was actually significantly higher than the 7.5k that I mentioned. We, you know, I just had to have a
• 43:16
  quite a frank and honest and direct conversation with them at the conclusion. So they reduce their fee in recognition that, you know, I'd asked twice for a quote. But this is just good budget management. So understand the costs up front and be comfortable that you're willing to spend that. And then, yes, the total time. So sort of between March, January to March, mid-March, Sian and I probably spent 25% of our time on,
• 43:44
  you know, leading up to the campaign, heaps of PR, awards. I think everyone saw how busy we were. So I'd say 25% of our time was in the lead up to the campaign. Between March and April, about 50% of our time was on the crowdfunding campaign. And then between April and June, over 100%.
• 44:06
  I can't even tell you how many hours we were working, but it was probably 60 to 80 hours a week. And then Tash was pretty similar in terms of her allocation. So I conservatively, in addition to some increased customer support as well, because the customer support ramps up at that time because you've got lots of people inquiring about the raise. I've estimated about just over 1,400 hours into running the campaign.
• 44:36
  Wow, gosh. Okay, so campaign finishes, what happens next? What's the post-settlement process? What are the logistics to getting the money into your account?
• 44:48
  And like, then let's discuss getting a million plus dollars into your account. Amazing. Excellent. Yes. Well, it finished at 10pm and we were just so happy. Our internal target was 1 million. We set 1.1 as a stretch and we landed closer to the 1.1. So once we hit the one, we're like, sweet, we can celebrate, like, good job. It was a bit annoying because it kept like creeping up to the 1.1 and then you'd kind of find yourself trying to be like, oh, wow.
• 45:17
  But actually, we were just so happy. And then, weirdly, like, I couldn't wind down. And I, this was so weird, but to wind down, I read someone else's offer doc between 10 and 11pm that night on virtual. Who does that? That's so weird. I was just, like, so curious. I was, like, in their financials, like, sussing it out. Did you invest? Sorry. No, I didn't invest. No. I was like, people should have invested in Pleasant State, actually. So...
• 45:46
  Of course, like I shouldn't say that. They did really well. So good on them. And yeah, I think I had to keep going. So the process after that was, you know, you take on, we've taken on 720 odd new investors. And so as part of that, we had to set up a share registry app. We decided on Boulevard in the end. So I spoke with Cake yesterday.
• 46:11
  equity and boulevard and then chose boulevard just because they come from a real compliance perspective and with my former compliance background I just loved like how obsessed with compliance and accuracy they were.
• 46:25
  And they were really great to work with, literally just spin that up. I remember they told me I had to fill in this spreadsheet with details of like all the existing shareholders and changes in share equity. And I just couldn't bring myself to do it. And so I sent them a few documents. I'm like, can you please fill it in? Yeah.
• 46:44
  So you and I were talking about how bad we are at business admin. So thankfully, they were very nice and did it for me. Oh, my God. I love that. So that was, yeah, you have to have a share registry. Now, that's really important because what virtual does is they start to collect the money. So as they collect money, they consider that settled. They send a really big file over to Boulevard. Boulevard sets them up as shareholders, issues a share certificate and lodges that all with ASIC.
• 47:13
  And that's all done seamlessly. My involvement in that was literally just choosing the platform I wanted to go with and providing a little bit of information. And then outside of that, those two spoke together. And that process took about a week or so for that to occur.
• 47:28
  Then there's cooling off periods with investors. So you don't get the money straight away. Anyone who invests really early in the private offer actually doesn't have to provide the funds until the end of their campaign. When you do sign up to an offer, you've got a five day cooling off period. So the money, it doesn't come in immediately. And so there's basically three different, I guess, rounds of or tranches of money that you receive. The first one was amazing. It was like quite a lot of money. Yeah.
• 47:57
  Right. We've never had that much money in our account. We've been like running it, you know, 10K was our minimum, to be honest. There were times we definitely dropped below that, which was very stressful. And so, you know, virtual, there's effectively three tranches of payments. So the bulk of it's collected in that first one. And we were really lucky, like people were really honoring their payments. So we got a really significant bulk of that.
