Running Successful Campaigns on LendForGood

LendForGood is not the typical crowdfunding platform.

While it’s important to approach your campaigns like any other crowdfunding effort for maximum success, the truth is that we are different from other platforms. LendForGood is specifically designed to support entrepreneur organisations that help social enterprises grow.

On a typical platform, it’s really just up to the enterprise.

But on LendForGood, there are at least three key stakeholders, and we all work together to get the campaign fully subscribed: the enterprise, the intermediary and us, the platform. Understanding each role is vital to campaign success.

What Motivates Investors?

Potential investors can connect with a social change project or deal on three levels:

• The Process – they are excited about impact investing in general, as an approach to making a difference while making a financial return. Risk and interest rates are likely to be important to them.
• The Thematic – they care about a specific theme, for example female founders, or circular economy, or clean oceans,  more so (or in addition to) the process of impact investing. They will want to know exactly how the deal lines up with that theme and the details of how the enterprise makes a difference.
• The Specifics – they may or may not typically focus on this impact area, but they are inspired by the specific enterprise/product/founder/story. This drives a lot of angel investing, which is why it’s important for the team to be out in front telling their story. These people connect with specifics: they will be customers or potential customers of the product, they may have met the founders or just been really inspired by their story, they may have experienced or have a loved one who experiences the disadvantage the enterprise is addressing.

Note that these three levels directly correspond with the three key stakeholders outlined previously:

• The Platform LendForGood is building a community of people who are interested in Impact Investing generally;
• The Intermediary is building a community of people who resonate with their focus or thematic, and;
• The Enterprise is building a community of people who care about their specific product, approach, story and impact.

That’s why, in general, no one of us can get the best outcomes on our own: it is through our combined efforts that we will create the best result.

We will activate our existing lender community through our newsletter, social media and by hosting a Live Question and Answer session for every new loan. We strongly encourage both the Intermediary and Borrower to enthusiastically promote this session to get a good audience, which will help the campaign get off to a good start, one of the most important things for crowdfunding success.

 

Communications and Community Building

The best way to think about crowdfunding is as a community-building activity that results in capital.

As outlined above, we will share your offer with our existing community of lenders, promoting through email and social media, including by inviting all members to a Live Q&A with you.

The Intermediary should communicate with your existing community – people who know you and hopefully trust your endorsement – as well as reaching out to the wider community around the focus area you work in. This is especially important if you have a specific impact thematic such as Indigenous enterprise, female founders, circular economy, or a focus on a particular country or region.

Over time, you as the Intermediary have a chance to build up a community of lenders who share an interest in your focus areas and learn to trust your recommendations, making it easier and easier for them to join your deals.

The Borrower should also actively communicate with their community – including their customers – the opportunity to join them on their growth journey through this loan. Rather than see this as separate from their other activities, we strongly recommend involving their stakeholders such as existing investors, mentors and team members – in sharing and endorsing the campaign.

Some Borrowers may fear that this “uses up” their social capital in return for, potentially, just a modest investment, but in our experience, it in fact builds social capital. When people have a good experience making a small loan, and get repaid, they are more likely to participate in future loans, more likely to recruit others and more likely to increase the size of their investment, not less.

Remember that convincing someone to invest often takes more than 1 touch point before a decision is made. So you should consider how you can nurture leads before and during the campaign. Getting relevant introductions and endorsements can accelerate the decision making process, so look for opportunities to leverage your existing connections.

 

The “What Motivates Investors” section above is about why people care, but caring isn’t always enough to convince someone to open their wallet.
For someone to participate in a specific deal, it must match their own personal or institutional definition of “impact” and their personal or institutional sense of appropriate risk and returns.

 

While we have family offices willing and able to put 5-6 figures into a single deal, you cannot assume that existing LendForGood members will be willing to invest in any and all deals. It will need to match their impact interests and financial return requirements.

The Live Q&A

The Live Q&A session is a critical step in impact loan campaigns and an important chance to stimulate and capture early interest.

We host a Live Q&A session for our community – and any interested parties – on every new loan that launches, featuring a leader of the Borrower and the Intermediary who is endorsing them as syndicate lead.

The live call is a great chance to invite everyone to find out more about your fundraising plans without making any sort of direct pitch or hard sell.

Depending on your legal status, for many of our Intermediary Partners (those without a financial services licence) it is important you avoid any direct “advice,” such as that someone “should” participate in the loan, or making declarative statements of quality, such as “this is a great investment.” You should instead invite people to find out more about the goals and plans of the enterprise. You can share facts, such as that the enterprise is in a growing market with strong consumer demand, and is looking to raise $X at Y% interest paid out in Z months” etc.

The live call then is a chance to be more assertive. You can tell people they “should” come to the event, because it’s just an information session, and that they will hear “a great story from an inspiring social enterprise making a real difference,” or whatever enthusiastic language you want to use, without it becoming a “solicitation of investment.”

Once at the event, you and the enterprise present the situation accurately and share any information you think is relevant. The founder/leader of the enterprise can speak as enthusiastically as they feel confident doing in relation to their own business, as is typical for any founder pitching. All attendees have the chance to ask questions and the video becomes part of the information on the loan page. You will receive the details of everyone who RSVPed to follow up with.

In our experience, the more people interested in and who attend the Live Q&A, the quicker the loan fills up and gets momentum from day 1, so make sure you and the enterprise promote it!