Equity crowdfunding is trickier than traditional crowdfunding. After all, you are proposing a business to other people. You are proposing an investment. So your project must be firmly based on solid ground, on detailed business plans, and with a good ROI prediction. They don’t have the same emotional appeal as traditional crowdfunding, in projects based on an innovative product or one that will save the Earth.
Some people might be surprised by the above statement because they know there are other people out there who are looking for ways to make $50.00 become $100.00 or $500.00 all the time. That’s true, but that’s an emotional appeal that will only gain traction after you get your first round of money, or you have achieved some remarkable milestone that becomes public knowledge. Not to mention, your project can appear phony if you promise too high of returns.
Before you get there, you’ll likely be turned down by a lot of investors. You’ll attract the attention of only a few interested people, who will likely scrutinize your idea and your proposal. A common mistaken impression of the entrepreneur is thinking that by equity crowdfunding his project, thousands of anonymous investors will come in and put money into the business, which would become viable almost instantly. Actually, there are no records of such an outcome.
So, keep both of your feet on the ground and devise your plan carefully. Your campaign will not be so different than that of one designed to attract venture capital. The only difference, actually, is how you’ll attract investors to your business.
Consider the Web as a place where hundreds or thousands of potential VCs exist. You are going to reach them where they are. You’ll have to “knock on their digital doors” and present your pitch. Only the methods of doing so are different.
As in the VC world, getting the attention of equity crowdfunding investors is a sales process that requires appropriate processes for each step of the sales funnel.
This article is part of a series of practical steps that you can take to be successful in equity crowdfunding. Keep reading our equity crowdfunding mindset series for more.