Equity crowdfunding: examples

L'equity crowdfunding is a way of raising capital by selling shares in the company to online investors, who then become new shareholders. 

The real key to equity crowdfunding is that potential investors are to be found primarily in the customers or potential customers of the company itself and to be reached through appropriate marketing activities.

In this article, we will explore some of the Most successful equity crowdfunding campaigns: examples coming both from Italy and from an international scope. Through these examples, we will highlight how the winning strategies adopted and the determinants that led to their success were based on the keys we have just enunciated.

When to do equity crowdfunding

As we pointed out in thearticle devoted to the comparison between equity and lending, equity crowdfunding is a particularly congenial mode of capital raising for startups.

Why? Let us look at the reasons from two perspectives.

Investors' point of view:

• For would-be investors, participating in the equity crowdfunding of a startup represents an attractive Opportunity to invest in a high-potential business of growth at the best time, that is, when the valuation of the company is still low and therefore the cost of acquiring shares is low and future profit margins high-although there is no guarantee of such gains. 
• Becoming part of a project from the beginning is something exclusive, and this feeling can be a powerful lever especially in the case of highly innovative business or revolutionaries.

Business perspective:

• A startup has few sources of funding available, and equity crowdfunding is more accessible than traditional ones.
• There are no onerous obligations to investors.
• You do not need metrics and historical performance with which to prove your creditworthiness.
• Through an online equity crowdfunding campaign, one gains access to a network of contacts that can be useful in consolidating and growing the company.
• The corporate structure of a startup can be simpler and more flexible than that of a mature company.
• Equity crowdfunding is an innovative operation, requiring a willingness to innovate and acquire new skills and perspectives, which are easier to find in a startup.

This is not to say that SMEs and large companies cannot benefit, especially for more specific goals than generic growth, as we explained in the already mentioned article.

Where and how?

The platforms on which you can launch an equity crowdfunding campaign are many, and thanks to the European ECSP regulation are no longer limited to national borders: today European companies can campaign on any platform belonging to an EU member state. Some examples in Italy are Mamacrowd, Opstart, CrowdfundMe. Examples abroad, on the other hand, are CrowdCube, Lemox, Fellow Funders.

All platforms operate under the ECSP regulation, but each may have specific rules of operation: you can learn more in thearticle dedicated to equity crowdfunding platforms. 

We now come to the best way to learn How to do equity crowdfunding: examples of those who made it, with their strengths and strategies adopted. 

Equity crowdfunding green

Environmental sustainability and technological innovation for energy transition are two areas where equity crowdfunding is finding great success as a capital raising and marketing tool.

OliviAmo

OliviAmo is a sustainable agriculture project by the company OlivOne, which aims to transform fallow land into modern, environmentally sustainable olive groves that lower production costs and optimize soil and water use without compromising quality. The equity crowdfunding campaign on Opstart raised €200,000 to be used to build the plants. 

OliviAmo's communication presented potential investors with a simple, concrete investment linked to the land and an everyday product. The marketing campaign focused heavily on empathizing with the themes of Italian excellence, the environmental sustainability of the project, and support for an economic sector that is important to the Italian economy, but in difficulty due to both economic and environmental causes. Other important levers were the growth data of the world olive oil market, the possibility of generating profit also thanks to the sustainability credits produced by the absorption of CO2 from olive trees, and the goal of starting to distribute dividends as soon as the innovative startup status is passed.

It is also very important to point out that since before the start of the equity crowdfunding campaign OliviAmo began to create a community around the project and to gather not only interest, but also financial support and land deals, to present themselves to potential crowd investors with concrete premises.

Glass to Power

Glass to Power is a Milan-based startup that in collaboration with the University of Milan Bicocca has developed and patented Luminescent Solar Concentrator (LSC) technology to create transparent photovoltaic windows that can generate electricity for homes by integrating into the architecture of buildings in a functional way. With the equity crowdfunding campaign on CrowdFundMe, the startup raised nearly 2.5 million euros and later started the path to listing on the stock exchange through an equity campaign of the type crowfunding listing On Opstart. 

