Tips for Texas Equity Crowdfunding Entrepreneurs
After a successful and well-attended Texas Crowdfunding Seminar on Wednesday, the intrastate crowdfunding buzz in Texas is louder than ever. With the first official intrastate crowdfunding seminar in the books the wheel has officially begun to roll. Once it gains momentum, we are all confident it will be a huge success in The Lone Star State.
At truCrowd Texas we understand that equity crowdfunding is going to be a new to all Texas entrepreneurs so we made up a quick list of advice for you to read through. This basic list of equity crowdfunding campaign advice before launch will teach you what to do before your campaign goes live to give you the best odds for reaching your funding goal.
We rounded up five great tips for you, so please enjoy the following Texas crowdfunding advice for entrepreneurs and pay close attention!
Understand All of the TSSB Issuer Requirements
If you haven’t familiarized yourself with the Texas State Security Board’s information for issuers using the intrastate crowdfunding exemption, you need to start today. There are eligibility and filing requirements you must meet before you will be allowed to participate, so this should be completed before you do anything else. In addition to completing all of the relevant forms and filings, make sure you understand all of the requirements set forth by the TSSB. Knowing them now means you won’t make a mistake later.
Set a Smart Funding Goal
There are two goals you need to separate before you start – how much money you want and how much money you need. Remember, you can execute more than one crowdfunding campaign (not at the same time, however) so take the time to figure out what you need capital for in the near future. Manufacturing? Hiring more employees? Renting a larger location? It is definitely worth taking the time to figure out exactly how much you need with each round of equity crowdfunding. Ask for too much and you won’t reach your goal. Ask for too little and you may reach your goal but won’t have enough capital to accomplish your projects. Find the balance between a funding goal you can reach that will pay for all your objectives.
Reach Out to Family and Friends before the Campaign Launch
Rewards-based crowdfunding has been around for years and one funding approach has worked for almost everyone – reach 20% of your funding goal as soon as possible. For random investors, the faster they see your campaign getting funded, the better your campaign looks to them. If you reach 20% in a matter of hours or days, it makes you look attractive because why else would people be funding you so quickly? So the questions is – how do you achieve this? The answer – reach out to family, friends, co-workers, neighbors, friends at church, old classmates, whoever you think would be interested in funding your crowdfunding campaign. Contact them at least 6 weeks prior to launch and send them reminders as the launch date approaches. Once your funding numbers soar from 5% to 20% to 40% in a day, investors who aren’t Uncle Steve and your college roommate will pledge their money as well.
Ask for and Respond to All Feedback – Positive and Negative
As you spread the news, ask everyone what they think about your company, product, crowdfunding approach and so on. You need honest opinions so get ready for both good and bad feedback. One important aspect of this process you must understand is that all feedback is valuable to you. The positive feedback is obviously good for your ego and lets you know what’s working. The negative feedback, however, may be more valuable to you than hearing how great you are. It is important to hear what people don’t like about your company or product because you have the time to change it. Correcting mistakes and/or modifying your approach before it goes live is a huge advantage! Make a point to respond to each comment as well. They took the time out of their lives to offer their opinion and help you make a better equity crowdfunding campaign. Thank them for their time.
Do Your Homework
Although crowdfunding is not widely discussed as a competitive sport, it actually is. There are only so many investors out there and all of the crowdfunding campaigns want to “win” their money. One great approach becoming the winner is to research crowdfunding platforms who have achieved success in the past. Like any competitive field, it is always smart to research past winners and find certain techniques you can apply to your own tactics. The tone of the content, the pictures, the video, whatever you can take from it – use it. Crowdfunding portals are full of campaigns for you to study and it is definitely worth your time. Clay Hebert, founder of New York City-based Crowdfunding Hacks, spoke about this subject in a crowdfunding article in Entrepreneur magazine: “(Crowdfunding) is super transparent. Everything is up there for you to look at. It’s very lazy to not look at what’s worked and what hasn’t.”
Texas equity crowdfunding is an amazing opportunity for every entrepreneur in Texas. The traditional methods of raising capital (venture capitalists, etc.) are usually set aside for companies seeking $1,000,000 or more. With Texas intrastate crowdfunding, you can raise $1,000, $10,000, $100,000, whatever your company needs. Creating your crowdfunding campaign should be as fun and exciting as it is professional. As your launch date gets closer, be sure you have everything ready to go and uploaded to your campaign. This way, when the launch day arrives, you will be ready for takeoff!
Thank you for reading and please leave your comments below!