Equity crowdfunding has changed the game of SME finance.
Once you’ve determined equity crowdfunding is right for your business, the question of how to successfully crowdfund it remains. there are several proven ways to make your crowdfunding for equity campaign stand out.
1. Produce a high-quality, compelling videoMost equity crowdfunding platforms allow crowdfunders to embed their campaign proposals as videos. This is a golden opportunity to present your brand in a vivid, emotionally impacting way. Instead of a dry, dull pitch deck in form of a powerpoint presentation, investors can now see your face and hear your story from your own lips. It’s a powerful tool. An engaging video will bring your proposal to life, and set your campaign apart from the pack. But it needs attention to technical detail: unobtrusive film editing, clear sound, striking visuals and a tightly constructed narrative. Do this, and you’re one step ahead of the competition.
2. Craft a story
This goes hand in hand with a good video. But a good video doesn’t make up for a lack of a good story. And that’s because people love stories. Why simply tell an investor that “customers like my product” when you can show them liking your product? Actions do speak louder than words. If your company has an interesting backstory, use it. Crafting a narrative in your proposal will evoke images in the minds of investors; it’ll give them a way to relate with you. And this will stick with them long after they’ve clicked away from your proposal.
3. Start Early
Lining up your own network to invest—like friends, family, business partners— before you’re crowdfunding campaign goes live is crucial to making your proposal jump out from the screen at investors. When an angel investor sees a campaign that’s already securing investors the very day it goes live, it makes them look twice.
4. Exploit Social Media like Mark Zuckerberg exploited his co-founder in the Social Network
Take full advantage of social media. Period. It’s perhaps the most basic way to increase the visibility of your campaign. And the truth is that the crowd isn’t always actively looking for you (but that doesn’t mean they’re not interested). There are loads of potential investors who’ve yet to register on a platform who would jump at the chance to invest in your company. Let them know. Facebook, Twitter, Youtube, Instagram, hey who knows, maybe there’s some people hiding on Myspace. Use them all. Social media platforms are quick, effective, and free ways to spread the message.
5. Send out personalized messages to investors
Equity crowdfunding platforms connect you to large, diverse networks of investors. Don’t neglect this. You should be reaching out to potential investors throughout your campaign, and taking that oh-so-brief extra second to show that you know who they are. Investors can sniff out an impersonal, mass email a mile away. Better yet, call them. When someone invests in your campaign, reach out and thank them. Who knows—they might start spreading the word.
6. Have a clearly defined product and customer
This is a basic, but crucial deliverable—and one that too often gets botched. Investors are regularly presented with abstract ideas that look great on paper but that don’t have a minimum viable product or a defined customer base. They’re used to it. And that means their interest is piqued when they see a proven concept that’s clearly demonstrated. When an investor is presented with 1) a tangible product and 2) proof that it’s been vetted by customers, then suddenly you have a campaign worth taking a second glance at. And that second glance can make all the difference.
7. Make your valuation realistic
Obvious, I know, but important: crowdfunding with equity involves experienced investors who know proper valuations and investor terms when they see them. Investors have no problem passing on great ideas when they’re packaged with an impractical valuation or unprofitable share exchange. This isn’t charity. Investors will respect a properly valued proposal combined with a honest equity allowance. It’ll make you stand out as a savvy entrepreneur with business smarts—traits that are rarer than you think. And trust us, angel investors have plenty of first hand knowledge with this and will take notice.