Finding Investors for Your Crowdfunding Campaign
How can you find investors for your crowdfunding campaign?
There are three driving forces that draw investors to equity crowdfunding: the idea, the niche, and who is on board.
The Idea: What is your idea? Is it new? Is it fresh? What problem does it solve? Will it endure? What’s the tech behind it? If you can answer those questions in your elevator pitch, finding investors can become much easier.
The Niche: The idea is great, but it’s not enough on its own. Who is going to buy the product? Who is going to partner with you to promote it? What data analysis have you done to predict success? And how much money are you going to make for your investors?
Who is On Board: Who comprises your team, and what have they done previously? What is their experience in the industry you’re about to take by storm? Ensuring you have a reliable team is essential to gaining the trust of investors.
When these three aspects come together in one perfect package, you can create an investment opportunity that people see as a viable alternative investment to traditional publicly-traded stocks and bonds. Crowdfunding your business is a smart and reliable way to attract investors to your idea.
As startups and small businesses seek to overcome the first critical barriers of growth on their way to success, there is no greater challenge than finding the funds necessary to fuel their passion. Crowdfunding provides a method for you to overcome such challenges more quickly and easily.
Venture capitalism has long been the most reliable method for entrepreneurs to achieve their business goals: VC is a well-known avenue for investors with deep pockets and decades of experience to help businesses grow rapidly. Many venture capitalists have vast networks of connections that entrepreneurs would struggle to make on their own. In many cases, simply obtaining funds from a certain name wins startups their needed credibility.
The downside of VC is its elitism--fewer than 1% of companies each year receive even $1 of funding. Chances are even slimmer for female entrepreneurs; in 2019 just 2.8% of VC went to female founders. Odds are also long for entrepreneurs living outside the Acela Corridor--Boston, New York, Washington D.C., San Francisco, or the Silicon Valley. Startups from those five hubs command more than 80% of all VC investments on a yearly basis.
Stack these grim numbers against the rapidly-expanding field of equity crowdfunding and you’ll notice a much healthier balance achieved. The big five metro hubs only consumed 42% of equity crowdfunding in 2019, leaving more than half of the pot going to people in smaller markets with big ideas. Additionally, 28% of crowdfunding capital went to companies with a female founder or cofounder.
A startup or small business with an idea, a niche, and a reliable team of people on board is likely ready for investors to help achieve new heights. Crowdfunding provides a platform to more easily access investors who are enthusiastic about your success, no matter who you are or where you live. Equity crowdfunding makes funds more accessible than ever before, allowing more businesses to succeed.