• 48:24
  upfront. And that was an amazing day. We were waiting for that money to land. What was it? It
• 48:31
  770k I should go back and look at it oh that is so are you refreshing your bank like are you being like is it in yet is it in yet or would did you have a certain time that you knew it was going to go we had we had a bit of an idea we thought it was going to be the next day but I had logged into the account to pay something and then I saw 770,000 in their bank I was like oh my gosh this is so exciting you take a screenshot
• 48:54
  did we take a screenshot? Oh, does that sound, that's so bad. Now I feel bad that we probably didn't. I probably did. And now I've probably deleted it. You can always just screenshot the, the date. Yes. Yeah. Like that transfer kind of thing. Like that's a pretty cool screenshot. We did a post with that. Anyway, that really funny weird song with the dude dancing.
• 49:17
  Oh yeah. I love that guy. I know. Like how it feels when your crowdfunding money hits the account. Oh yeah, I did see that. I did see that. Loved it. We were dancing around a bit. That felt great.
• 49:28
  For a business that's been running very tight, you know, 10,000 was the minimum, but it often dropped below that amount. Very stressful. So that was amazing. And yeah, so virtual continues to just collect the funds. I think at this stage, probably there's about 40 odd K uncollected. So that it's quite a small proportion of the overall raise. They feel that often there's about 3% of uncollected funds.
• 49:56
  funds or you could effectively call it bad debts. So what we're going to do now is Sian and I are going to start calling people. So they've been contacted quite a few times by virtual. We just thought we'll do a final touch and see if we might have a response personally. Yeah, but virtual really manages all of that process. And so our involvement is very minimal, but yeah, now we're just like
• 50:21
  It's so exciting because we've been able to start projects that we haven't been able to do and hire our marketing manager who I've been wooing for two years. Literally signed her contract today. So that is so cool. That's exciting. Congratulations. Thank you. And then on Sunday I did pay runs and Sian and I paid ourselves what we're actually worth in the market for the first time in three years.
• 50:51
  And so we've literally been working on the living on, working on, being paid the job keeper amount. So sub like 2000 max a month, including tax and super for three years. Oh my gosh. So this is the first time you're basically taking a salary. Yes. Through Pleasant State. How did you work out what you are worth in the market?
• 51:17
  Yeah. And so I was really conscious because we hadn't really been valuing ourselves or paying ourselves properly. That jump was going to be really difficult for us because our fixed costs are going to go up so much that impacts our profitability that there's a real discomfort around that. Right. And so I'm someone not being particularly money motivated. I knew that I would have a problem probably paying myself what I'm worth. Not only that, it can...
• 51:42
  I just wanted someone independent to come in and be like, here you are. This is what you're worth in market. Just so those conversations between Sian and I were easier to think if you've got two co-founders valuing yourself and agreeing what that looks like. Depending on your role can be challenging. So I engaged a really great team.
• 51:58
  HR company, we developed position descriptions for four roles and then I had a fifth assessed and they did an independent salary review. And then they came and presented it and sort of showed, you know, someone in that role with this level of experience versus a real expert. These are the amounts that they're worth.
• 52:17
  And then Sian and I went to lunch and we agreed, yep, these are the amounts for two of the roles and our graphic designer. So we increased her pay because the market's gone up. So it's a really great way to ensure pay equity in your business and also to explain to employees and justify that value. And then it came down to a negotiation between Sian and I. And then I was like, OK, Sian, what do you want?
• 52:41
  what it like what's the number and then we just discuss that I'm like okay cool and then I said all right this is based on these numbers this is what I want and then we also discussed once we introduce our ESOP probably reducing the cash component and taking some as ESOP just so we can reduce the cash I guess the cash LA burden on the company.
• 53:02
  Totally. Yeah, it's an interesting one because, yes, the cash burden is there, but it's so critical to pay yourself a salary so that you can go the long term without developing resentment or just burning out of the money fear.
