Small Business: Equity crowdfunding - Brianne West, Ethique

Brianne West, founder of Ethique.

This week, small business editor Caitlin Sykes talks to business owners about equity crowdfunding.

Brianne West is the founder of Ethique, which ran an equity crowdfunding campaign in June last year. The firm raised its maximum target of $200,000, with 138 investors taking a 16 percent stake in the sustainable beauty bar company.

Why did you choose equity crowdfunding as a way to raise capital for your business?

Since I began the business I've always run a lot of our decisions past our customers - things like what colour logo, or what scent do you like best? - and that's always elicited good responses. I thought having customers who are really loyal and in tune with your brand is a hell of an asset so why not extend that? I really liked the idea of growing a successful company and bringing along a whole lot of people who wouldn't normally have an opportunity to invest in a business, so you're making a difference not just for the planet but for people too.

What were some of the practical things you learned about running a successful campaign?

I actually think we started too late. We'd been thinking about it for a long time, but then one day I just said 'sod it, let's do it', so we only had three weeks to launch. I don't recommend people do that, because we didn't have a lot of time to build momentum.

But we did it, and we followed a lot of PledgeMe's suggestions. For example, ten days before launch we started producing and publicising a different reason each day to invest in Ethique. They went out through social media and people were sharing them, although it wasn't a raging viral success. We also did two newsletters in the leadup to the campaign and one during. I didn't want to annoy people to death, which is why we didn't do more.

Another thing I did was chat to a few other companies that had run successful campaigns. Yeastie Boys in particular gave us some good tips. One thing they suggested, which I didn't do but I'd recommend, is setting up a separate newsletter database for your campaign so people who are interested in investing can hear more about it, but people who aren't don't have to.

Aside from the time pressures, what other difficulties did you encounter during the process?

I don't have a business degree, and before this I didn't have any investment experience or even know any of the investment lingo. So learning all that in a short period of time and putting together an investment memorandum was a massive learning curve. Although I never felt out of my depth, it did feel at the start that I needed that previous experience because it all felt a bit too hard. But the PledgeMe team were amazing; they put a lot of their time on the line to help us across it. You're coached through it, so you don't actually need to know everything from day dot, but it is important to take the process seriously and be clued up about your legal obligations because you're playing with a lot of other people's money.

Now you've raised the money, what impact has dealing with your much larger shareholder base had on the business?

That's something my team had concerns about prior to the process, but actually it's really easy. I make it a priority to keep connected to this group of people and I enjoy having that network, which is an amazing resource in itself. On our shareholder register we've now got a couple of cosmetic chemists, some business people, an economist, a professional investor and people from all over the world who are doing various things and they're all very useful. And that's not just in terms of their skill base, but just for gaining an outsider's perspective on issues you're facing in the business.