Raising Your Seed Round: Food and Beverage
Raising for an FMCG startup is notoriously difficult, here's our top tips for a food and beverage seed round
Raising equity investment is no longer limited to private meetings with angel investors or lengthy venture capital rounds. In recent years, crowdfunding platforms have emerged as a legitimate and accessible way for startups to raise capital from a broad base of backers. Whether you’re launching a consumer product or scaling a tech brand, these digital-first services offer a structured route to secure funding while building community support. How do they actually work and are they right for your business? Read on to find out.
Crowdfunding platforms are digital investment marketplaces that allow startups to raise capital from a large number of individual investors, often referred to as the “crowd.” Unlike angel networks, which rely on high-net-worth individuals, or institutional brokers, which cater to larger strategic investors, these platforms focus on accessible minimum investments, sometimes as low as £10, allowing thousands of people to back a startup in exchange for equity.
They are distinct from platforms that focus on donations or rewards. Instead of offering early access to a product or a thank-you gift, founders using crowdfunding platforms are offering shares in their business. These platforms are classified by ThatRound as a type of fundraising service, partners that facilitate access to retail capital without investing directly themselves.
Equity crowdfunding allows startups to raise investment by offering shares to a broad base of retail investors through an online platform. Unlike rewards-based models, investors receive equity with the expectation of financial returns. These campaigns often start with a lead investment from angels or funds, which helps build early momentum before opening to the wider crowd.
Launching a campaign on crowdfunding platforms is a structured process that typically begins with detailed preparation. Startups collaborate closely with the platform to develop all necessary campaign materials, including a comprehensive pitch deck, a compelling promotional video, a clear business plan and robust financial projections. This preparatory phase is essential and can take several weeks to complete, depending on the complexity of the raise and the readiness of the business.
Before a campaign is made public, most platforms require startups to secure a significant portion of the investment in advance. Most platforms require 40–70% of the funding target to be committed before launch. Securing these early commitments is critical, as it signals to other potential investors that the opportunity has been vetted and supported by credible backers.
Without this momentum, a campaign may struggle to gain traction when it goes live. Once launched, the campaign is promoted to the platform’s base of investors and often publicised via social media, newsletters and earned media.
The fundraising window typically remains open for somewhere between 30 and 60 days, giving startups a limited but concentrated period to attract investment. If the target is met, the platform proceeds to finalise the legal documentation and collect funds from all participating investors. The startup then issues new shares in exchange for the investment received.
Importantly, all equity crowdfunding platforms operating in the UK are regulated by the Financial Conduct Authority (FCA). This regulatory oversight ensures that investor protections are in place, including disclosure requirements and standardised risk warnings. Startups must meet due diligence criteria to be approved by the platform, which enhances investor confidence and supports the overall integrity of the fundraising process.
While crowdfunding platforms can be an effective way to raise investment, they are not suitable for every business. Startups that succeed on these platforms often have distinct qualities that appeal to individual investors.
A strong consumer-facing brand is key. Startups with a clear identity and an engaged customer base are more likely to generate attention and investment. This is particularly true for companies with existing social proof, such as customer reviews or media coverage.
Having a product already on the market, or close to launch, also improves campaign performance. Retail investors look for traction, whether in the form of early sales, active users or market interest. Tangible progress helps build trust and signals execution capability. An investor-centric marketing strategy that positions crowdfunding investors as future customers post-raise can also help maximise the long-term value of the campaign, a tactic many successful startups embrace.
Lead investors or anchor commitments play a vital role in building momentum. Many platforms require some capital to be secured before launch, as this early backing encourages wider participation. This reinforces the idea that startups which do well on crowdfunding platforms often see it as a complement to other fundraising efforts and not as a standalone strategy.
Finally, founders must be prepared to promote their campaign actively. Equity crowdfunding is public-facing and demands ongoing communication through email, social media and investor updates. Startups with internal marketing resources are usually better placed to meet these demands.
For the right businesses, crowd fundraising platforms offer a valuable blend of funding, visibility and customer engagement.
Choosing to raise through crowdfunding platforms can bring significant benefits but it also comes with unique considerations.
Advantages:
Challenges:
Equity crowdfunding has become a valuable funding option for startups that want to raise capital while building brand visibility and engaging a broader community. However, a successful campaign involves more than simply publishing a pitch online. Founders must invest time in preparation, secure early investor commitments and manage ongoing communications throughout the campaign.
In part, this is because each crowdfunding platform differs in its audience, investor reach, campaign requirements and fee structure. Consequently, it’s important to assess these variables carefully and choose a platform that matches your stage of growth, sector and marketing capacity.
For the right type of business, particularly those with a strong brand, existing traction and clear communication resources, crowdfunding can offer more than just investment. It can also drive customer loyalty, media interest and long-term engagement that supports future growth.