The main levers for investment were the project's high level of technological innovation, the authority and network conferred by the university setting, the positive impact on the energy transition, and the presence of a patent.

Green Energy Storage

Another company that benefited from holding a patent for its technology and from the support of a university was Green Energy Storage, a former innovative startup that is now an established company, which developed together with Harvard an organic storage system for renewable energy based on a molecule that is obtained from plants. The project has raised more than 2 million euros in two equity crowdfunding campaigns on Mamacrowd and has taken off by also taking advantage of European and Italian institutional funding.This experience allows us to emphasize how the best long-term financing strategy Is the one that integrates multiple sources of capital.

Real estate equity crowdfunding: examples

Although the preferred alternative type of capital raising in the real estate is definitely lending crowdfunding, there is no shortage of examples of successful real estate equity crowdfunding.

Gumpab

Gumpab Ltd. is a startup that aims to reduce the environmental impact of real estate by doing eco-friendly building regeneration and digitizing the buying and selling and management processes as much as possible. Not only that, the startup also aims to connect aspiring real estate investors and property owners. After a lending crowdfunding campaign of about €2 million, by the end of 2023 Gumpab had raised more than €1.3 million in equity crowdfunding on the Mybestinvest portal.

Gumpab leveraged the trend of green homes and two desires that are especially prevalent among the younger generation: to invest in real estate while not having a substantial income on hand and to reduce the environmental impact of one's actions and contribute to the preservation of the planet. Environmental values, in fact, have been at the forefront of the company's communication. The key aspect of this company's equity crowdfunding operation, however, lies in its ability to leverage the community already created by the previous lending crowdfunding campaign to turn those early investors into loyal supporters ready to become partners.

Urbana Social Cooperative Society

Urbana Società Cooperativa Sociale, on the other hand, is a Vicenza-based social cooperative registered as an innovative SME that designs and invests in innovative and energy-saving renovation works. To finance the City Campus project, a widespread university campus in Vicenza obtained from the redevelopment of two existing properties, the cooperative conducted an equity crowdfunding campaign on the Ecomill portal raising €597,700 with the participation of 165 subscribers.

Urbana's campaign benefited from the support of Banca Etica, which was certainly an encouraging element for investors, but it also focused its communication heavily on the green aspects of the project and the added value it will bring to the local community, a privileged interlocutor of the investment proposal. Not only that: it is always important in any marketing operation to emphasize the elements of uniqueness of the proposal, and Urbana presented itself as the first cooperative to use the crowdfunding tool, thus as a pioneer open to innovation and a possible model for other similar entities.

Equity crowdfunding for services

Equity crowdfunding also sees numerous examples of success in the area of companies that offer not products or technologies, but innovative services.

Two italian examples very well known are Mr. Bill and Winelivery.

Mr. Bolletta

Mister Bolletta is a free app that selects the best gas and electricity rates and creates buying groups to enable users to save money on their bills, while also offering continuous monitoring of market proposals over time. The service also relies on Renewable Energy Communities, providing access to energy from photovoltaic plants. The project was part of an energy market that has gone through major changes and increasingly urgent needs for consumers to save money. The 350,000+ equity crowdfunding campaign aimed to gain visibility and create a community, leveraging hot topics such as the energy crisis, energy costs, and energy transition, but also the promise of simplification of an onerous task.

Winelivery

Winelivery is the now well-known alcohol home delivery service, which after launching in Milan in 2016 has made three equity crowdfunding campaigns on CrowdFundMe, raising about 2 million euros to support what has since turned out to be staggering growth. Winelivery designed a pop and engaging communication campaign, combining a quality image to present itself as a "home wine shop" with a friendly face to present itself as a service for everyone, from connoisseurs to friends gathered for a house party. Moreover, the service has become part of the wave of at-home offerings.

But Winelivery also has another peculiarity: after its experiences with equity crowdfunding, it has decided to raise more capital through a SAFE, a financing tool of U.S. origin that in Italy is regulated by the Participative Financial Instruments.

