ONLINE CAPITAL RAISING Q&A WITH ALYSSA BARRY
Recently, Alyssa Barry took part in a conversation with Darren Marble, Co-Founder and CEO of Issuance, a SaaS capital-raising capital platform in the US. Darren and the audience had a few questions for Alyssa, here’s what she had to say about online capital raising.
How do companies stand out in this market?
Alyssa: To stand out, I think one of the misconceptions in the online capital raising space, is that if you get listed, investors aren’t just going to naturally find you. We hope that through momentum this will happen, but similar to private markets, there has to be a marketing exercise to drive traffic and have investors convert. The biggest thing in this market is the abundance of quality we’re seeing today. This is impressive and demonstrates the importance of really getting that story right and being authentic. It is so important to be clear and concise. Investors should be able to arrive at your landing page and know what you’re all about in 30 seconds or less. It’s really about building that storyboard with clearly defined calls-to-action and a roadmap to create that “FOMO” for investors to lean in to. Also, always leverage your networks.
What is meant by “authenticity”?
Alyssa: I love getting the story behind the companies themselves – getting to know the founders and visionaries and their motivations for starting and building their businesses. I had a five-year pivot in my career as a shareholder activist, which showed me the importance of making investments with very solid management teams with strong growth prospects, as well as good governance. Investors want to know if this will be the team to guide things successfully to the finish line. Why are these founders so passionate? We should be able to feel their ambition come through and believe in them.
What are easy ways for companies raising capital?
Alyssa: Making sure to take the time to tell a great story. Earned organic media is also a big component. At irlabs, we leverage our PR and Media team, who have obtained fantastic coverage for our clients! Media coverage is great to share with your investors and followers. Earning Tier 1 media that then generates traffic to a landing page and facilitates investors to keep going and learn more. This highlights the importance of a solid story and plan however, as companies newer to the game who haven’t developed that comprehensive roadmap, earned media wont really achieve much or drive momentum.
That leads us right into our next curiosity - what are mistakes to avoid for companies raising capital?
Alyssa: Sometimes, companies are trying hard to save money on the marketing side, and we see the writing come through as very academic and less connecting with investors through storytelling. Another common mistake is bad pitch decks! I get to the end of a bad pitch deck and I still don’t know what the opportunity is or why it’s ideal for me. How is this company going to make me money at the end of the day? I should know that answer. One last mistake I will share is around landing page experience. We really want to eliminate clicks for investors, and direct them to click “Invest now”. Are you driving people to the right place? Those are the key mistakes in my mind.
What happens after an investor onboards?
Alyssa: That ongoing communication is so crucial! Once they onboard, money is in the bank, there’s a moment to celebrate — but understanding really doesn’t end there and it’s important to make sure that ongoing communication is happening. I think that is something that often gets overlooked because of that extra care and effort. We would like to hope that investors stick around forever but we need to make sure they believe in us before and while they are an investor. A lack of transparency or updates can really shake things. We want them to stay, especially as companies go public. Ways to spend time with investors could be through investor days, investor calls, frequent email updates – creating that open environment for the investor base is crucial.
You mentioned “frequent email updates” – are we talking monthly, quarterly?
Alyssa: The more, the better, but it does require a balance. Monthly updates are typically fine, though they do need to be important and drive value. Video updates are also easy to do, as long as they are vetted by an investor relations or legal team. The frequency of updates will also vary based on how large an investor base is.
Founders should think about ways to target different types of investors. What are the strategies that have seen irlabs’ clients secure bigger cheque sizes?
Alyssa: First of all, compliance is crucial – receiving legal advice and ensuring everything is onside before conducting reach outs. The “larger cheques” will require due diligence and may want to “date” you for a little while before they make an investment. They want to build trust and get to know you. On the flip side, making sure data is strong, being prepared to answer questions and share the value proposition and financial model are crucial. I will not reach out to my community unless these are all in order for investors. Putting yourself in conference situations is amazing. Also, engaging actively on LinkedIn, both from a networking side but also providing updates. Think about trying to write your content to your target group.
What should companies consider to get ready to go public?
We just talked about having the house in order. There are a lot of questions and discussions on best path, exchange, who are my advisors, so much goes into making these decisions and then there’s timing. To prepare for going public, I would strongly advise setting aside 9-12 months. It will take time to consider processes, prep all of the documentation, go through the process with the exchanges, and ensure the value proposition is truly there. Timing is so, so important here. There are many companies that went public too early and it is now hard for them to raise capital through this economic environment. Touching on the governance piece, we have a lot of private clients with advisory boards, which gives an opportunity for them to date the board, and understand who is weighing in and ensure that governance is strong for when going public.
Looking to watch the session? You can access it here. Should you have any questions, please contact us at happyinvestors@irlabs.ca.
