Meet The Founders: Honcho

Honcho is the UK’s first reverse auction marketplace for financial services. In 2018, they launched their first equity crowdfunding campaign on Crowdcube, raising over £800k from nearly 700 investors. Now, they’re back on Crowdcube have already smashed through their £700k target. We caught up with Founder and CEO, Gavin Sewell to find out more about their equity crowdfunding success.   
 
What attracted you to equity crowdfunding?
 

We’re a really big fan of crowdfunding, this being our second round of raising via Crowdcube. Crowdfunding for us sits as a very important element in our investment mix, alongside institutional investors and other private investors. 

Crowdfunding is unique in that it allows the general public to invest in innovative new companies like ours, where such opportunities would otherwise be unavailable. Having the opportunity to back companies that you believe in, right at their early stages, is unique and can develop a relationship between company and investor way deeper than you’d be able to via most other forms of investment.

Our crowd investors are really important to us in many ways. We ask them to test our new ideas about products, to test our apps in alpha and beta form before we launch them, to provide insight into new ideas that could fit our model, and so on. Our door is always open, and we hope that by being open to our investors we can grow an engaged group that will be ambassadors for honcho, helping us to get the word out!

Did you notice any differences from your first campaign to your most recent? 

The main difference this time around is that we had an existing investor base to call upon, whereas last time we really were starting from scratch. Our existing investors have helped us to make a fantastic start to this crowd raise, which in turn helps to attract new investors to investigate our pitch and consider investing.

The other main difference is that the depth of questions that we’ve been asked has increased. Crowdfunding has inevitably grown in awareness since we were last on Crowdcube, and with that so has the level of investment knowledge and experience of those getting involved. This is all great news for us, as we want to be open and transparent with our pitch (and indeed our business) and so being asked great questions helps us to demonstrate this.

Were there any resources or external support services you used for any of your campaigns?

Aside of the excellent Crowdcube team, we’ve had a bit of help with getting our press releases about the raise out to trade and regional media, but otherwise its been largely an in-house effort. Of course, a variety of lawyers and accountants have been involved at various stages of each campaign, but for the campaigns themselves it’s a full-on team honcho effort!

What do you think has been the key to your crowdfunding success? 

Since crowdfunding has gained in prominence and popularity, the number of organisations on platforms like Crowdcube and Seedrs has grown significantly. This means that not only is it important to make your pitch clear, compelling and engaging, but there is also a need to differentiate your organisation from everyone else raising. It seems that there’s a never-ending list of breweries and wellbeing apps raising via the crowd, which is great, but for those guys it must be a challenge to stand out. We are fortunate that in the insurtech space there aren’t many firms turning to the crowd at any one time. As a result of this we’ve been able to paint a compelling picture of the problem that we’re trying to fix, how we’re unique in our ability to fix it, and how our proposition is already creating a stir within the market – its no longer just an idea, we’re out there serving customers every day. 

I’d also say that the huge degree of transparency and openness that we’ve approached our crowd campaigns with has helped us. If you take a look at any of the discussions started on our pitch during our current round you’ll see that we’ve gone into extreme detail in our responses. This is something not seen on many other pitches, and we hope that it helps to build confidence in honcho with prospective investors. 

Undoubtedly, then, this has all helped us to be distinctive which in turn has hopefully translated into backing from investors.
 
Do you have any top tips to share with the community?
 

OK here goes:

1 – Be authentic. Investors want to know about the people behind the pitch, where your idea came from, and why you’re passionate about what you’re doing. They want to understand you! 

3 – Communicate, communicate and communicate some more! Whether its pitch updates, tweets, ad hoc videos, webinars, emails or calls with investors, be prepared to put a *lot* of time and effort into engaging comms. Stock answers or two liners really aren’t going to cut it. 

5 – Finally, take the time to embrace the madness. Crowdfunding isn’t for the faint-hearted and will eat up your life. Throw yourself into it, be ready to engage with prospective investors at all sorts of times of the day and night, expect the unexpected and enjoy the ride!

Be a Champion!

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