Marketing to raise capital

Donna Luckman • 14 May 2020
Author: Sara Howard
Contributors: Martin May

A share offer document is a proposal for prospective investors or co-operative members. In this article we discuss different ways to market your share offer. We also look at how to reach your target audience, and persuade them of your project’s potential.

Who is your target market?

The first step in marketing your share offer is to decide who your target market is. Community renewable energy projects can attract a broad range of investors or members. As well as local residents — who are concerned about the impact of climate change or who want a stake and say in local projects — you may also attract investors from outside your local area who share your values, mission and vision.

Do you have an AFSL?

The Corporations Act 2001 requires that people conducting the business of providing financial services hold an Australian Financial Services Licence "AFSL". This includes, but is not limited to, providing investment advice on a financial product, such as a share offer.

Community groups are unlikely to have an AFSL. Potentially community groups could align or pay for services to a business that has an AFSL. However, the cost of this service will need to be built into the relevant business case.

Potentially, a share offer could be made without an AFSL, provided ASIC have approved. In this scenario, potential investors could be made aware of a share offer, however under no circumstances could any advice by provided to potential investors. Specific legal advice must be sort in relation to this approach, along with approval from ASIC.

How will you find them?

Building and managing a database is key to the success of your share offer marketing strategy. You can use a simple spreadsheet or more sophisticated database software program. You’ll need potential investor’s names, emails, addresses and phone numbers. Hepburn Wind started its mailing list with 1,000 names at a street stall in Daylesford. It now has more than 6,500. Here are just a few ways to add names to your project’s list:

  • Hold a street stall: As part of your initial community engagement you’ll probably have information booths at local events or markets. Encourage people to sign up for more information if they're interested in the project.

  • Use your website: You'll need a website to provide more information about your project. Initially this could just be a landing page, which you can set up quickly and cheaply through a blog program such as WordPress. If you have a more sophisticated site design, add a ‘subscribe’ button on the home page – and every other page. Encourage people to sign up for the latest news through this website. Capture their email addresses, and send them the occasional update, but don’t overdo it or you’ll have a lot of unsubscribers!
  • Run a survey: As part of the first phase of its share offer, Hepburn Wind asked friendly organisations such as the Alternative Technology Association and Friends of the Earth to send out a short survey asking their members if they'd be interested in investing in that type of project. Those who were went straight onto the database.
  • Join forces with other climate change groups: In one of the final phases, Hepburn Wind offered to donate $25 to local climate change groups for each of its members who also joined Hepburn Wind. They received a few hundred extra members, and the local groups were happy with the additional funding.
  • Local press: Use any newsworthy event, from planning approvals to turbine orders, as a reason to send a press release to local and state media.
  • Paid advertising: Baywind, the UK’s first co-operative wind farm development, paid for adverts in national and local press, as well as a local mailshot. Its first share offer was so successful, it could buy buy two turbines immediately, instead of one as originally planned.
  • Public forums: Set up stalls in order to meet people and add more names to your list. It’s worth looking for a ‘celebrity’ endorsement, as this opens up a new network of potential members. Hepburn Wind asked Rob Gell, former weatherman and climate change champion, to present at a local forum. This gave the project even more credibility and press appeal — both locally and in the Melbourne boardrooms.

Share offer strategy

Be prepared to launch a series of share offers and make sure you set a deadline for commitment.

Remember, money doesn’t come in on a regular basis. Some people will jump on the offer straight away, and then it may go quiet until the last minute, when people suddenly realise they could miss out. Set the deadline sooner rather than later, because If the due date is too far away or you don’t keep reminding people, they won’t act on it.

Here are some tips for marketing your share offer.

  • Develop your strategy around a series of share offerings.
  • Set a deadline for signing up each time, giving people up to 12 weeks to consider. And then remind them regularly.
  • Create a clear call to action, and make it easy to join.
  • Set up incentives for members to recommend the project to their friends or add them to your database.
  • Target local residents as well as the wider community — anyone who's interested in sustainable energy is a prospective investor.
  • Target high net worth individuals.
  • Keep your marketing costs low by asking for pro-bono or local business support wherever possible, including web design and hosting, print and design, database management and the cost of local events.
  • Be aware of your obligations — companies have different share advertising regulations, and you need to provide a simple opt-out for any regular email contact.
  • Link up with climate change and sustainable energy interest groups to tap into their database of members.
  • Don't give up. If you don't get what you want in the first round, keep going. Capital raising takes perseverance, new ideas and commitment.
  • Remember that your best prospects are your existing members or shareholders. Make sure you keep them informed and stay in touch.