Investor acquisition

Investor acquisition is the practice of finding, persuading, and converting investors for a public capital raise, run with the methods of performance marketing rather than those of fundraising. In an equity-crowdfunding offering the investor is a customer with a longer decision and a higher price, so the work resembles a product launch: define the audience, settle the message, buy attention, and measure what converts.

The audiences, in order

Investors in a public raise tend to arrive in three groups, and the order matters because the cost per investor rises at each step.

1. People who already know the company. Customers, subscribers, pre-order holders, backers from a product-crowdfunding campaign, social followers, and the founders' networks. They convert first and cheapest, and their early investments are what make the offering look alive to everyone who arrives later.
2. People who care about the category. Enthusiasts for the product's space. They need a story rather than a pitch deck.
3. People who invest in startups as a habit. Fewer in number, reachable through the portal's own investor base and through paid channels built around investing. They read the financials.

Budget spent on the third group before the first has been fully worked is usually wasted.

The metrics

• Cost per completed investment. The number a raise is run on. Cost per click and cost per lead are diagnostic figures that say nothing about whether the round will fill.
• Start-to-completion rate. The share of investors who begin an investment on the portal and finish it. This drop-off happens on a domain the company does not control and is where most raises quietly lose money, so it is tracked separately from the traffic that produced it.
• Average check by channel. The cheapest traffic rarely writes the largest checks, so channels are compared on dollars raised rather than on investor count.
• Owned share. How much of the total came from audiences the company already had, which is the clearest measure of whether the years before the raise were spent well.

Constraints

Investor acquisition operates inside securities advertising rules, which differ by exemption: Reg CF restricts how an issuer may advertise the terms of an offering, Reg A+ permits broader advertising once the offering is qualified, and testing-the-waters rules govern what may be said before either is live. Attribution is a technical constraint of its own, because the handoff from a company's site to a portal on another domain breaks tracking in ways that are invisible until someone tests them with real events.