You will learn:
– The ins and outs of equity crowdfunding
– How should your campaign page look
– Which investors should you be targeting
– How to apply and what platform should you choose to run your campaign
– How many applicants get turned away from equity crowdfunding platforms
– What should you offer as rewards for your equity crowdfunding campaign
– Best resource, best tip and biggest mistake entrepreneurs make when it comes to equity crowdfunding
Who are we interviewing?
Nathan Rose originally had a background in finance and then spent 18 months traveling around the world learning and studying Equity-based crowdfunding. Then Nathan started a consulting business that assists with equity crowdfunding for startups. You can find more at AssembleAdvisory.com
– More business can be equity crowdfunded verse reward crowdfunded
– Equity Crowdfunding isn’t necessarily for your local brick and mortar shop
– An example of a company that could benefit from equity crowdfunding. (A ton of business can be equity crowdfunded) Last business Nathan worked with was a medical device that scans fluid before entering into a human body who was able to raise $800K
– Most equity crowdfunding platforms are country by country due to each countries individual regulations
– Equity Crowdfunding Platforms (country by country)
—— (USA) WeFunder.com
—— (USA) Republic
—— (CAN) FrontFundr.com
—— (UK) SyndicateRoom.com
—— (UK) Seedrs.com
—— (UK) CrowdCube.com
—— (NZ) SnowballEffect.co.nz
—— (NZ) Equities.com
– Equity Crowdfunding has a stricter screening process than Kickstarter / Indiegogo
– Less than 10% of companies that apply for an equity platform will actually make it to the public
– The application process for equity crowdfunding can be intense
– Do you need to bring your own investors to an equity crowdfunding platform?
—— If you bring your own investors and get momentum going early, then there is a good chance more people will find you and contribute
– Equity crowdfunding campaigns look a lot like Kickstarter / Indiegogo campaigns. Videos, about the team, etc… Only difference is shares instead of the product
– Some equity crowdfunding campaign also offers rewards in addition to equity
– Accredited Investor – If your net worth is in a certain category or your income is above a certain amount you can invest in any company of your choosing
– Most equity crowdfunding campaigns also go for around 30-60 days the same as a Kickstarter or Indiegogo campaign
– According to Nathan you should keep at least half your equity if planning an equity crowdfunding campaign
– The usual percentage is given away in an equity crowdfunding campaign. 10% – 30%
– Conversion rates on traffic to your equity crowdfunding page, not as important as it is in rewards-based crowdfunding
– CrowdfundInsider.com is a great resource for the deals being done, and all information you need on equity crowdfunding
– Just like Kickstarter & Indiegogo differ, same applies to equity crowdfunding platforms. Be sure to research each platform because they do have major differences
– 1 Major drawback for equity crowdfunding. When you go directly to a VC firm and they say no.. Nobody knows about it. But your equity crowdfunding campaign can be a public failure and everyone will know about it.
QUESTION: Best tip for anyone listening hoping to launch an equity crowdfunding campaign?
Nathan: Equity crowdfunding will allow you to raise more money typically. Which means you will have shareholders around for a long time. Which can be a good thing and a bad thing. So if you have been running your own business as your own thing with no shareholders up until now… All the sudden you will have a bunch of new responsibility to your new shareholders. They’re going to be pushing for growth. And I think some founders won’t enjoy that, but if you’re really passionate about growing your business to as big as possible having shareholders onboard can be, a great way to hold your feet to the fire and get you where you’re going really quickly.
QUESTION: What is the biggest mistake you see entrepreneurs make when they enter an equity crowdfunding campaign?
Nathan: Underestimating how much time it’s going to take. They think they’re going to get the money next week. But even the offering period is longer than a week. So start at when the money is going to arrive in your bank account. Count back 30-60 days then you need to build in a 2-3 month preparation period into that too. For sure, start well before you think you actually need the money.
Get your Copy of Nathan’s book “Equity Crowdfunding” for free November 1st on Amazon! Click the image below!