Why Crowdfunding During Lockdown Worked For Us
- Written by Alicia Drewnicki
- August 16, 2020
- 6 min read
We recently launched a crowdfunding campaign on Seedrs during lockdown and are proud to say we were overfunded and closed the campaign with £108,000. We spoke to our founder Vikesh about lessons learned about the crowdfunding process, and advice for other companies wanting to follow in his footsteps.
1) Firstly, congratulations on raising £108k. How does it feel to be overfunded again?
Thanks Alicia. Thrilled! It’s very humbling to know that so many people share a similar vision for the future of food, and want us to succeed on our journey. Aside from the investment pledges on Seedrs, the warm messages of support from well-wishers has been awesome.
2) Why did you go for a round of Crowdfunding as opposed to raising through other channels (i.e. VC, Angel, debt-investment)?
We raised our seed last year through a mix of angel investment and crowdfunding through Crowdcube. It was an amazing experience – we learnt so much, and found that crowdfunding was a great opportunity to:
– Meet investors that were passionate about what we were doing, that just weren’t on our radar
– Build a loyal community around our brand, that we could leverage to help us with all sorts – from additional fundraising to product development and more
– Shout about Honestly Good smoothies! We were lucky enough to be featured in The Grocer, local press and several other publications as a result
3) Why did you choose Seedrs over other platforms?
Two main reasons for us on this occasion. Firstly, as we’d previously raised on Crowdcube, it felt like it’d be great to offer the opportunity to invest to a potentially new audience. The second, we’ve seen a number of plant-based businesses raise only months prior on Seedrs (including The Vegan Kind), so we thought there may be an active community of like-minded investors that would be interested in our proposition.
4) Did you ever think about pausing the campaign or waiting until post-pandemic?
Absolutely. Initially, we were supposed to go live on Monday 16th March. And, well, that turned out to be the day lockdown began here, so we put a last minute brake on the plans. We quickly took the view that “business as usual” wasn’t in sight, and that we’ll need to make changes to the way we operate, to continue to serve our customers in these strange new times.
After a couple of intense months, hiring 8 more honestly good team members to help keep up with demand, we launched our campaign in May, with no real idea how things would turn out in such uncertain times. Within hours we started seeing our customers begin to pledge their support, and the momentum and confidence built up from there!
5) You’ve done crowdfunding previously on CrowdCube, what were the main differences between crowdfunding then, and now ‘in lockdown’ Can you give us some insight into what it was like?
In many ways, the mechanics were very similar. We learnt first time round that, no one likes to be the first to commit, but no one wants to miss out on a good opportunity either – and good is often the campaign(s) with momentum on the crowdfunding platform. And so, you never really know who is watching, and what may happen in the last 7 days or so – which makes it all the more a rollercoaster ride!
Specifically post-lockdown, we found investors were a little more hesitant to commit larger amounts, just due to general uncertainty in the economy, so we were far more reliant on our customers pledging smaller amounts. This actually turned out to be really helpful, as it sparked more-in depth conversations, and we learnt lots about how we can continue to better serve our community, what new features we should add etc.
6) As a business, how did the pandemic affect the supply chain side of things? Was it difficult to get fresh produce?
Immediately after lockdown was announced, this was certainly the case. We found suppliers on the whole were being very selective with who they would supply, so a lot of it came down to how strong your relationships were, as to whether you could get your veggies in! Thankfully for us, we work with several local suppliers, who we count as friends, so we were able to source the majority of what we needed. It did mean we had to be more flexible in our approach to production and menus, plan further ahead (with even less clarity), but we also met a bunch of new suppliers who we’re looking forward to growing with too – everything happens for a reason, and for the best I guess! I should mention too that in the initial weeks (and months), everything ran far from smoothly, but our customers were so understanding and supportive – it was amazing. Happy to say we’re now back to offering the full Honestly Good experience 🙂
7) How did you manage behind-the-scenes with keeping safe in the kitchen?
Not having a big site with lots of spare capacity, we had to get creative. We introduced stringent social distancing measures, and in some cases it meant where we previously would have 4 team members working in a room, there would now be just one. We were clear in that the priority was to ensure the safety of the team, with no compromises – in a strange way, social distancing actually bought us even closer together, having to think about how we can still work efficiently in the circumstances – and we’re actually more productive now than pre-lockdown!
8) You had a crowdfunding video predominantly set outdoors – for anyone that’s curious, can you reveal if this was this intentional and shot during the pandemic?
As we were planning to launch in March, we had shot the video early Spring. Our first crowdfunding video last year was planned, shot and edited within just a few days, and we improvised (a lot!). This time, we wanted to shoot in a couple of different locations, and it was nice to get outdoors as the days began to get a little longer. On both occasions, we were super lucky to have you on board to script, direct, plan, shoot, and the rest of it – can you believe we even got through so much in just one filming day?!
9) How has lockdown changed how you work as a team? Do you have an office?
We used to work from a couple of co-working sites across London, but that’s all changed now post-lockdown. It was strange at first, but we’re a lean, flexible team so quickly adapted to using zoom, and other ways to communicate. Whilst I often miss the buzz of being in an office environment, I think we’ve all found our own ways of staying motivated and energised at home – for me, it’s my garden setup.
10) In your opinion, what’s the hardest part of crowdfunding?
Crowdfunding is a full time job, so being sure to carve out enough time each day to respond to questions, post updates, etc can definitely be a challenge, on top of keeping the business moving day-to-day!
11) A lot of people who are new to crowdfunding may have no idea where to begin. How do you learn what steps you need to take? Were there any useful online resources or did you have any advice from mentors/friends who had done crowdfunding before?
I spoke to a couple of founders who had raised through crowdfunding beforehand, which was very helpful – I think though it can be a very different journey for different startups – depending on the size of your community, network, time of year, competition on the platform, recent raises etc – so many variables! I think just trying what works, and what doesn’t in the first few weeks was the best way to learn, and implementing those learnings in the final couple of weeks – test + learn still stands strong in my book!
12) What was it like not being able to meet investors face-to-face?
It was an interesting experience. I’ve always been a great advocate of meeting people face-to-face; the feeling you get (you could call it the “vibe”) when you know there’s a good fit, is difficult to replicate on a video call. Having said that, as it’s the same rules for everyone, I found that investors were really accommodating, and open to working in new ways. I think it certainly opened my mind to working with international investors in the future too 😉
13) Did you notice a reduced interest in investing compared to last year?
I think there was definitely a lot more consideration before investing this time round, and we saw a number of people reconsider their investment altogether, so it was a challenging time to raise in that respect. But, I’m delighted that we smashed our target, and have managed to grow the business 4x since we initially planned to launch – naturally I’m an optimist, but I feel very confident about raising our next round 🙂
14) What advice have you got for other food and drink entrepreneurs wanting to go through crowdfunding?
A couple of things we learned along the way include:
- Don’t expect that you can just switch on the campaign, and cash comes rolling in. You need to work for every £1 🙂
- Ensure you have an “anchor” investor – someone that’ll put in a minimum of 20% of your target, to help kick things off
- Have a campaign marketing plan! Ensuring you release news, updates, hold events etc throughout the course of the campaign is important to keep your community engaged
- Consider the time of year, in relation to tax (boring pont, but think it makes a difference)
- Be clear during the course of the campaign what your aims are – at what point are you raising awareness, and at what point are you going to focus on converting initial interest to investment?
Thanks so much for your time Vikesh and keep up the amazing work!