Fintech equity crowdfunding: examples

The tech sector is another in which equity crowdfunding is very successful. Let's look at three examples from a specific subcategory of this booming sector: the fintech world of technology-based financial services.

Revolut

Revolut is the UK-born financial app that offers digital banking solutions through extremely user-friendly software, with very low costs and innovative services that quickly attracted a very large number of users. Revolut turned to equity crowdfunding when it was already on the verge of becoming a unicorn, launching a campaign on Seedrs and involving its own customers: the result was over 40,000 expressions of interest from Revolut users, which would have translated into 22 million in collections if the law had allowed it. In addition to the actual 5.3 million, Revolut brought home a new wave of customers and increased the loyalty of old ones.

Qonto

Qonto is another unicorn fintech, this time French, which offers financial management solutions for small and medium-sized businesses and professionals. The relationship, in this case, is B2B, but the dynamic was the same as in Revolut: Qonto decided to increase the involvement of its customers in the business, opening an equity crowdfunding campaign on Crowdcube with this specific target. The raising reached €5 million in just a few hours.

Monzo Bank

Finally, Monzo Bank is another example of a fintech unicorn from the United Kingdom, which differs in part from the previous two because it began using equity crowdfunding at the startup stage. As one of the first online banks in the world, it pioneered a model that is prevalent today and was able to take advantage of the big news. From that first raising of "only" 1 million pounds Monzo has grown to a Equity crowdfunding campaign of as much as 20 million pounds on Crowdcube after only a few years, thanks to the building of a community highly engaged in the idea of an accessible bank, made by people, for all people.

More examples

Let's add more examples from additional sectors: e-commerce and food&beverage.

Baladin

Baladin Srl is a leading brewery producing Italian craft beer through a direct agricultural supply chain. The equity crowdfunding campaign on Mamacrowd raised about €5 million from 2,196 investors in just a few days. The company's goal was to raise capital to support its four-year development plan (2024-2028). This is the example of An established company using equity crowdfunding to leverage its community of customers, fans, partners, and other stakeholders to raise capital and build a shared growth path. The brand built a marketing operation based on the claim Beer Revolution, presenting itself as an "ambassador of Italy's brewing heritage" and focusing on the values of Italian excellence, sustainability and personal passion.

This successful example is reminiscent of that of the Scottish brewery BrewDog, which we discussed extensively in a dedicated article.

Mysecretcase

Let's completely change scope by talking about Mysecretcase, a startup that opened the first online store specializing in sex toys dedicated to women, and then expanded its offerings to all genders. The project raised capital through Traditional financing (business angels, funds, private investors) and equity crowdfunding in parallel, achieving resounding success. The communication to support the capital raising focused on a mainly female target audience, but not only, inviting everyone to a challenge against sex taboos and both female and male stereotypes. 

Vestiaire Collective

We close this long roundup of success stories with Vestiaire Collective, a marketplace for second-hand fashion that we also discussed in a Webinar on building community through crowdfunding. Another French unicorn, this company decided to use equity crowdfunding at the height of its success, to give a boost to the path to listing on the stock exchange through the involvement of the most loyal customers. The whole operation, therefore, focused precisely on connecting with the community. Nearly 3,000 small investors participated in the campaign, contributing more than 3 million in total.

The reasons for success

From the analysis of Italian and international cases, some key recurring elements emerge for a winning equity crowdfunding campaign:

• Innovation of Product: innovative solutions in traditional areas that respond to concrete market demand.
• Effective Communication: Clear and engaging storytelling helped create an emotional connection with potential investors.
• Community Involvement: Turning customers or fans into investors increases a sense of ownership and facilitates successful fundraising.
• Timing: Successful campaigns have been able to intercept emerging trends, positioning themselves as pioneers in their respective markets.
• Sustainability and Values: Projects with a positive impact on the environment or with a strong values storytelling gained more acceptance.
• Reward: All companies have designed custom-built rewards for the target customers (or other stakeholders involved) to be used as immediate and concretely usable gratification for the investment.
• Marketing Approach: All companies have approached the crowdfunding campaign first and foremost as a marketing operation, rather than a financial one.