Tips to raise growth capital through equity crowdfunding

The JOBS Act made significant changes in the ways that entrepreneurs could go about raising capital, and one of the most exciting was opening up the ability to market and advertising your endeavor. There’s never been a better time for this opportunity to arise — our world is more interconnected than ever, and social media has created the potential for messaging to go viral.

The power of crowdfunding is unquestioned. According to Fundly it has already added $65 billion to the global economy and is expected to grow to over $300 billion by 2025. Though equity crowdfunding represents only a small percentage of that market, data provider Statista projects it will represent over $5 billion in funding by 2022.

Unfortunately, the fact that so much money is available via equity crowdfunding does not mean that every ask goes well. Entrepreneurs who are seeking investors need to approach their campaign in the same way that they would any marketing project: they need to do their research and choose the right platform, understand their audience and then spread the word. Here are our top tips for a successful investment funding campaign.

You’ve already put the hard work into creating your company. Now you need to own the funding process. Make sure that you study both the successes and failures of campaigns that have gone before you, as well as what you’re allowed and not allowed to do, and which crowdfunding platform is most appropriate for your needs. Equity crowdfunding platforms each have their own unique attributes and offerings, and some will suit you and your needs better than others. Though all connect potential investors with businesses seeking funding, some act as intermediaries that hold funds in escrow and then transfer them to the company, while others essentially act as advertising vehicles. More sophisticated operations lump different investment opportunities into the equivalent of equity crowdfunding index funds that investors can purchase shares in. Know your options — and the fees involved — before making your choice, and make sure that you have your crowdfunding goals and timeline well established.

You probably already have a head start on this aspect of marketing your funding campaign simply by virtue of knowing the need that your company or product fills. When it comes to equity crowdfunding, customers often make a company’s very best and most enthusiastic investors, but they are certainly not the only ones. There is an entire world of equity crowdfunding investors who are on the lookout for opportunities to invest in projects that they feel a passion for. These are people who want to make money and feel good about the way that they are doing it.

Want proof? According to a research project out of Georgia Tech, crowdfunding campaigns that used phrases including “given the chance” or “some help with” fared far better than those that used the phrases “hope to get” or “provide us.” That means that your marketing should speak directly to your mission, your future and your story rather than your financial need and should be told using high-quality marketing materials that translate well to digital media. Where appropriate, consider offering some type of reward to encourage and express appreciation for investing, and make sure that you keep the lines of communication between yourself and your investors wide open to encourage both feedback and transparency. Posting updates on your fundraising progress can make a significant difference in a campaign’s success.

Finally, you need a real strategy for getting the word out about your equity crowdfunding campaign Social media is an absolute must, but you can’t just post a link on your Facebook or Instagram page. Find pages that are linked to your product or its mission and tell your story there, on a regular basis. Search what your competition is doing and who they are talking to, then contact those same people to make sure that they know about you. Tweet buzzwords about your project and provide a link to both your website and your post on the crowdfunding platform. Here are some marketing essentials for broadcasting your funding campaign:

o  Contact industry journalists, podcasters and bloggers who write about your product and let them know about your campaign. Their audiences are your potential investors.

o  Make sure that you have included your funding campaign on your own website and write your own blog – then post links to the blog on your Facebook page, on Instagram, on Twitter and LinkedIn, as well as on related networking pages on all of those platforms. Remember that each of these social media platforms are more than just individuals – there are niche groups out there representing every imaginable interest group —both specific to your industry and to equity crowdfunding in general — that will be interested in discussing, investing in and promoting your campaign.

In addition to promoting your campaign online, there are offline opportunities that you can take advantage of. Industry conferences provide an excellent jumping off point, but don’t forget speaking to those closest to you – your family, friends, neighbors, colleagues and current customers who already believe in you and who will be your very best brand ambassadors. Ask them to leverage their own networks, creativity and energy to help your cause.