Benefits of raising capital through equity crowdfunding

Consider equity crowdfunding to raise capital

Whether starting up or looking to expand, funding has long been a challenge for small-to-medium-sized businesses. Sales income is rarely enough, especially for those with big plans, and the same is true for loans from friends and family members. Bank loans require paperwork, revenue history and proofs of concept that may not get approved and putting it all on a credit card may be tempting but can carry high costs. If an entrepreneur can get access to big investors or venture capitalists, their investments come with strings and a loss of control that can feel too much like going to work for somebody else. The introduction of equity crowdfunding has provided an alternative source of capital that has unique and attractive benefits.

Relatively easy access to business funding

The regulations introduced by various crowdfunding regulations have broadened the pool of potential investors, allowing the general public to invest in privately held companies in the same way that only accredited investors were previously able to do. Best of all, they can make their purchases online via equity crowdfunding platforms that are responsible for the hard part: they provide the technology and legal framework, making the process seamless for both the investor and the entrepreneur.

The equity crowdfunding process is an excellent, effective form of marketing

Once a business’ equity crowdfunding campaign is posted on a crowdfunding platform, it serves as its own form of marketing. Because the campaign’s success benefits the platform, they work to make their websites and the opportunities posted as attractive as possible, and some alert their database of the presence of new listings. More importantly, once a campaign is posted there are no limits to the effort that an entrepreneur can put into attracting attention. They can distribute the link to their listing to their own network of family, friends, business associates and others to invite them to invest in their offering; notify local media and industry insiders that may publicize their efforts; include the link on social media postings and direct mail advertisements. They can be as aggressive as they wish in communicating their fundraising effort.

Investors make the best brand ambassadors

Crowdfunding represents a unique dynamic in which word of mouth combines with need to create a movement. Equity crowdfunding investors select companies that they believe in, and once they are invested, they are truly engaged. Since they hope to eventually get their money out with a profit, the company’s success automatically becomes a matter of self-interest. They take responsibility for promoting the business to their own circle and for providing feedback on improvements to further that goal. Perhaps most valuable of all, positive results turn them — and their network — into potential investors for future campaigns.

Can you help launch our equity crowdfunding?

We help entrepreneurs develop a go-public strategy, tap into our network to build the professional team, and manage the process to facilitate a direct listing, reverse merger or initial public offering. We can help form a SPAC if desired. Our services help entrepreneurs take their company public so they can recruit talent, raise capital, complete acquisitions, and create significant wealth. We also offer capital raise consulting to help structure and launch equity crowdfunding campaigns. Connect with us to learn more.

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