Most startup companies with limited funds are now giving crowdfunding a shot. Any publicity is good publicity, and online advertisements looking for investors are already an acceptable means of solicitation.
This also gives you the opportunity to meet influencers in your niche as you go out of your way to pitch to them.
In raising equity via crowdfunding, you can use some of these tips:
Find a Lead Investor.
This is a challenge, as finding a lead investor who’ll fund at least 25% of your expenses needs extra effort and a little luck. With the help of equity‐based crowdfunding platforms, you’ll be able to pursue shareholders, stockholders, philanthropists, and experimental investors for your company.
Being able to find a reputable investor can give not just your finances a boost, but it also helps give more credence to your startup. Think about this, no investor would waste his time and money if he’s not seeing some potential in it, right?
Don’t give just yet.
It’s wise that at the start, you don’t give in to requests like board seat reservation – YET!
Board seats and equity shares can come later once you know where the investor is going with your business. Make sure too that the investor funding your business in exchange for equity is accredited, to keep Securities and Exchange Commission from getting nervous with your company causing you trouble.
Additionally, you must establish first if you and your investor will have a great culture fit.
Pursue the investor that is more committed.
This will save you time as some prospects might back out after you have invested too much time with them. Besides, by having a committed investor that means that he’s in it not only for the potential wins your startup may have, but rather because he believes in what your product or service can do.
An investor who’s just half-hearted about investing in you may back-out at the first sign of discomfort. You don’t want to change plans in the middle of the game, right? Most especially if it’s something that can be avoided from the start.
Believe in your cause.
Always talk to an investor like you are trying to woo a girl. Be genuine with your intentions, and money will soon follow.
Most investors are previous startup founders themselves who’ve found success. And they’d definitely see if someone is just in it for the money, or a genuine passion to pursue a lifelong dream of becoming an entrepreneur by having a great idea that can possibly change the way people live, or solve a problem that’s been there for too long.
Ask for advice.
Investors are mostly pitched to almost every day. Specially the most popular ones. As mentioned, most have had a successful startup before, made great exits and probably have made a few mistakes in the past.
It’s best to ask for advice from them, not just money. This will also make you realize whether an investor is really interested in seeing your startup succeed.
Are you planning to do crowdfunding for your startup? What strategies do you think will work for you best?
Read also: How To Recruit a Good Developer When You Don’t Code
Article contributed by Startup Jobs Asia‘s Team.
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