• 53:20
  And then being like, fuck it. What's the point? I don't make any money out of this. And I say that because ages ago, like maybe two years ago on the show, one of the women we were interviewing, she had built her company to like $30 million in revenue over nine years, never paid herself a salary. Pandemic hits. Everything went to shit. And essentially, she thought her company was going to close down. And she was like...
• 53:42
  In a sudden instant, I realized I should have been paying myself as the priority this last nine years because you never know if your business is going to all of a sudden be hit by things that you couldn't have predicted. And so she was working towards an exit. I'm going to make the money then, like that kind of thing.
• 54:00
  But she was like, that's no way to live for nine years. She was like, now I can like take that pressure off myself. I can do all the things that I want to do. And I've got the longevity in me to keep going regardless of what happens. And it won't have all been for nothing. Yeah, that's a really good story and a really good reminder. Just a couple of notes on that one. You know, I speak about Chan and I only paying ourselves $2,000, but we were heavily reliant on our partners. Yeah.
• 54:28
  right? So they're the breadwinners financially. There's a great cost and opportunity cost. I would have been a partner at EY a really long time ago. So the amount that I've given up, even now my rate that I'm paying myself now is nothing compared to what I would get at EY. But I don't
• 54:47
  Again, not being money motivated is actually hard for me to pay myself because I don't, that doesn't drive me more. However, it's really not, it's not fair to continue to be so dependent on our partner for their sake, but also for ours. And I think as women, you know, we do really need to be independent and we do need to financially set ourselves up so that.
• 55:08
  something does happen to the company or your relationship that we can actually survive. And I think that there's a bit of conditioning around that and a level of, I guess, we feel that that's okay. But for me and my partner, it was a really clear negotiation over for this period of time. This is what it looks like. This is your role. This is my role. And
• 55:30
  when we get the company to a particular position, it's going to change fundamentally. So now, you know, we're in a position that he can probably stop working for a period of time and take a break. And so his ultimate goal is to not work, which he would love. I can't think of anything worse than not working. And I will be the breadwinner. And I like, I love that idea. Like, I'm super happy to play that role. And he he's really deserving of a break.
• 55:57
  Absolutely. Yeah. Shout out to all the significant others and the partners who are on the journey alongside founders and entrepreneurs. And obviously shout out to anyone who's doing it without that support because damn, that's, you know, on another level of impressive.
• 56:15
  Oh, 100%. Like Carl, yeah, and for Sean, Paddy, they have just been so instrumental in our success. I think there's a book around how the importance of having a house husband because that's how men have been able to be so successful. They have a housewife.
• 56:32
  And someone really has to pick up the slack. Carl, you know, he was driving me to podcast because I'm too tired to drive. He's telling me to go and have naps or go to sleep. He's like he's literally feeding me so that I continue to survive. Oh, he's your hype guy. 100 percent. And Sian had the exact same thing.
• 56:51
  And so, yes, I can't, I personally couldn't imagine, I couldn't have done it without him. That's for sure. And I communicate that to him all the time. And so for us, my half of the company is Carl's half of the company. So sorry, I've got one half and he has one half. And I've always been super clear about that fact.
• 57:13
  Love that. Shout out to Carl and Patty. How do we want to wrap this up? Any final thoughts, any kind of, you know, bits that you can, bits I say, but like insights, learnings, advice, anything you want to kind of share as a final pointer?
• 57:33
  Yeah, wow. I probably should have had some time to think about this one. Oh, you know I love an on-the-spot question. What I would say, we've had a number of people reach out to us around crowdfunding because it can seem like potentially the easier way to access capital. But hopefully I've demonstrated through these three sessions that
• 57:56
  It's a really big undertaking. It's a super rewarding one. This ability to allow our community and our customers and our employees to own part of our company has always been a really important value. And so that I would start with why are you doing this? I think there has to be a purpose and an intent that's really ethical. And what that also meant is the way that we approached it and the way that we valued our company was highly ethical. So we valued it fairly.
• 58:25
  with the view that we, like I really hope, and I can't promise that we're going to be successful. There's so many unknowns, but hopefully our past, you know, I guess performance changes.
