Whilst having a great business idea or invention is a solid foundation, it is rarely enough to guarantee success on its own. For that, you are likely to need capital and, unless you are extremely wealthy, then you will need to rely on external investment if you are to grow your business. Equity-based crowdfunding represents an attractive opportunity for many start-up and mid-early stage companies who are looking to raise capital.
Sam Quawasmi, Co-Founder and Co-CEO of Eureeca, offers his advice on the “dos and don’ts” when considering whether equity crowdfunding is right for you.
DO your research, as not all crowdfunding platforms are the same. Key differences are in the type of business ideas they accept, the commercial requirements, the people they reach and how they can help support you.
DO be clear about what you want to raise the equity for. Crowdfunding investors will want to know what their investment is supporting.
DO decide how much capital you wish to raise and how much equity you are prepared to part with.
DO ensure you pitch your products/solution around the problems it solves rather than just stating the benefits.
DO make sure that your crowdfunding platform is formally regulated. Eureeca is the only multi-regulated and cross-continent equity crowdfunding platform globally, having received four licenses to operate in three different continents – Europe, Middle East and South East Asia. This ensures that we can offer a truly international solution.
DON’T ignore the international potential of your product/solution. Due to our multiple licenses and our key office locations across the world, we specialise in providing businesses with the chance to access funding from an international pool of investors. This broadens the investor base and also means that businesses can leverage this network for strategic connections and expansion into new geographic markets.
DON’T ignore your investors once you have raised your capital. They are invested in helping your business succeed and often have lots to offer such as advice, market knowledge and networking opportunities.
DON’T forget that this is also a fantastic opportunity to showcase your business, which can help to drive sales as well as secure future investment further down the line.