Alternative Investing Platforms
- 7 Strategies to Consider in Raising Private Capital by WealthForge
- How to Hustle on AngelList by Brenda Baker - this can also be applied to most other platforms.
- 21 tips on how to raise online from Darmesh Shah and Ty Danco
- 7 tips for raising Raising Capital on AngelList by Seed Stage Capital
- 7 crowdfunding tips proven to raise funding from Chance Barnett of Crowdfunder
- Expert tips on successful crowdfunding campaigns by Valarie Pham
- 10 Crowdfunding Realities needed for success by Christopher Mirabile - consider rewards first
- Equity Crowdfunding Tips for Women Entrepreneurs by Geri Stengel
- Angel Investor Survey Results by Propel(x) our article on this research
- Investor focused reports
Max Burwick of Crowdfunding Counselor - an attorney our of New Orleans
Crowdfund Capital Advisors - the founders Jason Best, Sherwood Neiss, and Zak Cassady-Dorion
A team of researchers have identified key elements to reaching a funding goal on equity-based crowdfunding platforms, using empirical evidence from the Australian Small Scale Offerings Board (ASSOB). Gerrit Ahlers, Douglas Cumming, Christina Günther and Denis Schweizer wrote the paper "Signaling in Equity Crowdfunding," identifying several critical success factors, which include:
- The number of board members;
- The level of education (measured by MBAs) of the board and management, and their network;
- Planned exit, whether it be an IPO, trade sale, leveraged buyout or reverse takeover;
- Financial projections, or a disclaimer — a written reason for not stating projections;
- Length of time in business;
- Personal wealth invested;
- Percent of company they are willing to give up or amount of equity offered.
An entrepreneur who successfully raised money on RockThePost, Shahab Kaviani, CEO of CoFoundersLab, shared tips in the Washington Post. Below are his points I feel are most important:
- Zero in on who you believe can be the lead investor;
- Be willing to travel to investors;
- Send updates on committed investments;
- Get feedback from investors;
- Exude confidence.
"Do you really want dumb money?" Barry Schuler, former CEO of America Online, was quoted posing this question in Forbes. There will be varying levels of commitment and intelligence in all sources of capital, but I argue that crowdfunding democratizes finance and brings together collective wisdom. That said, when considering the crowdfunding route, there are some issues to be aware of:
- Reporting burden;
- Time spent performing investor relations;
- Bad Actor requirements (CrowdCheck now offers a tool to ensure you comply)
- Future rounds of financing and venture capital models.
Significant sums of money have been, and will continue to be, raised through this nascent industry. Crowdfunding will impact business creation and job growth, as well as disrupt financial markets. I hope these suggestions help those considering this route to raise the necessary capital to build inspirational new companies that can benefit from the collective wisdom of the investment crowd.
To see who is raising money online now use our free search resource.To analyze the market and get help with determining valuation use our analytics and valuation solutions.