Crowdfunding Your Way to a Successful Equity Offering

If your business is currently considering raising capital through an equity offering, we would like to introduce you to crowdfunding. No, not Equity Crowdfunding under either Title II or Title III of the JOBS Act.

There are no shortage of article debating the advantages and potential disadvantages of the newly legalized concept of issuing equity for a capital raise through a crowdfunding platform. You have likely considered bringing your equity offering to an Investment Banking firm, Venture capital group or Angel Network, possibly all of these. All of these options may or may not be available to your start-up depending on your business plan, management team, proof of concept and potential future earnings. Investors, accredited or not, professional or layman are looking for the potential your has company to earn them a return on investment. Often (outside of Silicon Valley) the biggest challenge a start-up faces when offering equity for a capital investment is proof of concept, in other words, is your product (or service) needed and wanted. Will your company make money and ultimately a return on investment for the equity participants.

Our research and experience working with the reward crowdfunding model has brought us to an interesting conclusion. Prior to bringing your company to potential investors, bring it to the crowd. We recently wrote an article on utilizing crowdfunding to gather essential market research data, this has led us to believe that a properly executed rewards based crowdfunding campaign can take you a step further. A precursor to a successful equity offering.

We envision sitting down with a group of investors or potentially posting on an equity crowdfunding platform with a simple pitch. “Our company raised $100,000+ prior to a product launch and without issuing ANY equity or debt in our business“. How interested do you think these potential investors would be even before you gave them one additional piece of information about future earnings, your current operations or your leadership team?

A successful rewards based crowdfunding campaign offers future investors insight in to your companies ability to be successful. This includes insight in to your management team, the potential for your product or service and your ability to successfully market that offering to your future customers.

Our recommendation: Before attempting an equity offering, hire a professional crowdfunding consultant and invest 3-6 months in a reward based crowdfunding campaign. You will quickly know if you are ready to both come to market and attempt an equity offering. If your campaign is successful enough, you may find you no longer have the need to sell equity. Imagine That!

 

 

 



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You've got an idea, project, cause or business that you've poured your whole heart in to. You're irrevocably passionate, but faith can only take you so far. Thanks to the alternate universe known as cyber space, you’re never too far from someone that shares your convictions. Better yet, they may be willing to dig deep into their pockets to help you achieve your goal when it may have seemed like all was lost.

Crowd funding sites are on the rise and are a fantastic option for helping you raise the dough for the project you believe in, but haven’t been able to get off the ground. You wouldn’t just give your money away to a stranger, so consider turning the tables and really investigate which site is right for you to gather funds. There’s a plethora of options out there, so choosing one in the ever growing sea of websites can be daunting to stay the least! But there’s hope! Like the strong beam of a lighthouse, reviews site ‘Crowdfunding Website Reviews’ will guide you safely through the stormy waters of the crowdfunding world.

This “does exactly what it says on the tin” review site delves right into its top featured examinations as soon as you land on the homepage, no messing around. Did you know there could be this many sites available to you? Well fear not, all reviews are broken down into easily digestible sectors and held at the top in clear, concise tabs making this site one easy place to navigate. From niche crowdfunding sites, to all the top players in the game, you’ll be able to find the perfect fit. Each review comes with easy-to-understand star ratings covering customer service, cost of use and traffic; as well as a fully informative and analytical breakdown of what the site has to offer, and how well they deliver their service.

This is your chance to fulfill your dream, don’t take it lightly. Inform yourself and rest easy in the knowledge that the people investing in your project are sharing your passion, and so are investing their belief in you. - Jessica A.