Find Out How Why Crowd Investing is Right for You
Have you heard the buzz about crowd investing and wondering if it’s right for your business? Don’t worry, you’re not alone. Crowd investing is a fairly new topic, and while not yet legal in the United States, it has been a hot resource for the global online investment industry for years. And for good reason.
According to Massolution, a research, advisory and implementation firm, $5.1 billion was projected to be raised via global online crowd investing in 2013. And when you consider only $2.7 billion was raised worldwide in 2012, which was dispersed over one million online campaigns, you may start to think, “Yes! Crowd investing is definitely for me!”
But don’t get too far ahead of yourself. If you have already successfully built a startup you know the definition of hard work – and creating an attractive crowd investing campaign is no different. It takes time and careful consideration to develop your profile, but if executed correctly, it will catapult you into the next stage of your business. Now, with all the hard work considered, look yourself in the mirror and ask: Will crowd investing work for my business? When you answer with a well-thought out and enthusiastic “Yes” we can move on to why crowd investing is right for you.
Less Stressful Investor Search
Reaching out to friends and family for capital is somewhat easy because you know their personalities and have pre-gauged their interest. Reaching out to angel investors and venture capitalists is highly stressful because you are most likely known as applicant #437 and need to blow their socks off with your initial presentation. What if you could reach tens of thousands of capable investors by creating an online profile of your company and uploading documentation such as your business plan, financial statements and due diligence reports?
Now you can.
All premier equity crowd investing portals will provide you detailed instruction of what documentation you need to host a campaign on their site. By the same token, all potential investors will also be screened so you know every pledge is funded and legit.
When President Obama signed the Jumpstart Our Business Startups (JOBS) Act in April 2012, small businesses around the country were promised the opportunity to offer stock online. Although Title I and II were passed in a reasonable amount of time, Title III has yet to be released but for good reason – the SEC is making sure the possibility for fraud is zero.
And this goes for both sides of the crowd investing equation. While you may be wondering, “Will crowd investing work for me?” your investors are thinking, “Are these entrepreneurs real or is this a scam?” When the SEC releases its final regulations for Title III this summer, entrepreneurs will be given specific details on preparing the necessary documentation. Hosting sites will also be given their own set of regulations but not all online portals will be the same. Be sure to do your homework and choose the ideal portal to host your crowd investing campaign.
Licensed and Lucrative Online Portals
During the investment stage of your startup you have no time to waste. Every single day is an opportunity to raise capital and expand your influence on the investing community. Now that you have come to the conclusion that crowd investing will work for you, it is time to start researching online portals to see which ones offer the best platform for your goals.
First of all, be 100% positive your intellectual property will be protected. Your idea/product is your future so be crystal clear on the portal’s security features. Second, be sure you can invite all of your social network contacts to the listing. There is no easier way to get friends and family involved, and the closer the relation, the sooner they will be able to invest.
Last, find an portal with its own internal social sharing system in place. We all know the power of social media, and if an investor likes your company, they can spread the word throughout the portal. A discussion will spawn about your business and valuable and positive marketing will occur on your behalf. Once the discussion has begun you can enter to answer questions and ultimately lead new investors to your offering.
As the unveiling of Title III gets closer by the day, entrepreneurs around America are getting closer to receiving money from non-accredited investors. In addition to a less stressful investment procuring process, crowd investing will also be heavily regulated and available through innovative portals for optimal success. If you want to be a part of the future of investing – stop asking yourself if crowd investing is good for funding your idea and start preparing yourself for its arrival.