If you’ve tried to research equity crowdfunding, you’ll know how confusing the regulation process is.
There are so many fundraising regulations, financial terms, and best practices when it comes to launching an equity crowdfunding campaign. It can make your head spin!
That’s why, today, I’ve put together a complete explanation. We’ll go through the ins and outs of how equity crowdfunding works and how you can use it for your startup company.
The video that I’ve embedded below will cover everything that you need to know for this new type of crowdfunding. After you watch it, I’ll also recommend a key resource for getting started!
What do you think? Is equity crowdfunding right for you?
With this explanation, I’ve tried to give you a crystal clear overview of how the process works and also get a bit into the costs of raising funds.
I hope you enjoyed the video, and if you did, can you take a second to subscribe to the YouTube channel so that you’ll get notifications of future videos that I put out.
Thank you!!
Why is Equity Crowdfunding So Confusing?
The reason that equity crowdfunding is confusing is because there are three key regulations that you can raise funding under. Depending on which you use, the requirements are going to differ.
In addition, the regulation that you choose will impact WHO can invest in your startup, how much money you can raise, and the way you’ll go about broadcasting the offering to potential investors.
I hate legal mumbo jumbo and right now, that’s how the Jobs Act reads. It’s hard to understand unless you’re a lawyer, are already familiar with these regulations, or a part of the industry already.
That’s why I want to hook you up with an easy-to-understand guide, so that you can skip all that hassle. All you gotta do is pick up a copy here. Hope you enjoy it :).
Which Funding Type is Best For You?
One of the most common questions that I get is which types of companies are a good fit for equity crowdfunding. I want to clear that up right now.
First, you have to assess the resources that you have access to. In order to do larger raises (think $500k or $1 million), you’re going to need to have a team of people around you that will help you launch the project.
If you don’t have a lot of resources, then you’re pretty much stuck to doing a campaign for under $100k or seeking another financing route, like Kickstarter.
Second, you gotta ask yourself what type of business that you have. Not every company is appropriate for investment. For example, if you’re running a chain of delis, you’ll be less likely to get funding than if you have a new tech product.
Equity crowdfunding platforms are notorious for turning away a majority of the startups that apply to raise funds. That’s because they are simply low-quality companies.
What is The First Step in the Process?
You’re actually engaging in that step right now! You’re becoming educated about how crowdfunding works and the regulations that are out there.
For a complete guide, check out Equity Crowdfunding Explained, where I go behind the scenes of this new industry. I’ll share with you the best websites, how to get investors, and break down all of the regulations.
After you’ve done that, I would begin to assemble your launch team. Who’s going to help you with this launch, specifically on the side of marketing. This team will literally make or break your financial raise.
By investing in quality partners and service providers, you’re going to ensure a successful project. Do some vetting. Ask around. See what’s out there. I also recommend some of these in my guide.
Get Free Exposure (See Below)
I’m looking to interview more equity crowdfunding campaigns on my podcast, crowdfunding demystified, so if you do end up running a successful project, reach out!
I like speaking with entrepreneurs who are in the trenches right now and willing to share tips, advice, and any thoughts that they have when it comes to the actual launch process.
Not only does this help other startups on the path, but it also spreads awareness for your business, product, and brand. It’s a great way to get instant exposure to a whole group of people that LOVE crowdfunding.
Just shoot me an email and let me know a bit about you, your project, and what you can bring to the show. This will help me field and sift through all of the inquiries that I get!
I wish you luck in launching your new project and hope that you are a success! If you haven’t yet, take a sec to subscribe to my YouTube channel for more content like this.
