How to make a successful deal on Equity CrowdFunding?

March 26, 2019

What are the pieces that come together and make the deal a success? There are several pieces and each and every one of them are equally as important.

Firstly, create a network or interact with people. Public relations and advertising are seen as the fundamental sources of funding. Increasingly, capital is usually derived as a result of the networking and the connections that have been established. However, networking alone isn’t always enough. Always initiate regular follow-ups and keep yourself relevant. In addition, the network contacts may know other people who may very well turn out to be investors. By keeping yourself in the loop, you are opening the doors of opportunity to potential recommendations from your network contacts.

Secondly, communication is key. If you are an Issuer, you should be clear in communicating to the investors. Information from the Issuers should be clear and concise and explain clearly to the investors to help them understand the business and the potential returns from investing in the business. Information such as your company’s plans for the future once you have reached your funding goal should be clear. Transparency is important to ensure that the trust between investors and Issuers are formed.

Thirdly, have a story. Storytelling is really important as it can send the right message to the investors. Investors are more inclined to invest in companies who share their beliefs and values. This ties in with the marketing strategy that the company takes to reach investors efficiently. Marketing through social media such as Facebook, Twitter and Instagram are reliable channels to get your intended message across to the relevant investors. The visual appeal should also be applied to videos. Videos are a great way to send your message across to your audience in an efficient way. Visuals are more appealing and are able to keep the intended audiences’ attention as they are usually 3-4 minutes long, as compared to texts that are more taxing on the reader (Byrom, 2017)

Lastly, you should show that you have gained momentum. When investors see the momentum that you have garnered for your business, the image of your business will look more enticing towards investors as they know that they are not the only ones who are interested in investing, but there are multiple others who have also shown commitment towards the business. Momentum for the business can include family members, colleagues and friends on top of your suppliers or customers.

References

Byrom, M. (2017). Importance of Video for CrowdFunding. business.com.

https://www.business.com/articles/get-in-on-the-action-the-best-videos-used-in-crowdfunding/.