Marketing Your Equity Crowdfunding Project
Rules for Regulation A+ went into effect in mid-June, effectively legalizing equity crowdfunding for accredited and non-accredited investors alike. In addition to taking away restrictions on general solicitation and advertising, non-accredited investors can now invest up to 10% of their income or net worth annually, whichever is greater.
With a wider pool of potential investors and limited restrictions on solicitation, marketing your offering becomes easier, but also more important. Read on for some of our top tips for marketing your equity crowdfunding campaign.
Marketing Tips for a Successful Equity Crowdfunding Campaign
Don’t underestimate the importance of pre-launch. The pre-launch phase is critical to any crowdfunding campaign, whether it’s rewards-based or equity. Never launch until you’re ready. This period of time is important for two reasons: to prepare your business for the offering, and to gather leads, or investors who may be interested. On the business side of things, you’ll need a solid business plan, including hard numbers. Consider hiring an accountant and an attorney to pull together all the statements and legal documents necessary for the offering.
While getting the business together, start putting out feelers. Pitch your project to anyone who will listen. Get positive and negative feedback, and consider how you can apply it to your project. Tweak your business plan as needed, then tweak it again. Find out what your investors are interested in, and determine how to make that work with your business.
Start growing your networks. During pre-launch, you’ll also need to work on growing your networks - both personal networks and social networks. Again, this is the time to tell everyone you know about your project. Your goal here is to build a group of investors who are likely to contribute. Getting your network to invest in your campaign early is key to boosting your project’s credibility and making it more appealing to those who may not know you or be as familiar with the project. Reach out to any high-profile investors in your network, and make sure they know you will be launching an equity crowdfunding project.
Choose your platform wisely. Picking the right platform for your project is critical. Consider the following:
Think of your ideal investor - what platforms are these people on?
How do you want to negotiate with investors? Do you want to set the terms, or do you want a lead investor to negotiate terms and invest so that the crowd can invest under them? If you’re interested in an investor-led campaign, consider platforms such as AngelList.
Do you want to be on a platform that fits into a certain niche? For example, if you’re looking to raise capital through real estate crowdfunding, you may be interested in a real estate crowdfunding platform, such as Patch of Land or Realty Mogul.
Create an engaging video. Crowdfunding projects, whether rewards or equity, need compelling videos to be successful. Think of the video as your elevator pitch. Your goal when creating your crowdfunding video should be to explain your product and make an investor want to join you. However, similar to an elevator pitch, it needs to be short - we find that two to three minutes tends to be the sweet spot. Introduce the business and the team behind it, and tell investors why they should get on board with you, but keep it engaging. If your video is uninteresting or too long, you’ll start to lose viewers.
Include traditional marketing and PR. Your goal with traditional marketing and PR should be to make it easy for investors to find you. While being on the right platform for your project is a big piece of this, that’s not to say that public relations and more traditional marketing isn’t important. Hire a public relations expert to help you gain media coverage and take charge of investor relations. Do everything you can to get your company out there. Distribute press releases, and pitch journalists. Getting coverage for your project builds credibility and social proof, making others more likely to invest in your campaign.
Preparing for your own equity crowdfunding campaign? Contact us to learn more about how our crowdfunding marketing services can help make your campaign a success.