• 58:35
  is an indicator of future performance on our ability to deliver. But the thing that now motivates me, because I'm not motivated personally by money, is how exciting that I, like, we had 77% of investors were women. Majority, look, this is anecdotal, but I reckon 95% to 98% have probably never invested before in an asset class like this.
• 58:57
  So we now have the opportunity to help women build wealth. Like how cool is that? And so that for me is super exciting. And so see, this is just another opportunity for us to give back and live by our values around really balancing people, planet and profit. And so that for me is super exciting rather than just lining the pockets of a really small few who aren't really value aligned. Yeah.
• 59:22
  The process was equally rewarding as it was unrelenting and challenging. And as I said, it's the hardest thing I've ever done. The only thing that got us through was our community.
• 59:35
  And this is also where I start. If you haven't invested that time in building your community, and I'm talking over years, not just months, we're talking years and you have demonstrated proven success in really rallying your community and you're relying predominantly on your community, so smaller sort of average investments to get you across the line, then I would probably caution people to seriously consider crowdfunding
• 1:00:02
  as a viable funding approach for them. Many people, it's not uncommon that they'll find a lead investor. We didn't have that through our crowdfunding, so we were really reliant on, you know, sort of a large number of people in our community to come to the table. Some people do have those larger ones lined up, but irrespective of how strong that community is, you'll have to work really hard if you don't have that community.
• 1:00:24
  I feel that the chances of success using this crowdsource funding mechanism is probably quite low and there's quite a bit of evidence already in that particularly in this environment that a number of businesses are not they're not even passing their minimum which makes them an unsuccessful campaign and that that was the case at the time we launched there were a number of companies that you know just didn't make it oh wow would you do it again
• 1:00:56
  Yes. I can't believe I'm saying that. But mainly because I, this for me, while it was so hard,
• 1:01:05
  It was still so much easier than the path we took going down the Impact VC route. Now, the reason was because our audience, those conversations were amazing. They were just so proud of us. They just really believed in what we were doing. And this approach was so values aligned for us to share value back with the people that had created it.
• 1:01:28
  I had a real disconnect with the other method because I never really agreed with this idea that
• 1:01:36
  you know, an individual would have too much influence or too much ownership in the business that wasn't values aligned. So this idea that we're democratising ownership of our business just really resonates with us as a company. And again, like just back to that point that we can allow women to invest in asset classes that they wouldn't typically do. We've helped educate them along the way. So that in and of itself was a challenge and a barrier. Yeah.
• 1:02:03
  But that's really cool because those women, hopefully they will consider this certain things like this in the future. So, you know, we've run crowd pre-order crowdfunding and equity crowdfunding campaign. In the first instance, I would definitely look to go to our community again if we have to raise. My strong preference is that we don't have to. So like categorically, if I can avoid it, yes. But if we have to, yes, I would do it again and we would go back to our same community.
• 1:02:32
  Love that. Love you. Thank you for coming on here. I just always love talking to you. You're a really deep sharer. You are not a gatekeeper and I really appreciate that about you. So thank you so much. Yeah. And thank you so much for supporting us. You did that in so many ways, June, and for sharing our story.
• 1:02:57
  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.
• 1:03:21
  And if you're a founder building an e-commerce brand, you can join our private network of entrepreneurs called Hype Club at femalestartupclub.com forward slash Hype Club. We have guests from the show joining us for intimate Ask Me Anythings, expert workshops, and a group of totally amazing, like-minded women building the future of D2C brands.
• 1:03:44
  As always, please do subscribe, rate and review the show and post your favorite episodes to Instagram stories. I am beyond grateful when you do that.
• 1:03:59
  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.
• 1:04:24
  And if you're a founder building an e-commerce brand, you can join our private network of entrepreneurs called Hype Club at femalestartupclub.com forward slash Hype Club. We have guests from the show joining us for intimate Ask Me Anythings, expert workshops, and a group of totally amazing, like-minded women building the future of D2C brands.
• 1:04:46
  As always, please do subscribe, rate and review the show and post your favorite episodes to Instagram stories. I am beyond grateful when you do that.