Main Ingredients for a Successful Equity Crowdfunding Campaign

In this video we spoke with Darren From Crowdcube about the most important elements of a successful equity crowdfunding campaign. Continue reading to learn how to run an equity crowdfunding campaign, and the 4 most important elements!

What are the most important aspects of an equity crowdfunding campaign?

I think the first thing that I would say to anyone that is considering a crowdfunding campaign is the same advice, I’d offer anyone that is looking at equity finance through any avenue is to really do your research and understand what’s expected of you to have a successful closure, or a successful transaction. In the context of crowdfunding, you need to think about – what are the things that contribute to the success of the campaign that you have control over?

VALUATION!

The first one is valuation! If you look at our platform or if you look at any crowdfunding activity around the world, you’ll find that valuation is a repeat offender! If something is overvalued or if the founder can’t come up with a sensible justification for the price of their round then that can really stunt growth and attraction from the crowd. The way I would remedy that is to go out and talk to as many investors as possible, as many people with a financial background or a background in your space as you can to get some intelligence, to get some data points on what their reaction is to your valuation. Do they think it’s undervalued? Do they think it’s overvalued? Or are you getting a sense that perhaps this is a fair price that should get traction with the crowd. So the best way to market-check that is to talk to people that could actually, literally invest in the business before you go live.

Is your business crowdfundable?

The second one is actually being suitable. You’re either a crowd fundable business or you’re not. You need crowd appeal, you must have a product or a service that you can explain to people and get them easily excited about! Not every business in the world is as interesting or resonant with a retail investor audience as, say, a lot of the businesses that we fund on Crowdcube.

Are you ready for Equity Finance?

A lot of companies just haven’t got the right product market fit; they may not even have a product yet, or they just haven’t really researched the market and gotten themselves ready for a lot of the hard questions that they would be asked by people who want to give them, or are thinking about giving them the money.

Running a brilliant campaign!

And there’s no better way to get a sense of how that works than watching what happens on the platform, following different campaigns, potentially making some small investments to get a sense of how the platforms work.

Then ultimately, I suppose, talking to as many entrepreneurs as possible that have been through the process.

In summary, it’s valuation; crowdfundability, and readiness for investment, and actually going out and understanding how you have to execute on the campaign, from running it to meeting investors to creating content and all of the above.


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