Are You Prepared for Equity Crowdfunding?

Prepare For Crowdfund Investing

Are You Prepared for Crowdfund Investing?

Get Your Business Ready for Crowdfund Investing

From identifying market opportunities to eventually turning them into profits, startup entrepreneurs brave a long and strenuous journey. In addition to facing the high risks associated with founding a startup, the majority of new business owners confront their first major dilemma very quickly: how do I raise money for my startup? If you don’t possess the proper collateral to qualify for a bank loan, or if you’re not scaling fast enough to signal venture capitalists, equity crowdfunding may be your best option. In “Crowdfunding: A Guide to Raising Capital on the Internet,” Steven Dresner offers insightful tips of what entrepreneurs can do to best prepare for crowdfund investing:

  • Get organized – There are a number of things you can do to prepare for crowdfund investing before the SEC finalizes the rules for equity crowdfunding. Dresner recommends trying gift or donation-based crowdfunding, if it makes sense for your business. This experience will offer you a hands-on perspective of what a crowdfunding campaign looks like and how to manage your campaign while it is live. A successful campaign will also validate your business plan and stand as a powerful reliability enhancer in the eyes of your future investors.
  • Choose the right funding platform for you – Online crowdfunding platforms are growing and evolving at a startling rate. As a business owner who wants to be fully prepared for crowdfund investing, your goal is to find the one that is most compatible with your company’s specific needs. A robust crowdfunding platform – such as truCrowd – offers support tools to assist you pre- and post-funding, grants access to confidential documentation to perform their due diligence and encourages transparency in complete compliance with the SEC’s regulations.
  • Develop a capital raising plan – Defining your approximate financial needs begins with setting goals and estimating the costs to reach them. In order to complete this task, you’ll need a very clear picture of how your industry works and what the current estimated expenses associated with your type of business. The best way to anticipate how funds will be used is to find a connection in a company that targets a similar market segment and openly ask them what their monthly expenses are. An important part of the capital raising plan is to project how you are ultimately going to return profits to your investors.
  • Build social capital by strengthening your social media network – Social media will be the most active agent of your crowdfunding campaign. It’s a tool you can start using today for shaping a relationship with your future investors. By establishing networks on social media, you become visible to anyone who can contribute in any possible way to your future success, thus adding value to your pitch. Being prepared for crowdfund investing means marching into your campaign with an army of backers – individuals who are excited to see how your company will make a difference and are eager to be a part of it. Or, at least a little bit curious to learn more about the opportunity. For more information on how to leverage the power of social media to build social capital, download our free eBook.
  • Beyond its main financial benefit – a solution for seed capital formation – crowdfund investing offers the perfect opportunity to market ideas, products and services online. It gives entrepreneurs the chance to test whether their ideas have wings before spending a fortune on getting the business off the ground. The decision to fund a project belongs to the crowd and its chances of success cannot be considered a game of luck. Instead, it is a mixture of crowdfund investing preparation ingredients: a series of decisions made from the moment the business idea sparks in the entrepreneur’s mind to the first seconds of the equity crowdfunding campaign going live.

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Please note that you are not allowed to post public information about the equity offering campaign you are running on truCrowd platform on any of your social media channels.

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