A Guide for Entrepreneurs and Investors
Equity crowdfunding platforms, also known as equity crowdfunding portals, will literally be the platform for success for many entrepreneurs and investors. With Title III of the JOBS Act still waiting to be enacted, many people have yet to explore what an equity crowdfunding portal actually is. As I have said several times in the past, educating yourself during this downtime will certainly pay off once the gate is lifted. When the path to equity crowdfunding is opened, you can start your journey immediately.
To make the passage easier for both sides I will explain each aspect of the platform individually. However, it won’t hurt to know the other landscape as well. It will help you understand the behaviors of the other half and improve your overall knowledge of the platform.
Equity Crowdfunding Platforms for Entrepreneurs
As an entrepreneur, you will have three main responsibilities on the platform: creating a company profile, building your offering and marketing your offering. Upon visiting the equity crowdfunding platform you will notice it is usually separated for entrepreneurs and investors. For example, at truCrowd our header reads “Get Capital” and “Get Equity” so users know where to go. After you join you will choose your role right immediately.
When you begin to open your account you will first be prompted to read and agree to a variety of important information – some from truCrowd and some from the government. This will include a background check for 20% of the ownership and executive team. Once you have agreed to the terms, you will build the description of your offering, upload your business plan and select your funding target amount. All of this information is critically important so please make sure you double and triple check each information field. It is also advantageous to create videos and infographics to educate and entertain potential investors.
Once your offering is live you should campaign as much as possible. At truCrowd we not only help you market to your Texas connections, we also have an internal communication system. Our equity crowdfunding platform has a newsfeed much like any other social media website as well as private messaging and chat. When investors become interested in your offering, you have the power to allow them access to pledge. After you reach your target amount, we will assist you with all the paperwork and the transfer of funds from an escrow account into an ebank account. Not all equity crowdfunding portals offer this assistance, but we do.
Equity Crowdfunding Platforms for Investors
Hello all non-accredited investors and welcome to equity crowdfunding! Creating your crowdfunding profile on an investing portal like truCrowd is quite similar to any modern social media website. A simple form of personal information, banking information, a picture (if you wish) and a brief bio are standard. Afterward we will perform Knowledge Based Authentication to verify your identity and bank account.
At truCrowd, our equity crowdfunding portal allows entrepreneurs to allow or deny pledging access to investors. That is, you can look at the product in the case, but you can’t buy it yet. The better you describe yourself and your aspirations as an investor, the more attractive you will be to issuers. They want trustworthy, stable investors just like you want a trustworthy, stable company to invest in. Once you are granted access to pledge the amount is up to you.
Another truCrowd advantage for our investors is our social media capabilities. In addition to helping you reach out to your Texas friend lists on all social media sites, we have an internal system for you to communicate with other investors and issuers. You will have a newsfeed where you can post/share a great offering you found or discuss an offering you are interested in with other users. If you are starting a new post, be sure to tag whoever you think will be interested. When one of your pledged offerings closes, a stock transfer agent will help you with the official transfer of equity.
I hope you have a much better understanding of what an equity crowdfunding platform is and how it works.
Thank you again for reading and please leave your comments below!
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.
Follow the link for more details about Social Media regulations and restriction: http://trucrowd.is/1EZj07M