Campaign Success: Freetrade
Freetrade is a commission-free trading app who has successfully launched six campaigns on Crowdcube, raising nearly £20m. We interviewed Co-founder and CMO, Viktor Nebehaj to hear their Crowdcube success story.
Since 2016, you’ve launched an equity crowdfunding campaign every year. What keeps you coming back?
There are two main reasons. First off, it’s a great way for startups like Freetrade to raise the capital they need to pursue their goals. A corollary of that is it gives you a huge, built-in audience that has a vested interest in you succeeding. That’s incredibly powerful when you want to spread the word about your start-up.
When you launched your first two campaigns, Freetrade was still being developed. How important do you think it was to use equity crowdfunding at this early stage to validate the idea?
Extremely! Those early rounds of funding were really rewarding and let us know we were definitely on to something. As I said before, it also gave us this awesome group of people that have supported us along the way, helped us build a better product and spread the word about Freetrade.
Freetrade has gone from raising £170k in 2016 to nearly £7m in your most recent campaign. Has Freetrade’s approach to equity crowdfunding changed as the company has grown?
Not especially, no. The change in fundraising comes as you develop your product. People are more willing to invest in a successful product than an idea. We’ve grown to over 150,000 customers in about 12 months. That means more people are more willing to invest. It also means we need more funds to continue expanding and pay the costs associated with having a growing team.
How do you prepare for your equity crowdfunding campaigns?
It’s chaotic but a lot of fun! Ultimately, it’s about communicating in simple terms what your company does and the problem it solves. Equity crowdfunding itself is interesting because you get people investing with one-offs, but you also have this strong community of people that regularly invest in campaigns. I think Freetrade has done a good job at reaching both groups of people which is positive.
How effective has equity crowdfunding been for acquiring users (and talent)?
I actually joined as Adam’s co-founder after investing in the first campaign. I invested the maximum amount in that crowdfunding round. I met Adam afterwards, we got talking, and eventually, I joined him to build the product and the company. So equity crowdfunding has definitely been a useful tool for Freetrade. The excitement around it has been instrumental in us gaining new users and team members.
What would be your top equity crowdfunding tips?
Make sure you are properly communicating the problem you are solving, and that you have product/market fit. For us, it was providing commission-free access to the markets via a well-designed app. That may sound simple, but no one else in the UK was doing that. The other thing to do is to communicate with your investors and potential investors, well before your campaign. They are your community, and they will be of tremendous help to you in so many different ways, from feature testing to spreading the word.