In ASSOB’s Raising Capital public seminars we spend a lot of time explaining why Seth Godin’s “Tribes” idea is essential to be implemented in a capital raising endeavour. “Tribes” looks at the development of niche groups which forms “tribes” – with or without you – and in a raising capital context there is value engaging these niche or affinity groups via a specially built capital raising platform like ASSOB’s.
People have a social need to believe and be part of “something” larger” whether it’s animal welfare, the green movement, software, apple products, tattoos, or raising capital.
These “affinity groups” or “tribes” from Seth Godin’s book can amplify the message that is essential for you to get out to prepare for raising capital .
So how many of these affinity group or “tribe” members do you need to raise the capital you are seeking?
Lets look at one example from the ASSOB Capital Raising Platform.
(Sorry cant give you the name due to Corporations Act restrictions while they are raising capital)
This “matter”, in the midst of capital raising, has 306 individuals following the matter. Together they have contributed $1,470,000. That means for this business raising capital every follower of their “affinity group” or “tribe” is worth $4804. So the old sayings “the more the merrier” or birds of a feather flock together” are highly relevant here.
So how many followers do you need to raise a decent amount of capital?
Years of monitoring successful capital raisings at ASSOB has delivered the following statistics.
$500,000 capital to be raised you need a minimum 100 of followers
$750,000 capital to be raised you need a minimum 150 of followers
$1,000,000 capital to be raised you need a minimum 200 of followers
$1,500,000 capital to be raised you need a minimum 300 of followers
$2,000,000 capital to be raised you need a minimum 400 of followers
However you can discount by 50% if followers are “well heeled”.
Many new ventures move so quickly, and have smaller start up funding requirements than previously, that traditional fundraising channels like Angels, Venture Capitalist and IPO’s struggle to keep within the time frames of the ventures seeking capital.
Thats why affinity groups of people close to the company are becoming more and more important. Networked groups of people with similar interests or motivations are often already engaged with your “story”. Communicating to people with an affinity to the technology or the business ensures that the story is portrayed with accuracy and truth. Followers familiar with the technology or entity can ask the right questions before investing. They can also do it a lot quicker and earlier in the venture funding cycle.
Last years winner of the fastest ASSOB raise, raised $1.5 million in 4 months from first embracing the ASSOB Capital Raising Platform. Many traditional funding sources find it difficult to equal this pace and yes sometimes one investor takes out the majority of the raising but our experience is from 11 to 30 investors are usually required.
If you want to get started gathering followers on the ASSOB platform then complete the form here.
ASSOB itself achieved a milestone this week gaining the 20,000th subscriber. Some of these “followers” will become your followers if you attract and engage them to your capital raising matter.