Investor rewards
A Guide to Investor Rewards
Rewards and incentives are an effective way to establish a strong connection with an investor audience.
Many companies offer an incentive or a reward to investors to encourage them to invest early, invest a little more than what they originally intended or as a tool for lead generation.
Rewards are not compulsory for your campaign and they are available to investors during the CSF Offer campaign only (i.e. they don't apply to the EOI campaign).
Investor Rewards
A Guide to Investor Rewards
Rewards and incentives are an effective way to establish a strong connection with an investor audience.
Many companies offer an incentive or a reward to investors to encourage them to invest early, invest a little more than what they originally intended or as a tool for lead generation.
Rewards are not compulsory for your campaign and they are available to investors during the CSF Offer campaign only (i.e. they don't apply to the EOI campaign.
IN THIS ARTICLE
Reward inspiration
Your limit is your imagination but think critically about what you want your rewards to achieve, such as:
Brand awareness: will the investor use the reward as a conversation starter?
Sales generation: will the reward encourage investors to purchase your products or services?
Loyalty: will the reward encourage investors to stay as active participants in your network?
Some great reward examples are below:
Investment rewards inspiration
D2C inspo:
Discounts
Invitation to focus sessions, beta testing of products
Dinner with the founder
Naming rights to the next product
Your name on a bar stool
B2B inspo:
Partners get a plug in your communication/newsletter
Partners who invest X amount have the opportunity to join your CSF advisory board
If a 'future' supplier distributor comes on board as an investor, they get X discount on wholesale product prices for X months based on a minimum investment of X (and can tier this)
The opportunity to 'co-brand' or collaborate with your brand
How many reward tiers to create?
The first step is to download your EOI list and divide your EOI responses into interest levels to help you determine what level your rewards should sit at. Using the example below, the goal is to try and nudge people into a higher investment bracket, so we would consider reward levels at:
$500 - A nominal reward (like a tote bag/ keyring/ discount)
$1,000 - All prior rewards + company merchandise (ie a 'limited edition' t-shirt or exclusive run of product, where you only need to consider making a few of these products)
$2,500 - All prior rewards + a bigger product discount
$5,000 - All prior rewards + a 'sample pack'
$10,000 - All prior rewards + exclusive access to an experience (ie an investor dinner/tour of the facility)
Key tip - make sure your reward tiers line up to your share price. This is easier when your share price is $1 (like below). If your share price is 99c, you may need to round down (always round down).
Do 'early bird' rewards work?
Getting momentum in the first 24-48 hours is a real advantage to your campaign. To help incentivise investors to 'invest early, some companies consider offering 'early bird rewards' to those who invest in the 'private phase/first 48 hours'. This might be something as simple as:
$1,000 - double rewards (first 48 hours)
$5,000 - the above, plus a 'free product kit' (ie limited to the first 50 people)
A word of warning
Rewards offered in connection with a CSF offer may risk coming within the ambit of the prohibition on financial assistance i.e. under the law, a company cannot "financially assist" a person to acquire shares in the company.
There is a spectrum of risk to consider with your rewards. For example:
A consumable product or activity (such a t-shirt, case of beer or founder meeting) would be at the lower end of the risk spectrum
A product or service discount (such as a percentage lifetime discount on product) would be at the medium end of the risk spectrum (with the higher the discount, the higher the risk)
Cash-back, an item readily redeemable for cash, a gift of shares or loan for shares would be at the high end of the risk spectrum
What does this mean in practice?
You cannot include rewards that are monetary in value - e.g. 'Invest $1,000 and get $200 back in cash'
You cannot include extra shares as rewards - e.g. 'Refer 3 friends and receive an extra 500 shares'
These could be considered financial assistance which is unlawful.
Have a look at other campaigns live on the Birchal platform now for more inspiration.
Creating the reward options in your Offer campaign
You'll require the following information to setup a reward when setting up your offer campaign:
Minimum Investment Amount eg $250
Reward Title / Name (recommended less than 50 characters)
Reward Description (recommended less than 150 characters)
Reward Image (min 300px by 525px). The image must render well when automatically resized to a landscape layout, which is 150px by 180px. You can see how the same image below gets rendered differently throughout the platform
Reward example (300 x 525 px) - DEFAULT SIZE
This image is shown during the investment process
Reward example (150 x 180 px)
This image is shown on the Offer landing page
Do you have special T&Cs for your rewards or additional information to share with investors?
Rewards offered in connection with a CSF offer may risk coming within the ambit of the prohibition on financial assistance i.e. under the law, a company cannot "financially assist" a person to acquire shares in the company.
If you have special T&Cs associated with your rewards, you should state these clearly.
For example, think about:
If you offer a "lifetime" discount - what does lifetime actually mean? Often companies will limit this for so long as the investor holds shares in the company or for a period of time such as 5 or 10 years
Do you have a fair use policy
If there is not enough room in the "Investment rewards" card on the Birchal platform, you can upload a separate one-page "Investor Rewards" document to the Investment Documents section, like this:
Investors can see your reward cards & reward info document via the CSF offer 'invest' page
Investors can see the available rewards when they reach your Offer 'Invest' page, and make a selection on what they might like to receive when they confirm their investment.
Delivery of rewards
Companies are responsible for covering the creation, cost and delivery of their investor rewards.
We suggest beginning the delivery of your rewards once the settlement process begins and the shares have are in the process of being issued. If you think it may take a while to send rewards to your investors (ie 1-6 months after the raise), it's important to give investors the expected delivery timeframe in your investor communications.
Be mindful of logistics with rewards - e.g. if you offer t-shirts, you'll need to consider investor t-shirt sizes or if you're posting out physical rewards, you'll need to consider shipping costs. Sometimes it's better to reserve physical items for the higher tiers to make it meaningful.
Finding reward data
Once your campaign is complete, you will be able to download a list of investors who selected a reward from your Birchal profile. You'll see this in your Offer 'dropdown' reporting list. Here you'll find information about the investor's name, home address, how much they invested and which reward they've selected.
