Now that equity crowdfunding is expanding beyond accredited investors*, many more businesses are likely to look at this unique funding source.
And while a huge number of businesses are almost interested in funding, the key to earning equity crowdfunding will be getting the attention and interest of potential investors. Even though there are already a few platforms that can help you navigate the equity crowdfunding world and find investors, you’ll still need to earn your investments. You’ll need to stand out in the crowd and be able to show potential investors that you’re worth it. Consider these tips for finding and winning investors for your business:
Spread the Word
Just like with rewards-based crowdfunding, you should utilize word of mouth to help you reach your goals and secure investors early on. Reach out to your network of family and friends and let them know you’re looking for investors, or ask them to spread the word. If you’re using a site like Crowdfunder to find investors, send your network the link to your profile and ask them to share it as well.
Tell Your Story
If you’ve ever watched the popular investing TV show “Shark Tank,” you know potential investors will want to know all about your company and will have many questions. When trying to find investors for your business, telling the personal story of your company – how you started, where you struggled, and what you want to accomplish – can help. Include important details, like why you decided to start your business and what the funding from investors will go toward. The more potential investors know, the more comfortable they may be investing in your business.
When looking for investors, you’re essentially trying to sell people on your business, and convince them that what your company does is worth their funding. Telling your story in a compelling way could help you stand out and help you win investors. Consider making a video that tells your company story and include testimonials from customers. Aim to make potential investors see the value in what your business does, because that may help you win their funding.
There are many ways to put yourself out there and tell your story, so get creative. With so many more people allowed to invest in startups, there are tons of new opportunities out there. Take advantage of the changes to equity crowdfunding and get the capital you need to help run and grow your business.
In our Google+ Hangout “How to Successfully Launch a Crowdfunding Campaign,” crowdfunding experts with KivaZip, NYC Business Solutions, Sparkmarket and more shared tips for preparing and launching a crowdfunding campaign. Their advice applies to both rewards-based and equity crowdfunding and could help you win investors for your business. Check out some of the highlights and watch the full video below!
Expert Advice for Launching a Campaign
- For most platforms, campaigns should include a three minute video to introduce the team and the product, service, or ask. Platforms like Kiva Zip don’t allow for a video, so be sure that you can upload one before you spend time and energy putting one together.
- Allow for prep time for your campaign. For most crowdfunding platforms, you’ll need 30-60 days to prep. For equity crowdfunding, you may want to give yourself 60-90 days because you’ll want to research some of the legal pieces and make sure you’re in compliance with them.
- Each type of crowdfunding platform has different target markets. Make sure you research each platform and try to select the best fit for your company and campaign.
- Be realistic. How much do you actually need? How much would you like? How much will the platform take in fees? How much will you need to pay in taxes?
- Build a trusted team to back you. Because crowdfunding is so social, the most successful campaigns tend to be the ones with a strong support team.
Learn more about equity crowdfunding in these articles:
Photo Credit: Province of British Columbia, Flickr