6 Strategies for a Successful Equity Crowdfunding Campaign
Raising capital through Reg CF (also known as equity crowdfunding) is gaining traction. Since 2016, over $300 million has been raised through Reg CF offerings, according to CrowdWise. As more and more startups list offerings on online funding portals, you may be wondering how your company can stand out from the rest. ValueSetters has put together six strategies to help you launch a successful equity crowdfunding campaign.
1: Write an easy-to-read offering page
Your offering page is what draws potential investors in, so it’s important that your company’s story is communicated effectively. You should be especially clear and concise when describing the market opportunity and how your product or service solves a problem. Try to avoid big walls of text by using subheadings and bullets. Additionally, use plenty of high quality graphics; product and team photos, charts and graphs, and GIFs are all great ways to engage readers.
2: Include a video
Whatever you do, try to include a video in your offering page! The fact is, if given a choice between reading and watching a video, most people will pick the video. Try to keep it short; 60-90 seconds is ideal. A video is a quick and direct way to explain why people should invest in your company. It’s also a great opportunity to connect with the viewer emotionally. Make sure to hit only the main points of your value proposition so that you don’t overwhelm viewers with excessive details.
3: Reach out to your community
Your community can help make your equity crowdfunding campaign a success. Ask your supporters, customers, family, and friends to invest and share your offering via social media. Then, update them regularly about your progress. Remember, the beauty of equity crowdfunding is that you don’t have to be a millionaire to participate; the minimum investment can be less than $1, and your community wants to support you. Those small dollar amounts can add up fast.
4: Create a comprehensive marketing campaign
Use social networks, email, and traditional media to get your message out to potential investors. Twitter, Facebook, and LinkedIn are great places to announce your offering and post your video. Do you have an email list? Then use it! Remember to include a link to your offering in all public communications. We recommend including a link on the homepage of your website, as well. Also, if you have any contacts in the press, now is the time to reach out to them. Traditional media coverage with a specific call to action can generate significant interest in your crowdfunding campaign.
Need help marketing your equity crowdfunding offering? Take a look at ValueSetters’ digital marketing services.
5: Be strategic in your company valuation
Your company’s valuation is central to potential investors’ decision-making process. Investors are looking for value, especially given the higher risk associated with early stage companies. 2-4 million dollars is the sweet spot - above that range, it becomes more difficult to attract interest. Better to price slightly below market and create a feeding frenzy, as Bill Gates did with Microsoft's IPO, than to let your offering languish due to lack of interest.
6: Build momentum
We’ve all heard about the importance of social proof, and equity crowdfunding is no different. If people see that others are investing, they are more likely to participate, as well. That’s why it is so important to have a block of money lined up in advance. Make sure to stay within the Reg CF guidelines, though: you are not allowed to “precondition” the market by publicly announcing that your offering is coming before it is actually live, but you can have private one-on-one conversations with potential investors in advance of its opening.
Lastly, equity crowdfunding is about people and the best strategy is to remember that. If you follow these strategies, you will be well on your way to a successful crowdfunding campaign!
Looking for more information about equity crowdfunding? Download ValueSetters’ free ebook Guide to Equity Crowdfunding and follow our blog for more updates!
Coreen Kraysler, CFA